Filed 6/10/15 Estate of DeMotto CA2/8
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                 DIVISION EIGHT


Estate of BENJAMIN DEMOTTO,                                          B256695
Deceased.
PEGGY MITCHELL,                                                      (Los Angeles County
                                                                     Super. Ct. No. BP150148)
         Petitioner and Respondent,

         v.

MICHELE DEMOTTO et al.,

         Objectors and Appellants.




         APPEAL from a judgment of the Superior Court of Los Angeles County.
David S. Cunningham III, Judge. Affirmed.

         Skousen Law and Bob Skousen for Objectors and Appellants.

         Law Office of Cary W. Goldstein, Cary W. Goldstein and Sarah C. Clark, for
Petitioner and Respondent.


                                                  ______________
       Appellants Michele DeMotto and Christopher DeMotto are the adult daughter and
son, respectively, of Benjamin DeMotto, who died on August 31, 2013.1 They appeal
from an order appointing respondent Peggy Mitchell, with whom DeMotto had been in a
long-term romantic relationship, the administrator of DeMotto’s estate. We affirm.

                  FACTUAL AND PROCEDURAL BACKGROUND

       On December 30, 2013, four months after DeMotto’s death, Mitchell brought a
Marvin action against DeMotto seeking damages and a constructive trust of assets held
by appellants.2 (Case No. BC531935.) The complaint alleged that DeMotto (who was
estranged from his wife) and Mitchell (who was unmarried) met at the California Yacht
Club in 2001 and began a romantic relationship that lasted until his death in 2013.
During that time, DeMotto suffered two strokes. In 2006, DeMotto allegedly told
Mitchell he had changed his mind about planning to marry her, but assured her she would
be provided for in the event of his death. It was an assurance DeMotto repeated multiple
times over the ensuing years. But after DeMotto died, Mitchell learned from DeMotto’s
daughter that DeMotto had not provided for Mitchell in either his will or trust.
       Mitchell commenced the probate proceedings underlying this appeal on March 11,
2014, by filing a Petition for Letters of Administration of DeMotto’s estate. Attachment
3d to the petition states: “This Petition is filed only for the purpose of filing a Creditor’s
Claim and expected litigation. There are no known assets in the probate.”
       Appellants did not file their own counter petition for issuance of letters, but in
their contest to Mitchell’s petition, appellants characterized Mitchell’s Marvin action as
“nothing more than an attempt of a gold-digger to unjustly enrich herself to the detriment


1       To avoid confusion, we refer to decedent Benjamin DeMotto as DeMotto. We
refer to his children, Michele and Christopher, collectively as appellants.

2      In Marvin v. Marvin (1976) 18 Cal.3d 660, 670–671 (Marvin), the California
Supreme Court held that express or implied contracts between persons living together in
a nonmarital relationship should be enforced, unless the contracts were explicitly founded
on the consideration of meretricious sexual services.

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of a no-asset estate.” Appellants argued Mitchell should not be appointed administrator
for three reasons: (1) The probate court lacked jurisdiction because the estate had no
assets; (2) The public administrator, rather than Mitchell, should be appointed because
Mitchell was a creditor and the public administrator has statutory priority over creditors
in appointment (Prob. Code, § 8461, subds. (p) & (q));3 and (3) As a result of the Marvin
action, Mitchell has a conflict of interest with the estate and beneficiaries which renders
her incapable of executing the duties of an administrator (§ 8502).
       In her reply, Mitchell explained that a condition precedent to maintaining her
Marvin action was a timely-filed claim against the estate, which required initiating
probate proceedings;4 a lack of tangible assets does not preclude probate; as a creditor,
she is statutorily eligible to be appointed administrator of the estate; any person with a
higher ranking under section 8461 could file a competing petition for probate.
       Mitchell and appellants were represented by counsel at the April 11, 2014 hearing
on the petition. After the probate court stated it was inclined to grant the petition, it
asked if there was anything further. Appellants’ counsel offered no response. An order
to show cause re final account was set for November 13, 2014.
       The order appointing respondent administrator of decedent’s estate was filed on
May 14, 2014. Letters of Administration were filed that same day. Appellants timely
appealed.



