Filed 12/2/14 Koshman v. Koshman CA3
                                           NOT TO BE PUBLISHED
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.




              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                                      THIRD APPELLATE DISTRICT
                                                        (Placer)
                                                            ----




LARRY KOSHMAN,                                                                               C074975

                   Plaintiff and Appellant,                                    (Super. Ct. No. SPR0000138)

         v.

ROBERT KOSHMAN, Individually and as Trustee,
etc.,

                   Defendant and Respondent.




         Plaintiff Larry Koshman (Larry) appeals from a judgment following: (1) the
denial of his motion for leave to file an amended petition for relief from breach of trust;
and (2) a grant of summary judgment in favor of his brother, defendant Robert Koshman
(Robert), individually and as trustee of the family trust. The trial court found that Larry:
(1) unreasonably delayed in proposing the amendments to the petition; and (2) missed the
three-year statute of limitations in which to file his petition for relief from breach of trust.
We agree with the trial court and affirm.


                                                             1
                    FACTUAL AND PROCEDURAL BACKGROUND
        Robert is the trustee of his parents’ trust set up in 1980 for the benefit of the
parents’ children and their heirs. Larry is also one of those children. The trust provides
that “ ‘a trustee shall be responsible only for such trustee’s own acts and omissions in bad
faith.’ ”
        Included in the trust’s assets is farmland in Placer County that the Koshman
family has owned and farmed for over 70 years. In the 1950’s, the Koshman family
leveled some of that farmland (including fields now known as 7, 7a, and 8a) to grow rice,
conserve water, and prevent pesticide runoff. In the early 1990’s, Robert releveled those
rice fields. The United States Department of Agriculture (Department), Farm Service
Agency, contacted Robert about the releveling, claiming it was a conversion of wetlands
into farmland that had “consequences under [federal law].” Robert’s position was that
leveling farmed wetlands like rice fields would have implications under federal law only
if the leveling made production of rice possible where it previously had not been
possible. Robert believed that was not the case here, because the fields had been leveled
in the past and had long been used to grow rice. In any event, at the time the Farm
Service Agency initially contacted Robert, it did not cut off farm benefit payments or
take enforcement action against the trust.
        In 2002 and 2003, Robert laser leveled fields 7, 7a, and 8a to conserve water and
to protect the trust from liability due to pesticide runoff.
        On January 16, 2004, the Farm Service Agency sent the trust a letter care of
Robert stating that fields 7, 7a, and 8a were now considered “converted wetlands,” a label
which would “remain in effect until mitigation and will affect your eligibility for
[Department] benefits.” The letter also stated Robert could appeal this decision through
the administrative appeals process with the Department.
        On April 19, 2004, the Farm Service Agency notified Robert that the trust owed
$178,368 plus interest.

                                               2
       Robert filed an administrative appeal of the Farm Service Agency’s wetlands
conversion determination. On June 24, 2004, a hearing officer from the Department’s
national appeals division determined that the Farm Service Agency’s wetlands
conversion decision was wrong. However, on August 25, 2004, the director of the
Department’s national appeals division reversed the hearing officer’s determination and
concluded there indeed was a wetlands conversion. Robert requested reconsideration, but
that reconsideration was denied on November 30, 2004.
       In a December 27, 2004, facsimile, Larry wrote to Robert that because of “new
found discoveries we may be petitioning the court for a new Trustee and damages
relating to the Trust and it[]s members.”
       A month later, in January 28, 2005, Larry’s attorney followed up with a letter to
Robert’s attorney discussing Robert’s laser leveling “misconduct” that resulted in “the
government’s imposition of the sanctions and termination of all rights to farming
subsidies, along with an order for reimbursement of one year’s subsidy, making the
continued operation of the farm not economically feasible.”
       On February 3, 2005, Larry sent Robert a letter stating Larry could no longer stand
by and allow Robert to oversee the trust, which was partly due to Robert’s laser leveling
the fields, which “caused the [trust] to be disqualified from any Government support now
or in the future,” and which resulted in the estate “now ow[ing] $68,000 back to the
Government.”
       On February 15, 2005, the trust (via Robert) and Angelo K. Tsakopoulos
Investments (Tsakopoulos) entered into an agreement to sell some of the trust property,
including fields 7, 7a, and 8a, to Tsakopoulos. The agreement stated that, as to the
“[w]etlands [i]ssue,” Tsakopoulos will pay $10,000 to the trust “for legal fees on the
wetlands issue. All prior cost incurred to date is the expense of the [trust]. After escrow
closes, [Tsakopoulos] will be responsible for the resolution of the wetlands claim.
[Tsakopoulos] shall indemnify, defend and hold [the trust], Robert Koshman, Trustee,

