Moramarco v. Nowakoski

Summary

The California Court of Appeal affirmed, with directions, a Probate Code section 859 civil penalty against a former trustee who wrongfully misappropriated trust assets. The court held that the trustee’s inability to pay was not a mitigating factor for the mandatory statutory penalty and upheld the award of attorney fees. It directed the probate court to amend the judgment to clarify that postjudgment interest does not accrue on the prejudgment-interest amount; the opinion was certified for partial publication, excluding parts II(B) and II(C).

Holdings

1. Once the conditions of Probate Code section 859 are established—property recoverable under section 850 and a bad-faith taking—the statute imposes a mandatory penalty of twice the value of the property recovered, and the probate court may not consider the defendant's financial inability to pay or other mitigating factors in calculating that penalty.
2. Additional prejudgment interest was permissible because the damages were certain or capable of being made certain by calculation from the dates and amounts of the unauthorized transfers. The judgment nevertheless had to be amended to state that postjudgment interest does not accrue on the prejudgment-interest amount.
3. The probate court did not abuse its discretion in awarding $61,702.54 in attorney fees and costs. The trustee forfeited his challenge by failing to provide legal analysis or citations to supporting portions of the record.

Questions Presented

1. Whether a probate court may consider a trustee's inability to pay as a mitigating factor in calculating the mandatory civil penalty under Probate Code section 859.
2. Whether the probate court properly awarded additional prejudgment interest after the trustee paid restitution.
3. Whether the probate court abused its discretion in awarding the beneficiaries $61,702.54 in attorney fees and costs.

Disposition

affirmed