Metropolitan News-Enterprise


Tuesday, August 26, 2008


Page 3


C.A. Rules Against Chuck Yeager’s Daughter in Dispute With Stepmother


By a MetNews Staff Writer


In a family dispute involving the assets of famed test pilot Chuck Yeager held in a revocable living trust, Yeager’s adult daughter breached her duty as trustee by selling a property to the trust for its appraised value, the Third District Court of Appeal said.

In an unpublished decision Friday, the three-judge panel upheld a referee’s finding of breach by Susan Yeager, but modified the amount of damages.

Yeager, a retired Air Force brigadier general, was the first pilot to break the sound barrier. His exploits as a pilot garnered him considerable fame, and he drew income from his military pension, a disability pension, appearances in AC Delco commercials, speaking fees, and proceeds from the sale of autographed lithographs and memorabilia.

After the death of his first wife, Yeager formed a revocable living trust for his assets and served as cotrustee with his adult daughter, Susan Yeager. Susan Yeager handled the finances for the trust.

In1993. Susan Yeager and the trust purchased a 60-acre property in Pleasant Valley, in El Dorado County, and in 1997, the trust transferred its interest to Susan Yeager in exchange for $95,000.

Susan Yeager later split the parcel into two parcels, sold one and had two houses built  on the remaining parcel. She resided in one, and her father resided in the other.

In 2000, Yeager met Victoria D’Angelo and she moved in with Yeager a month later. Shortly thereafter, Yeager began putting much of his property in her name, after which, he oncr admitted, his relationship with his family “went to hell.”

By 2002, the friction between Susan Yeager and D’Angelo had increased to the point Susan Yeager wanted to move out. She sold the property to the trust for its appraised value of $1,345,000. 

Although she claimed she told he father about the sale, he never signed the deed to execute the transfer. She executed the transfer deed in her capacity as trustee. In exchange, she received cash, a condominium, a note, and cancellation of her debt to the trust for a total of $1,345,000.

When Chuck Yeager later filed a grant deed purporting to transfer a 50 percent interest in the condominium to D’Angelo, Susan Yeager filed suit to quiet title to the condominium.

The parties stipulated to have the dispute heard by a retired judge acting as a referee. The referee found that Yeager had acquiesced to his daughter’s handling of his finances until this dispute arose, but that the sale was done without Yeager’s informed consent and constituted a breach of Susan Yeager’s duties as trustee because she received more than the fair market value of the property because her debts to the trust with interest were forgiven by the transaction.

Judgment was entered, confirming ownership of the condominium in Susan Yeager but ordering her to reimburse the trust $850,599 for her profit on the transaction.

Writing for the appellate court, Justice Fred K. Morrison concluded substantial evidence supported the referee’s findings, but not the award of damages.

Acquiescence is not a defense to breach of trust, Morrison explained, thus Yeager’s consent to the sale did not eliminate Susan Yeager’s breach of trust where her father did not know the material facts of the transaction. Further, Morrison wrote, Yeager’s failure to discover his daughter’s breach does not relieve her of liability because her handling of the transaction was markedly inconsistent with past practices of consulting him on “big picture” items. 

Because her breach of trust in executing the land sale caused the trust to incur capital gains taxes, Morrison reasoned, Susan Yeager was liable for those expenses. But the referee should not have included the trust’s loss from the 1997 sale of its interest to Susan Yeager, nor the proceeds from Susan Yeager’s later partial land sale, in the damages calculation since neither were found to be a breach of trust, Morrison explained.

Morrison concluded that the evidence did not support an award of punitive damages or double damages under Probate Code Sec. 859 because there was no evidence that Susan Yeager had acted with an intent to injure her father. The correct amount of damages, he said, was  $359,561 plus simple prejudgment interest.

Presiding Justice Arthur G. Scotland and Justice Harry Hull joined Morrison in his opinion.

The case is Yeager v. D’Angelo, C052483.


Copyright 2008, Metropolitan News Company