Pool-O'Connor v. Guadarrama - Case Brief

Case Number: F083954
Court: California Court of Appeal, Fifth Appellate District
Date Filed: 2025‑09‑02

Holding

The court held that the probate court’s order was proper except for a clerical error misstating the amount of the subject funds; the error was corrected on remand, and the court affirmed the reconveyance of the Subject Property and the surcharge of the former trustee for breaches of fiduciary duty.

Narrative

Lead – In a sprawling dispute over a family trust, a California appellate panel upheld a lower‑court finding that a trustee‑successor who also served as the decedent’s attorney‑in‑fact had improperly turned a joint‑checking account into a personal windfall and illegally transferred a trust‑owned residence to himself. The court corrected only a typographical misstatement of the amount owed, leaving the substantive sanctions intact.

Procedural History – Albert R. Pool died on 28 Feb 2018 leaving the Albert R. Pool Family Revocable Trust (originally dated 1992, amended and restated 2013). Christopher Guadarrama, Albert’s nephew, was appointed attorney‑in‑fact, executor of a pour‑over will, and successor trustee of the amended trust. Beneficiaries Kathy Pool‑O’Connor, Rachelle Lapham (adopted granddaughter), and Sharon Whiteside filed a petition in Kern County Superior Court to remove and surcharge the trustee for breach of trust, to determine ownership of certain assets, and to seek damages under Probate Code § 859. After a bench trial, the probate court issued an order (Dec 15 2021) ordering (1) reconveyance of 433 South Drive (“Subject Property”) to the trust, (2) a surcharge of $335,779 to the new trustee (including amounts for withdrawals from a joint account), (3) denial of double damages, trustee fees, and various reimbursement requests, and (4) an affirmation that the joint account was not a trust asset. Christopher appealed limited portions of that order.

Facts – Albert’s sole bank account was a joint checking account with his sister‑in‑law Maxine until 2013, when Christopher was added as an authorized signer. Between 2016 and 2017 Christopher deposited three large sums—$59,516.24 (sale of a mini‑mart property), $99,720.46, and $104,922.07—into the account. He could not recall the source of the latter two deposits. After Albert’s death, Christopher wrote himself checks for $200,000 and $50,000, leaving a balance of $6,712.95. He also loaned $25,000 from the account to a cousin, drafting a promissory note payable to the trust, yet testified he believed the money was his personal property.

The trust’s real‑property provisions granted Maxine a life‑estate in 433 South Drive, which lapsed because Maxine predeceased Albert. In November 2018 Christopher’s counsel sent beneficiaries a “notice of proposed action” stating that, absent objections within 60 days, the property would be transferred to Christopher. No objections were filed, and Christopher deeded the house to himself on 31 Jan 2019, recording the transfer as a “distribution from Grantor Trust.”

Beneficiaries subsequently filed removal and surcharge petitions, alleging (a) that the property transfer violated Probate Code § 16501 (which bars a trustee from using a notice of proposed action to sell or exchange trust property to himself), and (b) that Christopher’s handling of the joint account breached his fiduciary duties as attorney‑in‑fact under Probate Code §§ 4231, 4233, 4264, 4266.

Issues – The appellate court addressed three discrete questions:

Whether the probate court erred in ordering reconveyance of the Subject Property to the trust.
Whether the probate court erred in requiring Christopher to pay $205,643 (plus interest) for the two large deposits made into the joint account.
Whether the probate court erred in ordering payment of $28,059 (plus interest) for withdrawals made from the joint account prior to Albert’s death.

Holding and Reasoning

Property Transfer – The court affirmed the lower court’s reconveyance order. The trust expressly limited the disposition of the Subject Property to a sale by the trustee, not a self‑dealing “distribution.” Probate Code § 16501(d)(5) and (d)(6) prohibit a trustee from using a notice of proposed action to sell or exchange trust property to himself. The appellate panel rejected Christopher’s semantic argument that the term “distribution” in the notice insulated the transaction, emphasizing that the statutory language controls and that the lower court correctly characterized the deed as an unauthorized sale/exchange. The court also noted that the beneficiaries’ silence after the notice did not constitute consent, as the notice itself was invalid for the contemplated self‑sale.