                                             3
and Robert Koshman, personally, and the tenants of the [trust] harmless from any and all
damages claims, liabilities, expenses (including reasonable attorneys’ fees) arising out of
or as a result of the wetland nuisance claims . . . including reimbursement of any
government subsidies that [the trust] and [the trust’s] tenants may be required to pay in
connection with the resolution of the claim.”
       In a petition dated March 14, 2005, Larry petitioned to remove Robert as trustee.
The petition alleged “on information and belief” that “[a]s a result of the manipulation of
the 24 acres of wetlands, NONE of the property owned by the [trust] is eligible for
government farming subsidies. Said ineligibility begins from the date of the violation in
the years 2002 and 2003, and continues until the wetlands are restored or the damage is
mitigated by substituting like property for converted wetlands . . . . [A]ny beneficiary
who may want to farm property held by his or her subtrust will not be able to receive
government farming subsidies . . . . [T]he Farm Service Agency, the agency that
administers government benefits and loans, is in the process of sending letters to the
family members who have received subsidies to inform them that they must reimburse
the government for the subsidies received since the violation. [Larry] alleges on
information and belief that all told, reimbursement will total approximately $170,000 per
year of violation. The harm to family members opens the trust to liability.”
       On May 2, 2005, the trial court approved the agreement to sell the trust property to
Tsakopoulos, and Larry consented to the sale.
       On June 8, 2005, the Farm Service Agency notified Robert, Larry, and the other
trust beneficiaries by letter that the debt of $178,368 plus interest was past due. The
Farm Service Agency further notified them “[i]f you recently sold the property, and did
not restore the converted wetlands before it was sold, all persons involved in the violation
will remain permanently ineligible for any [Department] benefits.”
       Almost three years later, on June 5, 2008, Larry filed the instant petition for relief
from breach of trust. Larry alleged that Robert “violated his duty . . . to exercise

                                              4
reasonable skill, care and diligence in the administration of the trust by . . . the following
misconduct” that Larry then detailed. One, in “2002 and 2003,” Robert “caused Fields 7
and 8A . . . to be laser leveled.” Two, “on August 6, 2004, [Robert] successfully
petitioned the court to sell approximately 1400 acres of the Placer County properties,
including the farmland subject to the wetlands violation. In May of 2005, Trustee sold
the properties to developer Angelo Tsakopoulos for . . . $10,000.00/acre without
providing for the restoration or mitigation of the wetland.” And three, Robert “never . . .
paid” a reimbursement to the Department for $69,606 “that the Trust received in federal
farm subsidies for the 2002-2005 crop years,” which it was required to pay “as a result of
the wetland violation.”1 As to this last act, Larry alleged that the Farm Service Agency
notified Robert, Larry, and other beneficiaries of the money that was due in a letter dated
June 8, 2005, and also notified them “if the land has been sold without restoring the
wetland, all beneficiaries of the Trust would be permanently ineligible for federal farm
programs.”
       Because of Robert’s breach of trust, “the Trust property and [Larry], as beneficiary
. . . [were] harmed in the following ways:” (a) Larry, “either as an individual or under his
own sub-trust” could not participate in farm subsidy programs for 2006 and 2007;
(b) Larry was still obligated to pay his share of the subsidy money he received in 2002
through 2005, which was $13,921.20, and all other beneficiaries were still obligated to
reimburse the Department when Robert “should have compelled payment of these monies



1      Larry on appeal claims this third alleged breach is actually something else. He
claims the third breach he alleged was Robert’s “failure to enforce the purchase and sale
agreement to compel . . . Tsakopoulos, to mitigate or otherwise restore the wetlands,
which continued the individual beneficiaries (including [Larry]) ineligibility for
[Department] benefits.” This alleged breach appears nowhere in Larry’s petition. The
only claim related to selling the property to Tsakopoulos was the second claim: “Trustee
sold the properties to developer Angelo Tsakopoulos for . . . $10,000.00/acre without
providing for the restoration or mitigation of the wetland.”

