Goodwin v. Goodwin CA1/5

Filed 6/30/21 Goodwin v. Goodwin CA1/5
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

ROCKY LEE GOODWIN, et al.,
Plaintiffs and Respondents,
A157499
v.
MERLIN W. GOODWIN, JR., as (Humboldt County
Trustee, etc., Super. Ct. No. DR130381)
Defendant and Appellant.

A trustee appeals two trial court rulings: (1) that certain trust property
belongs to one of the settlors’ children pursuant to an oral contract, and (2)
denying the trustee’s request for reimbursement of attorney fees from the
trust estate. We reverse the latter ruling in part and otherwise affirm.
BACKGROUND
This case involves a family dispute over certain real property known as
“Moose Ranch,” which was originally owned by Merlin “Buddy” Goodwin, Sr.,
and Billie Lee Goodwin.1 Buddy and Billie had four children: Rocky, Merlin,
Tamara, and Gary. Buddy died in 2007. In 2011, Billie created the Billie Lee

1 Like the trial court and the parties, we refer to Merlin Goodwin, Sr., by his
nickname, Buddy, and to the other members of the Goodwin family by their
first names. No disrespect is intended.

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Goodwin Revocable Trust (the Trust). The Trust property included Moose
Ranch as well as other real and personal property. The Trust provided that,
upon Billie’s death, Rocky was to receive a 90 percent interest in Moose
Ranch and Tamara was to receive the remaining 10 percent interest. After
the distribution of other specific bequests, the remainder of the Trust estate
would be divided equally among the four children.
In 2013, Rocky and his wife Sarah (collectively, Plaintiffs) sued Billie,
individually and in her capacity as trustee of the Trust. The complaint
alleged Billie and Buddy made an oral agreement with Plaintiffs decades
earlier that, if Plaintiffs lived on Moose Ranch and maintained and improved
the property, Billie and Buddy would transfer title to Plaintiffs when they
died. The complaint further alleged Billie recently breached that agreement
by listing the property for sale and directing Plaintiffs to leave.
Billie filed a cross-complaint alleging claims for infliction of emotional
distress, waste, and conversion, and seeking a declaratory judgment that
Plaintiffs were tenants of Moose Ranch. Billie also executed an amendment
to the Trust disinheriting Rocky and providing that Moose Ranch be sold
upon Billie’s death with the proceeds divided between Merlin, Tamara, and
Gary.
Billie died shortly thereafter. Merlin became successor trustee to the
Trust (Trustee) and continued to defend against the complaint and prosecute
the cross-complaint in that capacity.
Plaintiffs filed a petition against Merlin, individually and as Trustee,
as well as Tamara and Gary. The petition contested the Trust amendment,
alleging it was the result of undue influence or fraud in the inducement by
Merlin, Tamara, and Gary. The petition also alleged claims for elder abuse,
interference with contractual relations, and conspiracy to induce breach of

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contract, seeking damages for these claims. The petition was consolidated
with the complaint and cross-complaint.
In 2018, a bench trial on all the pleadings was held. After Plaintiffs’
case-in-chief, the court granted Trustee’s motion for judgment on the
pleadings on Plaintiffs’ petition. At the conclusion of the trial, the court
issued a lengthy statement of decision finding for Plaintiffs on the complaint
and cross-complaint. Among other findings, the trial court found: “Circa
1985-86, Buddy and Billie made an offer to Rocky and Sarah to by deed or
testamentary disposition give to them the Moose Ranch if Rocky and Sarah
would move to and become resident caretakers of the property; [¶] 2. Rocky
and Sarah accepted that offer and moved to and assisted in caring for the
property, including participating in rehabilitation and maintenance of the
two residences, management of cattle, fences, and roads, continuously since
1986. [¶] 3. Rocky and Sarah fully performed their side of the bargain and
thus, Billie, having survived Buddy, was obligated to transfer Moose Ranch
to them; [¶] 4. Billie failed to transfer the Moose Ranch to Rocky and Sarah
prior to her death or by her estate plan; [¶] 5. A contract existed which was
breached by Billie, the surviving promisor, and Plaintiffs are entitled to
specific performance.” The trial court rejected Trustee’s affirmative defenses.
Subsequently, Trustee filed a motion requesting reimbursement of his
attorney fees from the Trust. The court declined to so order.
DISCUSSION
I. The Oral Agreement
Trustee argues the trial court erred in rejecting various defenses to
Plaintiffs’ contract claim. We disagree.