3      All future undesignated statutory references are to the Probate Code.
4       A breach of contract action against the decedent falls within the definition of a
“claim” against the estate. (§ 9000, subd. (a)(1).) Such action must be brought within
one year of the date of death. (Code Civ. Proc., § 366.2, subd. (a); see also § 366.3
[promise of distribution from estate].) But it may not be brought unless a claim is first
made to the personal representative of the estate and the claim is rejected in whole or in
part. (§ 9351; see also Dobler v. Arluk Medical Center (2001) 89 Cal.App.4th 530, 536
[a claim against the estate is a condition precedent to filing an action against the estate].)
The ability of a creditor to initiate administration of the estate compensates for the short
limitations period. (See Dawes v. Rich (1997) 60 Cal.App.4th 24, 36, fn. 6.)


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                                       DISCUSSION

A.     The Probate Court Had Jurisdiction Even for a “No Asset” Estate

       Appellants contend the probate court lacks jurisdiction because the petition states
there are no assets in the estate. Appellants are incorrect.
       A decedent’s property is subject to administration under the Probate Code and is
subject to the rights of beneficiaries and creditors, among others. (§ 7001.) Because
probate proceedings are concerned with administration of an estate, the existence of
property to be administered is jurisdictional. (14 Witkin, Summary of Cal. Law (10th ed.
2005) Wills & Probate, § 352.) Although perhaps colloquially misunderstood, a debt is
property for this purpose. (Ibid [“The property may consist of an intangible such as a
debt, or a cause of action for wrongful death of the decedent, where an administrator
must be appointed to sue.”], citing Estate of Waits (1944) 23 Cal.2d 676, 680-681.) Our
Supreme Court first stated over 100 years ago that a claim against the estate is treated as
property of the estate. (Estate of Daughaday (1914) 168 Cal. 63, 70 (Daughaday).) The
court in Daughaday posited three types of proceedings that theoretically could be utilized
where the “the sole property of the estate is an equitable claim or demand,” against the
estate. First, the probate court could treat “such a claim as property, justifying the
issuance of letters in advance of its establishment.”5 Or, the probate court could await
the action of a court of equity in establishing the claim. Or, the probate court, “sitting as
a court of equity, [could] itself try the controversy” and grant or deny letters of
administration depending on the determination of the validity of the claim. (Daughaday,
at pp. 69-70.) It explicitly held that the first of these alternatives was the correct
procedure, expressly rejecting the two other alternatives. “These considerations compel
the conclusion that, in proper cases and upon a proper showing that the property of the



5      By “its establishment” we understand the court to be saying “the establishment or
proof of the claim.” In other words, the granting of letters where the only property of the
estate was a debt would precede the actual resolution of the underlying debt.


                                               4
estate is an equitable claim, the court in probate should grant letters of administration.”
(Ibid.)6
       Under Daughaday, Mitchell’s Marvin action is a claim against the estate which
justified issuance of letters of administration.

B.     Appointment of the Public Administrator Was Not Statutorily Required

       Appellants contend it was error to appoint Mitchell rather than the public
administrator. They argue the public administrator has statutory priority over Mitchell,
who was a creditor of the estate. We find no error.
       Any interested person may commence proceedings for administration of an estate
by filing a petition seeking appointment of a personal representative. (§ 8000,
subd. (a)(1).) A creditor is an “interested person.” (§ 48, subd. (a)(1).) Appointment of
an administrator (as opposed to executor or administrator with will attached) is governed
by Chapter 4, Article 4, commencing with section 8460.7 Section 8461 identifies the
persons entitled to be appointed administrator in order of priority. As relevant here,
children have priority over the public administrator, the public administrator has priority
over creditors and creditors have priority over “any other person.” (See § 8461, subds.
6
        Although the court refers to a claim “in equity,” we do not read Daughaday’s
holding as precluding the issuance of letters when the underlying claim is more properly
characterized as one in law. The facts in Daughaday dealt with the effect prior probate
proceedings in Kansas had on the probate in California.
        The Supreme Court went on to say that the probate court has discretion to grant or
refuse issuance of letters of administration in a “no asset” case. Appellants do not discuss
the trial court’s exercise of discretion, exclusively arguing that the probate court had no
jurisdiction at all to issue letters. Accordingly any argument that the trial court abused its
discretion in granting letters is waived. (Mansell v. Board of Administration (1994)
30 Cal.App.4th 539, 545–546.) In any event, given the mandatory nature of the
creditor’s claim process (Prob. Code, § 9351) and the statute of limitations for this type
of claim (Code Civ. Proc., § 366.3), we find no abuse of discretion here.

