Unreported / Non-Citable
Background
Pedro Fernandez and Nilda Moretti cohabited for 33 years without marrying. Pedro owned eight rental properties and executed a July 2010 will naming his daughter Deborah executor; it gave Moretti a life estate in their home and rents from two other properties, with the remainder to Deborah and Pedro's grandchildren. In October 2019 Pedro opened two Chase accounts naming Moretti pay-on-death beneficiary and granting her power of attorney. In March 2020 Chase closed the accounts without explanation, and in April 2020 issued three cashier's checks payable to Pedro totaling $900,383.99; Moretti took the checks and gave them to Pedro, who kept them at home.
Pedro entered hospice in July 2020 and died the next month without depositing the checks. Between January and August 2020 Moretti collected rental income from Pedro's properties, some in cash never deposited; weeks after his death she deposited $176,000 into her personal account and admitted at deposition the income belonged to Pedro. In January 2021 the will was admitted to probate and Deborah was appointed executor the following month. Deborah petitioned to determine ownership of the rental income and check proceeds; Moretti objected and filed her own petition.
At a March 2024 trial setting conference the probate court said the facts were undisputed and ownership could be decided as a matter of law. At the May 2024 hearing the court twice asked Moretti for an offer of proof supporting an evidentiary hearing; she cited a bank expert, the Chase manager, friends, the drafting attorney, and the pay-on-death documents. The court issued a minute order that the check proceeds and rental income belonged to the estate. After Moretti requested a statement of decision, the court ruled in July 2024 that none was required because no trial was held; Moretti appealed.
The Court’s Holding
The Court of Appeal affirmed. It denied Deborah's motion to dismiss the appeal: the May 2024 order was not immediately appealable because the court reserved jurisdiction by ordering a proposed statement of decision, and the July 2024 order was the appealable ruling. On the merits, the court held Probate Code sections 5302 and 5303 inapplicable because the Chase accounts no longer existed when Pedro died. Section 5302 covers sums remaining on deposit at death, but the funds were withdrawn when the accounts closed; section 5303, subdivision (c), eliminates survivorship rights as to funds withdrawn by a party, and Moretti cited no authority showing the cashier's-check transaction was not such a withdrawal. The form of the account at death controls distribution, so her claim to the proceeds failed as a matter of law.
Her constructive trust claim also failed: she could not show a right to the proceeds, one of the three required conditions, and she did not address the third condition, wrongful acquisition or detention; the argument was forfeited because she did not raise it before the May 2024 decision. The court found no abuse of discretion in declining a further evidentiary hearing: with no legal basis to exclude the assets from the estate, ownership could be decided as a matter of law, and testimony about Pedro's intent was immaterial because Moretti did not challenge the valid, uncontested will.
Key Takeaways
- A pay-on-death designation does not survive closure of the account before the account holder's death; the account's form at death controls distribution under Probate Code sections 5302 and 5303.
- Cashier's checks issued to the account holder after the accounts closed belong to the estate, not to the former pay-on-death beneficiary.
- A probate court may decide ownership of estate assets as a matter of law without a further evidentiary hearing when the material facts are undisputed and the party requesting a hearing offers no legal basis to exclude the assets from the estate.
- A constructive trust requires a specific, identifiable property interest, the plaintiff's right to that interest, and the defendant's wrongful acquisition or detention of it; Moretti failed the right-to-property condition and did not address the wrongful-act condition.
- An order reserving jurisdiction to prepare a statement of decision is not immediately appealable; the appeal lies from the later order confirming no further action will be taken.
Why It Matters
This unpublished decision reinforces that pay-on-death and survivorship rights attach only to an account existing at death; once the funds are withdrawn, the designation does not follow the proceeds into cashier's checks. It also confirms that probate courts need not hold a further evidentiary hearing when ownership turns on undisputed facts and a legal question, and it illustrates the forfeiture rule for theories not raised before the trial court issues its decision.