Subject Funds (Deposits) – The appellate court found substantial evidence that Christopher, acting as attorney‑in‑fact, deposited $204,642.53 of Albert’s proceeds into a joint account in which he held unfettered personal access. Under Probate Code §§ 4231, 4233, 4264, an attorney‑in‑fact must keep the principal’s property separate, may not make gifts to himself, and may not create a survivorship interest absent express authority. The deposits therefore constituted a breach of fiduciary duty and a prohibited gift. The court affirmed the surcharge, but noted a clerical error: the probate court listed the amount as $205,643, whereas the record shows $204,642.53. The appellate court remanded for correction of the figure and the corresponding interest.

Pre‑Death Withdrawals – The court upheld the finding that Christopher withdrew $42,059 from the joint account before Albert’s death, exceeding the annual gift‑tax exclusion and violating the POA’s limitation that gifts be “in proportion authorized in the will, trust, and other estate‑planning documents.” The appellate panel affirmed the $28,059 surcharge (the amount exceeding the permissible one‑seventh share of the residual interest) plus interest, finding no error in the lower court’s calculation.

Conclusion and Impact – The decision reinforces two core principles for California probate practice: (1) trustees cannot sidestep § 16501’s prohibition on self‑dealing by labeling a transaction a “distribution,” and (2) attorneys‑in‑fact must observe the same strict segregation and anti‑gift rules that apply to fiduciaries under the Probate Code. The court’s willingness to correct a simple transpositional error while leaving the substantive sanctions untouched signals that appellate review will not disturb well‑supported findings of breach, but will ensure precise accounting. Practitioners should heed the ruling when drafting notices of proposed action and when serving as dual fiduciaries, ensuring that any transfer of trust assets to a trustee or related party complies with § 16501 and that attorney‑in‑fact accounts are kept distinct from personal accounts.

Referenced Statutes and Doctrines

Probate Code §§ 16501(d)(5) & (d)(6) – Prohibits a trustee from using a notice of proposed action to sell or exchange trust property to himself or his attorney.
Probate Code § 859 – Allows surcharge of a trustee for breach of trust.
Probate Code §§ 15642 – Suspension of trustee powers.
Probate Code §§ 4231, 4233, 4235, 4236 – Fiduciary duties of an attorney‑in‑fact; standard of care; record‑keeping.
Probate Code §§ 4264(a)–(f) – Restrictions on gifts, survivorship interests, and beneficiary designations by an attorney‑in‑fact.
Probate Code §§ 4266 – General fiduciary duties.
Probate Code § 4231.5 – Remedies for breach by an attorney‑in‑fact (loss, depreciation, interest).
California Rules of Court 8.1105(b), 8.1110 – Certification for partial publication.

Key Cases Cited

Jessup Farms v. Baldwin, 33 Cal.3d 639 (1983) – Standard of review for factual findings.
Schmidt v. Superior Court, 44 Cal.App.5th 570 (2020) – Deference to trial‑court credibility determinations.
Pena v. Dey, 39 Cal.App.5th 546 (2019) – De novo review of statutory construction.
Golden Door Properties, LLC v. County of San Diego, 50 Cal.App.5th 467 (2020) – Waiver of issues not raised in brief.
Dills v. Redwoods Associates, 28 Cal.App.4th 888 (1994) – Limits on appellate courts creating arguments for parties.
Schubert v. Reynolds, 95 Cal.App.4th 100 (2002) – Attorney‑in‑fact gift prohibited under § 4264.
Estate of Huston, 51 Cal.App.4th 1721 (1997) – Void gifts by attorney‑in‑fact absent written authority.
In re Marriage of Falcone & Fyke, 203 Cal.App.4th 964 (2012) – Interpretation of ambiguous orders.
In re Marriage of Samson, 197 Cal.App.4th 23 (2011) – Use of record to resolve ambiguity.

These authorities collectively shape the appellate court’s analysis and provide a roadmap for practitioners navigating trustee‑successor and attorney‑in‑fact duties in California probate matters.

← Back to Case Summary