Justia Trusts & Estates Opinion Summaries

In 2015, the court of appeal upheld the probate court’s decision to grant the petition of Alexander Hughes, the sole noncontingent trust beneficiary (and trustor Mark Hughes’ only child), to suspend and remove trustees due to their breach of trust in failing to exercise reasonable prudence in connection with the trust’s sale of Tower Grove, a 157-acre parcel of previously undeveloped Beverly Hills real property. A subsequent order allowed the former trustees to withhold from the successor trustee and Alexander Hughes, some, but not all, of a collection of documents identified on a supplemental privilege log submitted by the former trustees under court order. The documents, which are from the trust’s legal files and relate to two trust accountings submitted by the former trustees prior to their removal, were withheld on the basis of attorney-client privilege. The court of appeal reversed in part, finding that the probate court failed to consistently and appropriately apply the legal standards prescribed by the California Supreme Court. View "Fiduciary Trust International of California v. Klein" on Justia Law

The beneficiary of a trust seeks the value of “opportunities lost” resulting from the trustees’ refusal or neglect to distribute trust assets to the beneficiary. William Morgan created an irrevocable subtrust for the benefit of his daughter, Beverly. The subtrust started with an equity value of $67,500, and grew to the value of over $725,000. Beverly caused the succesor trustee to file suit alleging that if Beverly had been made aware of the subtrust, she would have used its assets to prevent the loss of her home. The trial court entered judgment in favor of the trustees. The court concluded that, in the absence of damages, Beverly has not established her claim for breach of fiduciary duties. The court also concluded that the record supports the trial court’s conclusion that the cotrustees did not breach their fiduciary duties to Beverly. Accordingly, the court affirmed the judgment. View "Williamson v. Brooks" on Justia Law

A "squabble" erupted between family members over the property of the deceased patriarch. The patriarch-settlor appointed defendant Melissa Reynoso (a granddaughter of the settlor) as trustee. In this proceeding, the trial court determined Reynoso was the most reliable and credible of the family members. The trial court found that other family members were not credible. Reynoso sold real property of the trust to Karen Bartholomew (a daughter of the settlor). Plaintiff Anthony Pizarro (a grandson of the settlor) filed a petition for relief against Reynoso concerning the sale of the real property. The court denied the petition and ordered Pizarro and others to pay the trust’s attorney fees and costs. On appeal, Pizarro contended the trial court erred in finding that Reynoso acted properly as trustee. However, the Court of Appeal concluded he failed to make a focused, organized, and coherent argument for why the Court had to reverse the order. Therefore, the Court concluded he forfeited the argument. Pizarro and Bartholomew contend that the award of attorney fees and costs against them was improper. The Court reversed the award of attorney fees and costs to the extent it imposed personal liability, rather than liable solely from their shares of trust assets. In all other respects, the Court affirmed. View "Pizarro v. Reynoso" on Justia Law

In 2012, B.C., age 30, suffered cardiac arrest and brain damage from the use of methamphetamine and alcohol. She initially lived with and was cared for by her mother. When her mother died, B.C. inherited $450,000. She also received disability payments. Although she had limited cognitive function, she subsequently married Jesse, with whom she had been “partying” at the time of her cardiac arrest. In 2014, B.C.’s aunt, C.S., sought appointment as probate conservator. Through counsel, B.C. opposed the petition. Jesse participated in hiring and advising the attorney. The court appointed the Ventura County Public Defender to represent B.C. An appointed conservator for B.C.’s estate sought reimbursement of $30,000, for disability benefits that Jesse had diverted to himself. Jesse has no assets and is responsible for five children. After a bench trial, the court appointed C.S., Prob. Code 1800. The court of appeal affirmed. Probate conservatorships do not require a personal waiver of the right to a jury trial because the proceedings pose no threat of confinement and are conducted according to the law relating to civil actions, including trial by jury if demanded by the proposed conservatee. B.C.’s attorney had authority to waive a jury trial on her behalf, even if the court failed to recite that B.C. had a right to a jury. The record supports the finding that B.C. cannot take care of her own needs, nor can her husband be trusted to do so. View "Conservatorship of B.C." on Justia Law

The testator, Margor Rachael Dayan, the mother of plaintiff and defendant, had an interest in commercial real property located in North Hollywood. Her will conveyed all her rights, title, and interests in the property to plaintiff’s trust. Plaintiff filed a petition for an order to establish that Ms. Dayan’s estate had title to the property in its entirety. Defendant opposed the Probate Code section 850, subdivision (a)(2) petition. The probate court ruled defendant owned a one-third interest in the property and denied plaintiff’s judgment on the pleadings motion. The court concluded that the probate court did not err by denying plaintiff's petition where substantial evidence supports the probate court's findings. In this case, the probate court found Ms. Dayan intended to convey a one-third interest in the property to defendant. The court also concluded that the probate court correctly denied plaintiff’s judgment on the pleadings motion. View "Estate of Dayan" on Justia Law

David Pratt obtained court orders requiring his ex-wife, Cynthia Vedder, to pay child support and expenses. Vedder was the beneficiary of a trust established by her grandparents. Pratt filed a petition to compel Robert Ferguson, the trustee of the Borgert Vedder and Nellie A. Vedder Revocable Trust, to satisfy the orders from Vedder's share of the trust estate. The trial court denied the petition based on a clause in the trust that prohibited the Trustee from making certain distributions if they would become subject to Vedder's creditors' claims (the shutdown clause). After review, the Court of Appeal held that, notwithstanding the shutdown clause, Probate Code section 15305 gave the trial court discretion to order a trustee to make distributions of income and principal to satisfy the final child support orders. Pratt's petition also sought the imposition of a judgment lien on Vedder's interest in the trust estate to satisfy a community property judgment that he held against her. The trial court relied on the shutdown clause to deny the petition for a lien. Because Pratt was entitled to a judgment lien on the trust to satisfy the community property judgment, pursuant to the relevant provisions of the Probate Code and the Code of Civil Procedure, the Court of Appeal reversed that portion of the trial court's order too. View "Pratt v. Ferguson" on Justia Law

