Trustee Was Reasonable in Fighting Beneficiaries’ Accounting Challenges, Though, Such That Fees Reimbursed To Beneficiaries Had To Be Reversed and Retried.
In the probate area, benefit to a trust is what justifies payment of attorney’s fees incurred by the trustee. (Donahue v. Donahue, 182 Cal.App.4th 259, 268 (2010).) Beneficiaries, in accounting challenges, usually bear their own attorney’s fees unless the trustee’s opposition to the challenges was “without reasonable cause and in bad faith” under Probate Code section 17211. (Uzyel v. Kadisha, 188 Cal.App.4th 866, 924 (2010).)
These principles were in play in Davis v. Rael, Case No. B244897 (2d Dist., Div. 2 June 2, 2014) (unpublished).
There, the lower court did disallow (surcharge) some attorney’s fees claimed for payment by the trust because it had doubts some of the time actually benefitted the trust. Although this was reviewed and sustained under the deferential abuse of discretion standard, the appellate court did correct a “serious” mathematical error which had resulted in surcharging time unfairly (by $117,048.36). Who says reviewing courts cannot “do the math” themselves?
Occupations related to mathematics. Blanche L. Anish. Between 1936 and 1941. Federal Art Project. Library of Congress.
Then, the appellate court reversed the lower court’s surcharge of the trust for beneficiaries’ efforts in an accounting contest opposed by the trustee. Unlike the lower court, based on reversing some of the beneficiaries’ objections based on a lack of evidence, the panel found trustee did partially prevail on many of the issues below. This meant that ruling by which $317,912 in fees were ordered to be reimbursed to beneficiaries had to be reversed and remanded for a new trial with some directives for the lower court’s guidance.