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 A. Statute of Frauds
“The statute of frauds provides that certain contracts ‘are invalid,
unless they, or some note or memorandum thereof, are in writing and
subscribed by the party to be charged . . . .’ (Civ. Code, § 1624.)” (Sterling v.
Taylor (2007) 40 Cal.4th 757, 761.) “Equitable estoppel may preclude the use
of a statute of frauds defense.” (Byrne v. Laura (1997) 52 Cal.App.4th 1054,
1068 (Byrne).) Specifically, “equitable estoppel may apply to avoid the
statutes of fraud and to make an oral agreement enforceable if (a) the
promisee detrimentally relied on the agreement and would suffer an
unconscionable injury if the oral agreement were not enforced or (b) the
promisor would receive unjust enrichment if allowed to retain the benefit of
the promisee’s performance without abiding by the promisor’s obligations
under the oral agreement.” (Estate of Housley (1997) 56 Cal.App.4th 342, 359
(Housley).) “Whether the doctrine of equitable estoppel should be applied in a
given case is generally a question of fact.” (Byrne, at p. 1068.)2
The trial court found, with respect to this defense: “Plaintiffs’ long
residence at and caretaking of the Moose Ranch operates to relieve the
requirement of a writing; Plaintiffs’ performance of that which was asked of
them by decedents in reliance on the promises of decedents to their detriment
constitutes consideration and serves to estop Defendant from reliance on the
Statute of Frauds,” and “Plaintiffs’ full performance for decades of that which
promisor-decedents required of them satisfies the Statute of Frauds and no
writing is required; absent enforcement of the contract Defendants would be

2 Trustee relies on inapposite authority that application of the statute of
frauds is a question of law. The issue before us is whether Trustee is
equitably estopped from invoking the statute of frauds.

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unjustly enriched and Plaintiffs would suffer substantial hardship and
unconscionable injury.”
Trustee first argues the trial court applied the wrong legal standard
because the promisor’s fraud is an element of equitable estoppel. The cases
relied on by Trustee make clear that to the extent “fraud” is required, intent
to deceive need not be shown; instead, the requirement is satisfied by
demonstrating an unconscionable injury. (Parker v. Solomon (1959) 171
Cal.App.2d 125, 132 [“ ‘The doctrine of estoppel to assert the statute of frauds
has been consistently applied by the courts of this state to prevent fraud that
would result from refusal to enforce oral contracts in certain circumstances.
Such fraud may inhere in the unconscionable injury that would result from
denying enforcement of the contract after one party has been induced by the
other seriously to change his position in reliance on the contract [citations], or
in the unjust enrichment that would result if a party who has received the
benefits of the other’s performance were allowed to rely upon the statute.’ ”];
Notten v. Mensing (1935) 3 Cal.2d 469, 476 [“In order to raise the estoppel,
fraud in some form is essential, but it is not required that an actual intent to
defraud or mislead exist . . . . ‘All that is meant in the expression that an
estoppel must possess an element of fraud is that the case must be one in
which the circumstances and conduct would render it a fraud for the party to
deny what he had previously induced or suffered another to believe and take
action upon. . . . There need be no precedent corrupt motive or evil design.’ ”];
see also Stahmer v. Schley (1979) 96 Cal.App.3d 200, 203–204 [“No intent to
defraud on the part of the [parties asserting the statute of frauds] is
necessary to create the estoppel. It suffices that a constructive fraud will
result if these [parties] are permitted to invoke the statute of frauds.”].)
Accordingly, the trial court applied the correct legal standard.