Trust I, established by Maryon and Robert, became irrevocable when Maryon died in 1994. Robert died in 2013. Months later, Maryon’s son, Funsten, filed a “safe harbor” application, requesting a declaration that he would not violate a “no-contest” clause in Trust I by filing a petition to establish that he is its sole successor trustee, notwithstanding that Robert designated an additional co-successor trustee after Maryon died. The probate court denied the application. The executors of Robert's probate estate sought a determination that Funsten violated no-contest clauses in Trust I and in Robert’s will by filing creditor’s claims against Robert’s probate estate to recover damages for the allegedly improper removal of trust assets. The trial court found that Funsten’s conduct constituted a contest of Robert’s will, but did not constitute a contest under Trust I. The court of appeal held that Funsten was not entitled to a ruling on the merits of his safe harbor application because that statutory procedure has not been available since former Probate Code section 21320 was repealed in 2010. The probate court correctly found that Funsten did not violate the Trust I no-contest clause by filing creditor’s claims against Robert’s probate estate, but erred by finding a contest of Robert’s will. Funsten is not a beneficiary of Robert’s will and could not have violated the no-contest clause in that instrument as a matter of law. View "Funsten v. Wells Fargo Bank" on Justia Law

Defendant Clyde Greco, Jr. was the trustee of his parents’ trust and the administrator of their estates. He used money from the trust and estates to fund litigation against his sister and others, purportedly to recover money they owed to the trust and estates. After he allegedly spent considerably more money on litigation than he could have possibly recovered, his sister, plaintiff Cara Lyn Greco, brought two lawsuits against him, one at the trial court and one at the probate court, to recover the money he spent, plus penalties. She claimed the prior litigation was a personal vendetta. Clyde Jr. responded to each lawsuit by filing separate special motions to strike pursuant to Code of Civil Procedure section 425.16. In each case, the special motion to strike was denied. On appeal, Clyde Jr. contended he met his burden on the first prong of section 425.16 by establishing that Cara Lyn’s claims arose from protected petitioning activity, funding litigation. He further argued that Cara Lyn could not meet her burden on the second prong of section 425.16 to submit evidence to establish a prima facie case of each claim because all her claims are barred by the litigation privilege of Civil Code section 47, subdivision (b). The Court of Appeal found the gravamen of most of Cara Lyn’s claims was the alleged wrongful taking from the trust and estates and that was not a protected activity under section 425.16. The courts properly denied Clyde Jr.’s special motion to strike as to these claims. The one exception was Cara Lyn’s claim for constructive fraud based on Clyde Jr.’s alleged misrepresentations about the underlying litigation. While Clyde Jr.’s statements about the litigation are protected activity, Clyde Jr. did not show it was covered by the litigation privilege. The Court remanded this matter back to the probate court for a determination of whether Cara Lyn met her evidentiary burden under the second prong of section 425.16 analysis. View "Greco v. Greco" on Justia Law

Borel's trust states that, upon Borel’s death, a parcel of the trust’s real property is to be distributed to the East Bay Regional Park District for the purposes of establishing an agricultural park. Part of the property is also subject to an option agreement between Borel and Corrie. After Borel’s death, Corrie sought an order instructing the trustee to convey a portion of the property to him pursuant to the option agreement. The District opposed that petition, and filed a competing petition under Probate Code section 17200, seeking an order authorizing the trustee to distribute the property to the District and to receive an $800,000 loan on behalf of the trust. The probate court granted the District’s petition. The District subsequently petitioned the probate court (section 1310(b)) to authorize the immediate distribution of the land and acceptance of the loan while appeal was pending. The order granting that motion was also appealed. While those appeals were pending, the probate court held a trial and found Corrie’s option unenforceable. A third appeal followed. The court of appeal dismissed in part, noting that under section 1310(b), the actions taken by the trustee are valid, regardless of the outcome on appeal. The court affirmed that the option agreement is void and unenforceable. View "East Bay Reg'l Park Dist. v. Griffin" on Justia Law

At the center of this appeal was a dispute over the ownership of certain real property between appellant Scott Walters, as the administrator of his father Randy Walters' estate and Randy's former girlfriend, respondent Valerie Boosinger. A 2003 deed named Randy and Boosinger as owners in joint tenancy of the Property. Upon Randy's death in 2013, Boosinger claimed sole ownership of the Property as the surviving joint tenant. Scott brought a quiet title claim premised on the theory that the grant deed was void ab initio. The Court of Appeal rejected Scott's claim on appeal that such a claim could be brought "at any time." Instead, the Court concluded that the claim was subject to a statute of limitation and that Scott failed to demonstrate that the trial court erred in concluding that his quiet title cause of action was time barred. Scott also contended that he properly stated a claim for quiet title premised on the alternative theory that Randy and Boosinger severed their joint tenancy in the Property prior to Randy's death. As to this contention, the Court of Appeal concluded that Scott failed to sufficiently allege facts demonstrating such severance and that he did not demonstrate that he could amend his complaint to properly allege a severance of the joint tenancy. Accordingly, the Court concluded that Scott did not properly state a quiet title claim pursuant to this alternative theory either. View "Walters v. Boosinger" on Justia Law