                                               5
by Mr. Tsakopoulos pursuant to the terms of the indemnity agreement”; (c) the farmland
distributed out of the trust to him has permanently lost value because Larry cannot enroll
that land in federal farm programs; (d) Larry “has missed economic opportunities as a
farmer” because he “has been forced to turn down an agricultural lease that was offered
him this year because, without the subsidy payment, the risk of farming outweighs the
potential profit”; and (e) Larry “will continue to be ineligible for farm subsidy payments
under the recently passed federal farm bill.”
       On July 29, 2008, Robert filed his response to Larry’s petition for relief from
breach of trust. Robert alleged that Tsakopoulos had complied with the indemnity
agreement, and that in the event that Tsakopoulos had not, Robert “will pursue
appropriate action to enforce the agreement.” Robert further alleged that under the terms
of the trust, he, as trustee, was responsible only for his acts and omissions “ ‘in bad
faith.’ ” Robert in good faith believed his actions did not violate any statutes related to
farmed wetlands.
       On October 23, 2009, Robert filed a cross-petition for indemnity against
Tsakopoulos.
       On November 25, 2009, Robert filed a complaint in federal district court to set
aside the Department’s wetland conversion determination.
       By February 2012, discovery in the instant petition for relief from breach of trust
was completed.
       On March 31, 2012, the federal district court ruled that the Department’s wetland
conversion determination “conflicts with the plain statutory definition of a converted
wetland . . . and is therefore ‘not in accordance with the law.’ ” It granted summary
judgment in favor of Robert, setting aside the Department’s wetlands conversion
determination.
       On July 3, 2012, the trial court stayed the instant petition for relief from breach of
trust “until appellate review of the District Court’s judgment is completed and the District

                                                6
Court’s judgment is final or until this Court holds the Status Conference [on
September 24, 2013] and decides to terminate or otherwise adjust the stay, whichever
comes first.”
         The Department initially appealed the decision but then moved to voluntarily
dismiss the appeal, which the Ninth Circuit Court of Appeals granted on September 19,
2012. The dismissal of the Department’s appeal in the federal case also ended the stay of
litigation (that began in July 2012) in Larry’s instant petition for relief from breach of
trust.
         On January 15, 2013, the trial court set September 9, 2013, as the date for trial on
Larry’s instant petition for relief from breach of trust.
         On March 20, 2013, Robert moved for summary judgment on Larry’s petition on
two grounds: (1) Larry’s claims were barred by the three-year statute of limitations
because Larry discovered the subject of the claims by 2004; and (2) Larry had never
alleged bad faith on Robert’s part, and bad faith was essential under the terms of the trust.
         On April 15, 2013, Larry responded by filing a motion for leave to file an
amended petition. The amended petition pled Robert’s “bad faith” in laser leveling the
fields. It also added two new allegations of breach of trust. The first new allegation of
breach of trust was Robert “knowingly and intentionally fail[ed] to implement [a 1996
wetlands plan and agreement] which subject[ed] the Trust to continued liability
exposure.” The second new allegation of breach of trust was Robert “incurr[ed]
substantial fees and costs to the Trust to appeal the [Department] decision in an effort
primarily to compensate for his own grossly negligent, reckless, acts in bad faith and to
help defend his personal liability as a result.”




                                               7
          Robert’s summary judgment motion and Larry’s motion to amend were scheduled
to be heard on July 11, 2013, which was eight weeks before trial.2
          The court denied Larry’s motion for leave to amend. The court explained that
“discovery between the parties ceased more than a year ago and that [the] additional
information [Larry] wish[ed] to rely on must have been known to him at that time.” The
allegations of willful misconduct and gross negligence could have been brought in the
nearly five years since the defenses were raised by Robert. And finally, the new
allegations of Robert’s misconduct “impermissibly expand[ed] the scope of the trust
petition with insufficient time for [Robert] and other parties to prepare adequately for
trial.”
          The court granted Robert’s motion for summary judgment “because Larry’s claims
are all barred by the three-year statute of limitations.” The court then entered judgment
in favor of Robert.
          Larry appeals. He contends the trial court: (1) abused its discretion in denying
him leave to amend his petition; and (2) erred in granting summary judgment in Robert’s
favor.
                                         DISCUSSION
                                                I
                          The Trial Court Acted Within Its Discretion
                  To Deny Larry’s Motion For Leave To Amend His Petition
          Larry contends the trial court abused its discretion in denying his motion for leave
to amend his petition. He argues “there [we]re no facts supporting prejudice to [Robert]”