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 Trustee also argues the evidence did not establish detrimental reliance
or unconscionable injury.3 In Housley, the plaintiff submitted evidence that
his father promised to leave all his property to the plaintiff if the plaintiff
“would care for him during [the father’s] lifetime” and, in reliance on this
promise, the plaintiff “lived with [his father] for almost 30 years, provided
[his father] with care and companionship, and . . . paid an increasing
proportion of [his father’s] living expenses.” (Housley, supra, 56 Cal.App.4th
at p. 360.) The Court of Appeal held this evidence, if believed by the trier of
fact, was sufficient to establish detrimental reliance and unconscionable
injury. (Ibid.) In Byrne, the plaintiff submitted evidence that she “relied on
[the decedent’s] assurances that she would receive his property and that he
would document this understanding,” and that she “had ‘seriously’ changed
her position in reliance on [these] promises by moving in with him,
performing the duties of a spouse, and retiring from her job at his insistence.”
(Byrne, supra, 52 Cal.App.4th at p. 1069.) The Court of Appeal held the trier
of fact could find, based on this evidence, that the plaintiff established
detrimental reliance and unconscionable injury. (Ibid.)
The trial court found, based on the evidence at trial, that Plaintiffs
moved to Moose Ranch in 1986 and lived there continuously since, Plaintiffs
expended substantial labor and money on maintaining and improving the
property, and Plaintiffs did so only because of Buddy and Billie’s promise
that they would give Plaintiffs Moose Ranch either before or upon their
death. As in Housley and Byrne, this evidence is sufficient to support the

3To the extent Trustee argues the trial court found only detrimental reliance
and not unconscionable injury, the statement of decision establishes
otherwise.

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court’s findings that Plaintiffs established detrimental reliance and
unconscionable injury.
Trustee argues Plaintiffs received a benefit by living at Moose Ranch
because they paid reduced rent. In Housley, the court found the fact that the
plaintiff “may have received some financial benefit by living in [his father’s]
house ‘rent-free’ ” would only preclude the application of equitable estoppel if
“this benefit to [the plaintiff] outweighs the benefits received by [his father]
over the years.” (Housley, supra, 56 Cal.App.4th at p. 360.) As an initial
matter, although Trustee asserts the rent paid by Plaintiffs was reduced, he
provides no record citations to any evidence of the market rental value. In
addition, Plaintiffs testified their labor and expenditures on the property was
worth approximately $900,000; although the trial court found this figure
“exaggerated” it still found they performed substantial work and
improvements on the property. Finally, the court found the benefits to Buddy
and Billie included “p[ea]ce of mind” and “a great comfort” in knowing that
Plaintiffs were maintaining the property. (Cf. Housley, supra, 56 Cal.App.4th
at p. 360 [“cases hold that care and companionship provided by family
members cannot adequately be quantified to make a monetary comparison”].)
Trustee has not demonstrated the trial court’s application of equitable
estoppel lacked substantial evidence.
Finally, Trustee notes that Tamara also lived at Moose Ranch, paid
reduced rent, and performed improvements, arguing this shows there was no
detriment to Plaintiffs. Tamara’s testimony was that she lived at Moose
Ranch for less than eight years, and Trustee cites no evidence that she made
any commitment to Buddy and Billie with respect to the property. The trial
court could reasonably find detrimental reliance resulting from Plaintiffs’

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long tenure of more than 30 years and commitment to remain on the
property, regardless of Tamara’s situation.
In sum, the trial court’s finding that Trustee was equitably estopped
from invoking the statute of frauds is supported by substantial evidence.
B. Statute of Limitations
Trustee argues Plaintiffs’ contract claim was barred by the statute of
limitations because their lawsuit was filed more than two years after Billie
transferred Moose Ranch to the Trust. (Code Civ. Proc., § 339 [two year
limitations period for oral contract claim].)
“[T]he ‘[g]eneral [r]ule’ [is] that a contract cause of action runs from the
date of the breach. [Citation.] . . . [A] breach of contract ordinarily occurs
upon the promisor’s failure to render the promised performance.” (McCaskey
v. California State Automobile Assn. (2010) 189 Cal.App.4th 947, 958.) “[A]
repudiation may constitute an anticipatory breach, giving the aggrieved
promisee the option of suing immediately. [Citation.] But it does not
accelerate the accrual of a cause of action for limitations purposes; the
promisee remains entitled to wait until performance is due and the promisor
has failed to perform, i.e., to do the thing promised.” (Ibid.)
The Trust, by its terms, could be revoked or amended by Billie. To the
extent Billie’s transfer of Moose Ranch to the Trust constituted a repudiation
of the oral agreement to transfer the property to Plaintiffs on or before her
death, the breach was anticipatory only and did not trigger the statute of
limitations.
C. Unenforceable Gift
Trustee argues Buddy and Billie’s promise to Plaintiffs was not an oral
contract, but instead was an unenforceable gift.

