Opinion
This appeal is by the Los Angeles County Public Administrator (Public Administrator) from a ruling approving assignments of portions of interests in the estate possessed by various heirs.1
In the instant case W. C. Cox and Company informed the heirs that it had retained an attorney to protect its assigned interest in the estate. According to Cox, the attorney was retained, in part, to “establish to the Court’s satisfaction the identity and relationship of the heirs to the decedent; since our assignment is contingent upon the heirs receiving funds from the estate in question” Cox and Company further informed the heirs that the attorney would be willing “to represent and protect the heirs’ interest in the estate and make no charge for such services rendered in the heirs’ behalf, provided such heirs request him to act in their behalf.” The heirs were not required to use Cox’s attorney and no express power of attorney was included in the assignment. The 14 heirs making assignments to Gordon L. Cox all signed retainer agreements with an attorney, Ivan McWhinney.
None of the heirs took any steps on their own behalf to challenge the assignments.
The probate court, in accordance with Superior Court for the County of Los Angeles Probate Policy Memorandum, section 13.11, ordered the heirs to file copies of the assignments as well as affidavits concerning the circumstances surrounding the assignments. These were filed on March 5, 1976. All of the assignments to Gordon L. Cox were identical.
On April 7, 1976, the Public Administrator moved, pursuant to section 1020.1, for inquiiy into the circumstances surrounding the assignments. At the hearing to inquire into the assignments, he took the position that the burden of producing evidence and the burden of proof were on the assignee because of the special nature of the proceedings under Probate Code, section 1020.1. The Public Administrator contended that his role
The evidence produced by the Public Administrator consisted of thé assignments made to respondents, the contents of the letter retaining the attorney for the heirs and the testimony of one witness, Ivan McWhinney, attorney for the heirs and for W. C. Cox and Company (the latter client was not represented by Mr. McWhinney at the § 1020.1 hearing nor on this appeal). No evidence was produced by the Public Administrator of the actual conversations and transactions between the assignee and the assignors. Respondents presented no evidence of their own. At the close of the Public Administrator’s case, respondents moved, under section 631.8, Code of Civil Procedure, for a judgment on the grounds that the Public Administrator had failed to prove a case.
The court in upholding the assignments to Gordon L. Cox ruled: “[t]hat the burden of proof and the burden of production of evidence in this hearing brought under Probate Code § 1021.1 are upon the party seeking to challenge the assignments, in this case, the Public Administrator of the County of Los Angeles.” The court further ruled that the assignments to Gordon L. Cox, being in writing, are presumed to be supported by consideration. The court concluded that the Public Administrator had failed to sustain his burden of proof and burden of production of evidence for either of the issues of whether the consideration for the assignments was grossly unreasonable or whether the assignments “were procured by duress, fraud and/or undue influence.”
The Public Administrator argues on appeal that the assignee of a partial assignment, in a section 1020.1 inquiry, has the burden of producing evidence of the consideration and the circumstances surrounding the execution of the assignment. He argues that the Public Administrator’s responsibility ends when a motion to inquire is made. The Public Administrator raises a second issue of whether all the assignments are void as being contrary to public policy.
The language of Probate Code section 1020.13 gives broad discretion to the probate court. The section allows the probate judge to inquire into the
The language of the statute is permissive in nature. In Estate of Kerr (1966) 63 Cal.2d 875 [48 Cal.Rptr. 707, 409 P.2d 931], the Supreme Court stated that at least where the heir did not, as such, move the court for such an inquiry and where other evidence tended to show reasonableness of the assignment, “. . . the inquiry contemplated by that section [1020.1] appears to be permissive rather than mandatory.” (Id., at p. 880.) Under the reasoning of Kerr, the section does not appear to require the court to make a full inquiry every time a motion to inquire has been made.
Probate Code section 1020.1 allows any party interested in the estate, the Public Administrator, or the court itself, to make a motion to inquire into the consideration for an assignment and into the circumstances surrounding the execution of the assignment. Should such an inquiry be made, it is up to the court as to how it will be conducted. The court may require from the moving party some tangible evidence of irregularity or illegality before the court would be willing to proceed with a full inquiry. Alternately, the court may regard the assignment as questionable to begin with and may therefore place the initial burden of production on the heir hunter. The language of section 1020.1 does not bind a court to any specific rule as to who has the burden of production.
A requirement that a probate court must always conduct a full inquiry into the circumstances surrounding a partial assignment of an interest in an estate whenever a public administrator makes a section 1020.1 motion would place a great burden on the probate courts, a burden which is not imposed by Probate Code section 1020.1.
The court was not unreasonable in drawing the conclusion that the assignments are valid. Civil Code, section 1614 states: “A written instrument is presumptive evidence of a consideration.” In the present case, where the assignments do not display a Butler power of attorney and where insufficient extrinsic evidence is presented by the Public Administrator to show such a power of attorney, the court is within its authority to decline to inquire further into the arrangements or the circumstances surrounding the assignments. Where no evidence as to the consideration for the assignments is presented at all, and when none of the parties to the assignments, i.e., the heirs, are challenging those instruments or their reasonableness, it is within the court’s discretion to rely upon the presumption that there was consideration. Under these circumstances, the court is not obligated under section 1020.1 of the Probate Code to make further inquiry.