2       Robert’s hearing on the motion for summary judgment was originally set for June
13, 2013, but was later continued by the court to July 11, 2013. Larry’s hearing on the
motion to amend his petition was scheduled for May 16, 2013, and the court issued a
tentative ruling against the amendment on that day.

                                                8
and his motion was not “unreasonably delayed.” As we explain, the trial court was
within its discretion to deny Larry’s motion to amend the petition for relief from breach
of trust because the motion to amend was unreasonably delayed.
                                              A
                                          The Law
       A trial court has “ ‘wide discretion in allowing the amendment of any pleading,’ ”
and its ruling “ ‘will be upheld unless a manifest or gross abuse of discretion is shown.’ ”
(Record v. Reason (1999) 73 Cal.App.4th 472, 486.) “The law is also clear that even if a
good amendment is proposed in proper form, unwarranted delay in presenting it may--of
itself--be a valid reason for denial.” (Roemer v. Retail Credit Co. (1975) 44 Cal.App.3d
926, 939-940.) Thus, appellate courts are less likely to find an abuse of discretion where
the proposed amendment was offered after a long unexplained delay or where there was a
lack of diligence. (Melican v. Regents of University of California (2007) 151
Cal.App.4th 168, 175.)
                                              B
      There Was An Unreasonable Delay By Larry In Proposing His Amendments
       Larry filed his proposed amended petition on April 15, 2013. The proposed
amended petition made two changes, both of which were unreasonably delayed.
       The first thing the amended petition of April 2013 proposed to do was change the
theory of Larry’s case from negligence to “bad faith” in laser leveling the fields. This
amendment was unreasonably delayed by almost five years.
       On June 5, 2008, Larry filed the instant petition for relief from breach of trust that
alleged Robert “violated his duty . . . to exercise reasonable skill, care and diligence in
the administration of the trust by,” among other things, laser leveling the fields. A month
and one-half later, on July 29, 2008, Robert filed his response to Larry’s petition alleging
that under the terms of the trust, Robert as trustee was responsible only for his acts and
omissions “ ‘in bad faith.’ ” This was indeed correct, as the trust created over 30 years

                                              9
ago stated that “ ‘a trustee shall be responsible only for such trustee’s own acts and
omissions in bad faith.’ ”
       Despite being alerted to the bad faith standard by Robert in July 2008, Larry did
not amend his petition to include allegations of bad faith until his proposed amendment
on April 15, 2013 that pled Robert’s “bad faith” in laser leveling the fields. This was
approximately a five-year unwarranted delay between when Larry was notified of the
correct standard and when Larry proposed amending his petition to allege the correct
standard. Indeed, as late as December 2012 in a declaration filed by his attorney attached
to a motion in this case, Larry continued to assert that Robert “breached” his “clear
duties” as a trustee by failing “to act prudently and reasonably.”
       The second thing the amended petition of April 2013 proposed to do was add two
new allegations. The first new allegation of breach of trust was Robert “knowingly and
intentionally fail[ed] to implement [a 1996 wetlands plan and agreement] which
subject[ed] the Trust to continued liability exposure.” The second new allegation of
breach of trust was Robert “incurr[ed] substantial fees and costs to the Trust to appeal the
[Department] decision in an effort primarily to compensate for his own grossly negligent,
reckless, acts in bad faith and to help defend his personal liability as a result.” The
unreasonable delay here stems from the fact that two new allegations were added over a
year after discovery had been completed in February 2012, as the trial court also found.
       On appeal, Larry seeks to distance himself from that delay by claiming that at the
time of his motion to amend his petition for breach of trust, “the stay of the case had only
recently been lifted on January 15, 2013.” But that is not what the record shows. On
July 3, 2012, the trial court stayed the instant petition for relief from breach of trust “until
appellate review of the District Court’s judgment is completed and the District Court’s
judgment is final or until this Court holds the Status Conference [on September 24, 2013]
and decides to terminate or otherwise adjust the stay, whichever comes first.” (Italics
added.) Federal appellate review was completed September 19, 2012, when the Ninth