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 “It is basic that what distinguishes a contract from a gift is that the
latter only takes place in the absence of consideration.” (In re Marriage of
Mehren & Dargan (2004) 118 Cal.App.4th 1167, 1172.) Confusingly, Trustee
argues the purported gift was unenforceable because there was consideration.
The trial court found the elements of an oral contract established; Trustee’s
argument that the promise was not an enforceable gift does not demonstrate
error in this finding.
D. Laches
Trustee argues laches should have barred Plaintiffs’ claim because
Plaintiffs unreasonably delayed in bringing suit after Billie transferred
Moose Ranch to the Trust. The trial court found no credible evidence
supporting the application of laches.
“A party asserting laches must show both unreasonable delay and
prejudice resulting from the delay. [Citation.] A trial court’s ruling
regarding laches will be sustained if there is substantial evidence to support
it.” (Martin v. Santa Clara Unified School Dist. (2002) 102 Cal.App.4th 241,
257.) Trustee makes no argument whatsoever regarding prejudice. In
addition, Rocky testified that after Billie transferred Moose Ranch to the
Trust, she assured him, “ ‘Don’t worry. I’m going to change it before I die.
You guys are getting the place . . . .’ ” Accordingly, substantial evidence
supports the trial court’s implied finding that any delay was not
unreasonable.
II. Attorney Fees
Trustee argues the trial court erred in denying his request to have his
attorney fees reimbursed from the Trust. We agree in part.

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 A. Legal Background
“ ‘[T]he Probate Code is studded with provisions authorizing the trustee
to hire and pay (or seek reimbursement for having paid) attorneys to assist in
trust administration.’ [Citation.] . . . [¶] ‘ “The underlying principle which
guides the court in allowing costs and attorneys’ fees incidental to litigation
out of a trust estate is that such litigation is a benefit and a service to the
trust,” ’ and not for the personal benefit of the trustee.” (People ex rel. Harris
& Becerra v. Shine (2017) 16 Cal.App.5th 524, 534 (Harris).)
For example, in Whittlesey v. Aiello (2002) 104 Cal.App.4th 1221
(Whittlesey), one beneficiary contested a trust amendment that removed her
as primary beneficiary. (Id. at pp. 1224–1225.) The trustee unsuccessfully
defended the contest and sought reimbursement of his attorney fees from the
trust. (Id. at p. 1225.) The Court of Appeal affirmed the trial court’s denial
of reimbursement, reasoning, “where the trust is not benefited by litigation,
or did not stand to be benefited if the trustee had succeeded, there is no basis
for the recovery of expenses out of the trust assets.” (Id. at p. 1230.) “The
essence of the underlying action was not a challenge to the existence of the
trust; it was a dispute over who would control and benefit from it. Whether
or not the contest prevailed, the trust would remain intact.” (Id. at p. 1228.)
Moreover, because the trustee was unsuccessful in the litigation, “an award
of fees to [the trustee’s attorney] from the trust would be, in effect, an award
from [the successful beneficiary]. In other words, [the beneficiary] would be
required to finance her own trust litigation and that of her opponent, despite
the fact she prevailed. There can be no equity in that.” (Id. at p. 1230; see
also Terry v. Conlan (2005) 131 Cal.App.4th 1445, 1464 (Terry) [“[The
trustee] has not participated in this litigation as a neutral trustee to defend
the trust and protect its assets; rather, she has consistently pursued her own