7      Appointment of a personal representative is governed by Chapter 4, commencing
with section 8400. Appointment of executors is governed by Article 2, commencing with
section 8420; appointment of administrator with the will attached (e.g. when the will does
not name an executor) is governed by Article 3, commencing with section 8440.

                                               5
(b) [children], (p) [public administrator], (q) [creditors], (r) [any other person].) The
Probate Court’s discretion is limited to appointing the qualified person with the highest
priority. (Estate of Gibson (1963) 222 Cal.App.2d 299, 300-301.) If there is more than
one qualified person with the same priority, the probate court has discretion to select
among such persons. (§ 8467.)
       The Probate Court may also appoint a person nominated by any person entitled to
appointment. (§ 8465, subd. (a).) A nominee “has priority next after those in the class of
the person making the nomination.” (§ 8465, subd. (b).) For example, because a child
has priority over a grandchild, a child’s qualified nominee has priority over a grandchild.
       Appointment of a personal representative is subject to contest. (§ 8004, subd. (a).)
If the contestant asserts another person’s right to appointment, the contestant must file a
petition to have that other person appointed and the court must hear the two petitions
together. (§ 8004, subd. (a).) Thus, if in response to an already filed petition someone
else seeks appointment as personal representative or nominates a third person to so act, a
separate petition must be filed. “If persons having priority fail to claim appointment as
administrator, the court may appoint any person who claims appointment.” (§ 8468;
Estate of Selb (1949) 93 Cal.App.2d 788, 791 [public administrator who does not apply
for letters of administration is not entitled to priority].) It stands as a corollary to this rule
that, if a contestant with priority fails to file a petition nominating another person, the
court may appoint any qualified person who claims appointment.
       Here, Mitchell was the only party who filed a petition for letters of administration.
Although appellants contested her appointment and advocated appointment of the public
administrator instead, appellants did not file a competing petition. Citing their opposition
papers filed with the trial court, appellants argue on appeal that they “nominated the
public administrator in their objection to [Mitchell’s] Petition.” That is simply not so.
First of all, appellants did not “nominate” anybody in their objections. What they did
was to point out the statutory priority of appointment under section 8461 which gives
priority to the public administrator over creditors. But no one “nominated” the public
administrator and neither the public administrator nor appellants nor anyone else other

                                                6
than Mitchell filed the mandated petition for appointment. Secondly, appellants argue
that the court had discretion under section 8466 to appoint someone in lieu of a creditor,
such as the public administrator. The only grounds asserted on appeal to support
appellants’ argument that the court abused its discretion is the claimed conflict of interest
that Mitchell had. As we discuss in the next section, we find no abuse of discretion in
that regard. In any event, even though the public administrator would have had priority
over Mitchell both as the nominee of the decedent’s children (§ 8465, subd. (b)) and also
by virtue of section 8461, subdivision (p), the trial court did not err by failing to follow
statutory priority when there was no alternative petition filed.

C.     Mitchell Does Not Have an Incapacitating Conflict of Interest

       Appellants contend it was an abuse of discretion to appoint Mitchell because she
has a conflict of interest with the estate and the heirs and “ ‘asserted rights and performed
acts hostile [to them].’ [Citations.]” They argue Mitchell’s Marvin action seeking
$1,000,000 in damages against the estate and a constructive trust against appellants
disqualifies her from appointment. We disagree.
       A person is not competent to act as personal representative (including
administrator) if there are grounds for removing the person from office under
section 8502, which provides:
       “A personal representative may be removed from office for any of the following
       causes:
       (a) The personal representative has wasted, embezzled, mismanaged, or committed
       a fraud on the estate, or is about to do so.
       (b) The personal representative is incapable of properly executing the duties of the
       office or is otherwise not qualified for appointment as personal representative.
       (c) The personal representative has wrongfully neglected the estate, or has long
       neglected to perform any act as personal representative.
       (d) Removal is otherwise necessary for protection of the estate or interested
       persons.
       (e) Any other cause provided by statute.”