                                              10
Circuit Court of Appeals granted the Department’s motion to voluntarily dismiss the
case. Larry’s own counsel stated that the “federal action has now been brought to a close
as the [Department] appeal has been dismissed, and as a result the district court
judgment has become final.” (Italics added.) Thus, even taking into account the stay,
Larry filed his motion to amend seven months after the stay was lifted, which still would
be an unreasonable delay given that he had known the facts behind the two new
allegations for approximately 14 months. (See Manha v. Union Fertilizer Co. (1907) 151
Cal. 581, 584-585 [no abuse of discretion in denying a leave to amend where the party
seeking leave to amend waited two months after knowing “practically all the matters set
forth in its amended [pleading]” to seek that leave].)
       In summary, the trial court was well within its discretion to deny Larry leave to
file his amended petition based on unwarranted delay. (Melican v. Regents of University
of California, supra, 151 Cal.App.4th at p. 175; Roemer v. Retail Credit Co., supra, 44
Cal.App.3d at pp. 939-940.)
                                              II
          The Court Correctly Granted Summary Judgment In Favor Of Robert
       The trial court granted summary judgment “because Larry’s claims are all barred
by the three-year statute of limitations.” Larry contends the trial court erred because
Larry was within the three-year statute of limitations, and if he was beyond those three
years, the statute was tolled based on fraud and concealment. We agree with the trial
court that Larry missed the three-year statute of limitations, and we find that any fraud or
concealment did not alter the application of the statute of limitations. We explain the law
and facts below.
       A trust beneficiary’s claim against a trustee for breach of trust is barred unless
brought within three years of when the beneficiary either: (1) received a written report
disclosing the existence of the claim; or (2) “discovered, or reasonably should have
discovered, the subject of the claim.” (Prob. Code, § 16460, subd. (a)(1)-(2).)

                                             11
       Here, Larry filed the petition for relief from breach of trust on June 5, 2008. Thus,
if Larry discovered or reasonably should have discovered the subject of his claims before
June 5, 2005, his claims are barred by the three-year statute of limitation. (Prob. Code,
§ 16460.)
       We begin by recapping the subject of Larry’s claims. On June 5, 2008, Larry
alleged in his petition Robert breached his duty as trustee by the following acts: One, in
“2002 and 2003”, Robert “caused Fields 7 and 8A . . . to be laser leveled.” Two, “[i]n
May of 2005, Trustee sold the properties to developer Angelo Tsakopoulos for . . .
$10,000.00/acre without providing for the restoration or mitigation of the wetland.” And
three, Robert “never . . . paid” a reimbursement to the Department for $69,606 “that the
Trust received in federal farm subsidies for the 2002-2005 crop years,” which he was
required to pay “as a result of the wetland violation.” As to this last act, Larry alleged
that the Department notified Robert, Larry, and other beneficiaries of the money that was
due in a letter dated June 8, 2005, and also notified them “if the land has been sold
without restoring the wetland, all beneficiaries of the Trust would be permanently
ineligible for federal farm programs.”
       All of these issues derive from Robert’s laser leveling of the rice fields. And,
Larry knew of the laser leveling before June 5, 2005. Larry demonstrated his knowledge
on February 3, 2005, when he wrote a letter to Robert stating he could no longer stand by
and allow Robert to oversee the trust, which was partly due to Robert’s laser leveling of
the fields, which “ ‘caused the [trust] to be disqualified from any Government support
now or in the future’” and which resulted in the estate “now ow[ing] $68,000 back to the
Government.”
       Larry claims, though, he did not know the scope of harm from the laser leveling,
namely, that he would also be individually barred from receiving subsidies for farming
other properties, until June 5, 2008, when the Department sent him a letter notifying him
of his individual ineligibility for Department programs.