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interests [as beneficiary] . . . . As such, she must bear her own costs in this
litigation, rather than be reimbursed from the trust.”].)
“A trustee’s entitlement to use of trust assets to retain and compensate
attorneys may be expanded by the terms of the trust instrument.” (Harris,
supra, 16 Cal.App.5th at p. 535.) For example, in Doolittle v. Exchange Bank
(2015) 241 Cal.App.4th 529 (Doolittle), an independent trustee sought an
order authorizing use of trust assets to defend against a contest to a trust
amendment. (Id. at pp. 535–536.) The Court of Appeal affirmed the trial
court’s order granting the request, finding Whittlesey and Terry
distinguishable because of trust provisions stating: “ ‘The Trustee is hereby
directed to defend, at the expense of any trust estate governed by this
Agreement, any contest or other attack of any nature on this Agreement, on
any of its provisions and any amendments hereto . . . .’ ” (Id. at pp. 534, 538.)
“ ‘Allowance of litigation expenses rests in the sound discretion of the
trial court, whose ruling will not be disturbed on appeal absent an abuse.’
[Citation.] However, a trial court abuses its discretion when it applies the
wrong legal standards. [Citation.] We decide questions of law de novo.”
(Harris, supra, 16 Cal.App.5th at p. 534.)
B. Analysis
Trustee relies on two provisions in the Trust. First, “The trustee may,
in the trustee’s discretion, initiate or defend, at the expense of the trust, any
litigation that the trustee consider[s] advisable relating to the trust or any
property of the trust estate.” Second, “The trustee is authorized to defend, at
the expense of the trust estate, any contest or other attack of any nature on
this trust or any of its provisions or amendments.”
Trustee argues he had a “duty” under these Trust provisions to defend
against Plaintiffs’ complaint and petition, asserting the provisions are “nearly

11
identical” to those in Doolittle. To the contrary, the provisions in that case
were materially different, stating the trustee was “ ‘directed to defend’ ”
certain types of actions. (Doolittle, supra, 241 Cal.App.4th at p. 534, italics
added.) The Trust, in contrast, authorizes certain litigation conduct but does
not direct it.
To the extent Trustee suggests the Trust provisions require
reimbursement of attorney fees from the Trust regardless of whether the
Trustee’s litigation position was reasonable, we disagree. We will not
assume, absent clear indication to the contrary, that the Trust provisions
alter settled law requiring a trustee’s litigation position to be reasonable to
recover fees.4 (See Prob. Code, § 16011 [“The trustee has a duty to take
reasonable steps to defend actions that may result in a loss to the trust.”];
Whittlesey, supra, 104 Cal.App.4th at p. 1230 [discussing whether facts
“establish the objective reasonableness of the trustee’s defense”]; Estate of
Moore (2015) 240 Cal.App.4th 1101, 1106 [“As trustee, the burden was on
appellant to show that he subjectively believed the fees and expenses were
necessary or appropriate to carry out the trust’s purposes, and that his belief
was objectively reasonable.”].) The Trust’s provisions do not provide such a
clear indication. To the contrary, the first provision expressly specifies the
trustee must consider the litigation “advisable.”

4 Trustee’s suggestion that the standard is lack of willful misconduct or gross
negligence is unavailing. That standard applied in Harris because of
language in the trust that is not present here. (See Harris, supra, 16
Cal.App.5th at p. 536 [“The Trust instrument here, as amended, provides:
‘Except for the Trustee’s willful misconduct or gross negligence . . . , the
Trustee shall be indemnified and held harmless . . . by the trust estate
. . . .’ ”].)

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 As Plaintiffs argue, there is substantial evidence supporting an implied
finding that Trustee’s defense of Plaintiffs’ complaint was not reasonable
because he was aware of the binding oral agreement. (See Carter v. Cohen
(2010) 188 Cal.App.4th 1038, 1053 [“we will affirm the [fee] award on any
basis properly supported by the record”].) Trustee’s protestations that he did
not know of the agreement are unavailing: the trial court found otherwise,
and Trustee has not shown this finding lacked substantial evidence.
Accordingly, the trial court’s refusal to reimburse fees incurred in the defense
of Plaintiffs’ complaint was not in error.
It is unclear whether Trustee also seeks reimbursement for fees
incurred in prosecuting the cross-complaint against Plaintiffs. To the extent
he does seek such fees, we affirm the trial court’s denial of reimbursement.
Some of the claims asserted in the cross-complaint had no relation to the
Trust; for example, the claim for intentional infliction of emotional distress.
As for the claims that related to Moose Ranch, we affirm the trial court for
the same reasons set forth above.
Reimbursement for attorney fees incurred in Trustee’s defense of
Plaintiffs’ petition, however, is subject to a different analysis. There is no
evidence this defense was unreasonable; to the contrary, it was successful.
Moreover, the Trust expressly authorizes the use of Trust assets to defend
against such contests: “The trustee is authorized to defend, at the expense of
the trust estate, any contest or other attack of any nature on this trust or any
of its provisions or amendments.” (Italics added.) Some (though not all) of
the Petition’s causes of action sought to invalidate the amendment to the
Trust. Thus, the Trustee is entitled to reimbursement of reasonable attorney
fees incurred in his successful defense of Plaintiffs’ attack on the Trust’s