The Public Administrator argues that the same rule of procedure as applies to a petition for extraordinary commission or attorneys’ fees should apply to a section 1020.1 proceeding. In those cases the representative and his attorney have the burden of showing what services they have performed. (Estate of Fulcher (1965) 234 Cal.App.2d 710, 718 [44 Cal.Rptr. 861].) This burden would be misplaced in the case of an heir hunter within the present concept of section 1020.1, at least in the situation where none of the heirs are objecting to the agreement and where there is no evidence of suspicious circumstances to suggest a grossly unreasonable or otherwise invalid assignment. In the case of extraordinary fees or commissions, it is the representative, or his attorney, who is seeking compensation beyond the scope of an existing agreement or arrangement. In the present case, neither the heir nor the heir hunter seek anything beyond what is stated in the contract of assignment. The person seeking to invalidate the contract is the Public Administrator; consequently, he has the responsibility to provide some evidence to justify his challenge to the assignments.
The Public Administrator cites Estate of Reilly (1947) 81 Cal.App.2d 564 [184 P.2d 922], for the proposition that the assignee must submit ■ evidence of the value of any services rendered to the heirs. The Reilly case differs from the present case in that the Reilly assignments were found to be void under Estate of Butler, supra, 29 Cal.2d 644. It was only after the assignee argued on appeal that he should be compensated for services actually rendered that the appellate court said there was no evidence in the record of any services rendered by the assignee and the failure of the assignee to divulge any such beneficial services to the probate court leads to “[t]he only inference that can be deduced from the
The Public Administrator next relies on Burchell v. Strube (1955) 43 Cal.2d 828 [279 P.2d 1], to show that respondent here has the burden of showing the value of the services rendered. In Burchell the court, quoting from Estate of Larson (1949) 92 Cal.App.2d 267, 273 [206 P.2d 852], said: “ ‘Where the consideration is “grossly unreasonable,” the burden is upon the heir hunter [or other assignee] to prove their real value.’ ” (Id., at p. 836.) The problem with this argument is that a showing of “grossly unreasonable” consideration is apparently a precondition to shifting the burden of proof to the assignee. As already discussed, the Public Administrator offered no evidence going to the issue of reasonableness of consideration.
The Public Administrator argues that Estate of O’Donnell (1948) 85 Cal.App.2d 1 [192 P.2d 94], stands for the proposition that the court must actively inquire into the assignment to the heir hunter and that the assignment must have a “clear showing of justification” before payment may be made to the heir hunter. The factual difference between O’Donnell and the present case is that O’Donnell is concerned with an incompetent whose half sister and guardian assigned a partial interest in his share of the estate to the heir hunter. The court said there was a duty on the courts, guardian, and attorneys to preserve the estate of the incompetent since the incompetent, obviously, cannot do so. The present case involves 14 heirs, none of whom are incompetent and none of whom challenge the assignments. The added responsibility of a court to protect the interest of an incompetent heir just does not exist.
The Public Administrator contends that the assignments violate public policy because of the method by which the assignee obtains legal representation for the heirs. He argues that the practice of the assignee retaining its own counsel who represents the heirs at no extra cost to the heirs is a deceptive practice in violation of the Estate of Butler prohibition against unlawful practice of the law. The Public Administrator’s allegations may or may not be true. In the present case, however, he produced insufficient evidence to show such alleged illegal arrangements. The only conclusion that may be drawn from the record in this appeal is that the practice utilized here is legal.
The standard of review on appeal of a section 1020.1 motion is the same as the general rules for appellate review. The appellate court will
In summary, where, pursuant to a motion by the Public Administrator under Probate Code section 1020.1, the court gives the Public Administrator an opportunity to show some irregularity in an assignment or in the circumstances surrounding such assignment, and where the Public Administrator fails to do so, and if where the assignment is not invalid on its face and none of the parties to the assignment are challenging such assignment, the probate court may presume that such written assignment is valid without conducting a detailed inquiry.
The judgment is affirmed; the motion to dismiss the appeal denied.
Ashby, J., concurred.
1.
Also pending is a motion to dismiss the appeal on the ground that the Public Administrator does not have standing to appeal as he is not an aggrieved party. That motion is denied. He is a proper party for it is within his power to raise the section 1020.1 Probate Code motion initially.
2.
At least one other heir made assignments to Ferris & Co., another heir-hunting firm. The court found these assignments to be coupled with a power of attorney, and, therefore, void under Estate of Butler (1947) 29 Cal.2d 644 [177 P.2d 16, 171 A.L.R. 343],
3.
Section 1020.1 of the Probate Code reads as follows: “The court before making distribution of any property of a decedent to any assignee or transferee of any heir, devisee or legatee or before making distribution to any person other than an heir, devisee, or legatee pursuant to any agreement, request or instructions of any heir, devisee or legatee or of any attorney-in-fact of any heir, devisee or legatee may on the motion of any
4.
In Butler it was held that an “heir hunter” [nonlawyers] could not enforce agreements for compensation and accompanying powers of attorney under which he undertook to furnish legal services free, as unlawful practice of the law.