                                             12
       There are three problems with Larry’s scope of harm argument.
       One, Larry did not have to know the exact scope of harm. It is sufficient if the
plaintiff “has suffered appreciable harm and knows or suspects that . . . blundering is its
cause.” (Gutierrez v. Mofid (1985) 39 Cal.3d 892, 898.) Larry knew by January 28,
2005, that he had suffered appreciable harm by the laser leveling and knew that Robert,
in his role as trustee, had caused that harm. On that date, Larry’s attorney wrote to
Robert’s attorney about Robert’s laser leveling “misconduct” that resulted in “the
government’s imposition of the sanctions and termination of all rights to farming
subsidies, along with an order for reimbursement of one year’s subsidy, making the
continued operation of the farm not economically feasible.”
       Two, Larry claims the “ ‘essential’ fact” that formed “the basis of his claim” was
his individual ineligibility for Department benefits because that was “the basis of his
damages,” but Larry’s individual ineligibility was not the only basis for his claim and his
damages. Larry’s June 5, 2008, petition for relief from breach of trust also included
Larry’s allegations that because of Robert’s breach of trust, “the Trust property” “[was]
harmed in the following ways:” he “either as an individual or under his own sub-trust”
could not participate in farm subsidy programs for 2006 and 2007, and “all other
beneficiaries [w]ere still obligated to pay reimbursement the [Department]” when Robert
“should have compelled payment of these monies by Mr. Tsakopoulos pursuant to the
terms of the indemnity agreement.” In his petition, Larry also prayed that Robert “be
compelled to perform his duty to protect the Trust property. . . .” Thus, contrary to
Larry’s argument on appeal, his individual ineligibility for Department benefits was not
the essential fact for determining the commencement of the statute of limitations.
       And three, Larry was at least on inquiry notice as early as December 2004 or
January 2005. “[T]he limitations period begins once the plaintiff ‘ “ ‘has notice or
information of circumstances to put a reasonable person on inquiry . . . .’ ” ’ [Citation.]
A plaintiff need not be aware of the specific ‘facts’ necessary to establish the claim; that

                                             13
is a process contemplated by pretrial discovery. Once the plaintiff has a suspicion of
wrongdoing, and therefore an incentive to sue, she must decide whether to file suit or sit
on her rights. So long as a suspicion exists, it is clear that the plaintiff must go find the
facts; she cannot wait for the facts to find her.” (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d
1103, 1110-1111.)
       In a December 27, 2004, facsimile, Larry wrote to Robert that because of “new
found discoveries we may be petitioning the court for a new Trustee and damages
relating to the Trust and it[]s members.” A month later, in January 28, 2005, Larry’s
attorney followed up with a letter to Robert’s attorney discussing Robert’s laser leveling
“misconduct” that resulted in “the government’s imposition of the sanctions and
termination of all rights to farming subsidies . . . . ” A few days later, on February 3,
2005, Larry wrote a letter to Robert stating Larry could no longer stand by and allow
Robert to oversee the trust, which was partly due to Robert’s laser leveling of the fields,
which “caused the [trust] to be disqualified from any Government support now or in the
future” and which resulted in the estate “now ow[ing] $68,000 back to the Government.”
Larry followed up this letter with a petition to remove Robert as trustee dated March 14,
2005, based on Robert’s laser leveling of the farmlands. Thus, Larry had not only the
incentive to sue, he did sue, just not for relief from breach of trust, but rather, to remove
Robert as trustee.
       Given these facts, Larry was at least on inquiry notice in December 2004 or
January 2005, which was more than three years before he filed his June 5, 2008, petition
for relief from breach of trust. Thus, the trial court correctly found “the statute had
already been running for a substantial period of time no later than late 2004.”3



3      Because we agree with the trial court that the statute began running in 2004,
Larry’s tolling argument (that the statute of limitations were tolled from May 2005 to
June 8, 2005 because of fraud) gets him nowhere. The fraud Larry alleged was that

                                              14
                                    DISPOSITION
      The judgment is affirmed.



                                                    ROBIE                , Acting P. J.



We concur:



      BUTZ                , J.



      MURRAY              , J.




Robert and Tsakopoulos had a private agreement not to participate in any Department
programs so that they would be exempt from having to restore the wetlands.

                                          15