13
amendment. We will remand for the trial court to determine the amount of
such fees.5
Plaintiffs argue it would be inequitable to encumber Moose Ranch to
reimburse Trustee’s attorney fees, an argument that assumes Moose Ranch
will remain part of the Trust estate, the entity liable for reimbursement.
Trustee concedes that this court’s affirmance of the trial court’s judgment on
Plaintiffs’ complaint will result in the transfer of Moose Ranch from the Trust
to Plaintiffs.6 Both parties appear to agree, however, that the trial court can
order this transfer delayed until any fee order is satisfied. Trustee argues
the trial court could also allow the transfer to proceed but subsequently order
Plaintiffs to return Moose Ranch to the Trust. The parties disagree on the
equities.

5 For the first time at oral argument, Plaintiffs argued Trustee was not
entitled to such a remand because he failed to include the judgment on the
Petition in the record on appeal. Oral argument is too late to raise a new
contention. “ ‘It is a clearly understood principle of appellate review, so well
established as to need no citation to authority, that contentions raised for the
first time at oral argument are disfavored and may be rejected solely on the
ground of their untimeliness.’ ” (Estate of McDaniel (2008) 161 Cal.App.4th
458, 463.) In any event, we reject the claim. The record on appeal contains a
minute order granting Trustee’s motion for judgment on the Petition and the
judgment on the complaint, which recites the procedural history of the
litigation including entry of judgment on the Petition. The trial court did not
issue a separate order on Trustee’s fee motion and Trustee’s notice of appeal
indicates Trustee’s appeal of both the judgment and “the trial court’s failure
to use the Proposed Judgment submitted by [Trustee] which included an
award of costs and attorneys’ fees in favor of [Trustee].” Trustee’s failure to
include the judgment on the Petition in the record on appeal does not
preclude this court from reversing the trial court’s postjudgment order
denying his fee motion with respect to fees incurred in defending against the
Petition.
6The parties filed supplemental briefs on this issue in response to our
request.

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 We decline to decide these issues because their resolution may be
unnecessary. First, it appears the Petition’s only claims contesting the Trust
amendment—the only reimbursable claims—were dismissed by Plaintiffs
during their case-in-chief at trial. Accordingly, the amount of fees
attributable to Trustee’s defense of these claims is likely very small.7 Second,
although Trustee asserts Moose Ranch is the only asset in the Trust estate,
the record citation provided does not so establish. The Trust identified other
real and personal property as part of the estate; although Billie apparently
transferred the other real property to Martin, Gary, and Tamara before her
death, the Trust property also included livestock and multiple vehicles.
Thus, the Trust may contain sufficient assets, independent of Moose Ranch,
to satisfy an attorney fee order issued on remand. If not, the trial court in
the first instance may determine whether Moose Ranch can and should be
used to satisfy the order (issues on which we express no opinion).
DISPOSITION
The aspect of the judgment denying Trustee’s request for
reimbursement from the Trust of reasonable attorney fees incurred in his
successful defense of Plaintiffs’ attack on the Trust’s amendment is reversed
and remanded. In all other respects, the judgment is affirmed. Plaintiffs are
awarded their costs on appeal.

7Following trial, the trial court characterized the Petition as an action “to
advance [Plaintiffs’] claims to Moose Ranch pursuant to contract,” suggesting
the overwhelming majority of litigation on the Petition did not involve its
attack on the Trust amendment.

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 SIMONS, Acting P.J.

We concur.

NEEDHAM, J.

BURNS, J.

(A157499)

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