Trial Court Denial on Bad Faith Basis Sustained Against Brother, Even Though Reasonable Cause Element Was Met.
Koppl v. Zimmerman, Case No. A146743 (1st Dist., Div. 1 Feb. 27, 2017) (unpublished) is a good illustration that in order to recover expenses from a beneficiary, a trustee has to prove both that a beneficiary in an accounting contest must took actions without reasonable cause (legal question) and with bad faith (factual question) under Probate Code section 17211(a) and Uzyel v. Kadisha, 188 Cal.App.4th 866 (2010). The problem in Koppl was that the trial judge denied there was bad faith in beneficiary's conduct, which is gauged under an abuse of discretion standard based on factual determinations. However, the trustee made an argument with a twist: trustee argued that sanctions were required based on a perceived difference between identical language in Probate Code sections 17211(a) and (b)—a distinction rejected by the trial and appellate courts. The trial court also decided the conduct was not sanctionable under Code of Civil Procedure section 128.5, which further showed no bad faith subjective mental state was demonstrated—even though the 128.5 ruling was discretionary also. Bottom line: no bad faith shown; no exposure under Probate Code section 17211.