A conflict of interest with the beneficiaries does not disqualify a person from
appointment as administrator. (See Estate of Cole (1966) 240 Cal.App.2d 324, 330

                                              7
[“[A]n adversity of interest does not, in itself, disqualify a person named in a will from
serving as executor as there is no statute authorizing disqualification on that ground.”].)
Certainly, creditors are not automatically disqualified from acting as a personal
representative merely because they have a claim against the estate, because “creditor” is
one of the statutorily enumerated classes of person entitled to serve as a personal
representative. (§ 8461, subd. (q).) Every creditor arguably has an adverse interest to
some of the beneficiaries of an estate. And of course, mere appointment does not
adjudicate the creditor’s claim in its favor. So Mitchell’s status as a creditor does not
automatically disqualify her.
       The Court has the power to remove a creditor or any other person from acting as
personal representative for the reasons stated in section 8502. Estate of Effron (1981)
117 Cal.App.3d 915, 929, involved the removal of an executor at the request of the
beneficiaries. The court observed: “ ‘The test is probably whether the conflict of interest
is with the estate itself rather than with other persons who may be interested in the
estate.’ [Citation.] The probate court, in examining the facts of a case, must decide
whether the circumstances warrant the removal of an executor, and, except for clear
abuse, the court’s ruling will not be interfered with on appeal.” (Id. at p. 930.) The
appellate court will interfere with the trial court’s exercise of discretion only upon a
finding that “under all the evidence, viewed most favorably in support of the trial court’s
action, no judge reasonably could have reached the challenged result. [Citation.]”
(Estate of Hammer (1993) 19 Cal.App.4th 1621, 1634.)
       The same rule on conflicts of interest should equally apply to the initial
appointment of the personal representative as it does to his or her removal. Here,
appellants have not demonstrated any abuse of discretion in appointing Mitchell personal
representative, notwithstanding the pendency of her Marvin action. Appellants’ reliance
on Estate of Hammer for a contrary result is misplaced. In Hammer, the court held the
executor of a will who was engaged in a bitter divorce from the sole beneficiary should
have been removed at the request of the beneficiary. The Hammer court chronicled the
ways in which the executor had failed to perform his statutory duties, mismanaged estate

                                              8
assets and breached his fiduciary duty to the beneficiary. (Estate of Hammer, supra,
19 Cal.App.4th at pp. 1635 et seq.) In addition, in the marital dissolution proceedings,
the executor was asserting a claim adverse to the estate in that he was alleging the
beneficiary made an oral gift to him of half of her multi-million dollar trust fund, from
which she had personally paid $750,000 to a law firm hired by the executor to maintain
an action on behalf of the estate; the executor claimed he had a personal interest in the
estate’s litigation against the law firm arising out of his interest in the beneficiary’s
separate trust fund.
       The Hammer court observed: “In the instant case, we do not merely have the
existence of a serious conflict of interest, but there is evidence, as acknowledged by the
trial court, from which it could be concluded that the executor has exploited his position
as executor to benefit his own selfish interests at the expense of the estate and the
beneficiary. In other words, there is clear evidence in this case from which it could be
concluded that the executor had already made his ‘choice.’ [Citation.] Under all the
circumstances of this case, the trial court abused its discretion in failing to remove the
executor on the ground of conflict of interest arising out of unrelated litigation against the
estate’s beneficiary.” (Hammer, supra, 19 Cal.App.4th at p. 1642.) No such facts exist
here: Mitchell is simply a creditor, and the trial court did not abuse its discretion in
appointing her as personal representative.

                                       DISPOSITION

       The judgment is affirmed. Mitchell shall recover her costs on appeal.




                                                   RUBIN, J.
WE CONCUR:



              BIGELOW, P. J.                                              FLIER, J.


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