Trustee Had Sought About $1 Million Under Both Statutes.
In a lot of cases where pure or predominantly legal issues are involved, the lower court’s determinations on factual issues win the day. That is also the case in the fee proceeding area, where factual findings determine who actually prevailed if the record demonstrated the lower court followed the proper legal standards and real conflicting proof was involved. Hernandez v. Kieferle, Case No. B243909 (2d Dist., Div. 4 Apr. 3, 2014) (unpublished) demonstrates that in a probate context.
Appellant/sole beneficiary of a trust estate had won a prior reversal of a probate ruling where the lower court erred in finding that a rebuttable presumption applied to her as a care custodian to her step mother under a testamentary amendment divesting some benefits to step mom’s nearby neighbors, because blood/marriage exceptions were applicable so that the exception to the presumption applied. The appellate court also confirmed the second amendment by which appellant became entitled to the trust estate was valid as a matter of law versus the superseded amendment involving the nearby neighbors. Then, after remand, the probate court denied requests for around $1 million in fees in favor of trustee under Probate Code section 21351(d) or CCP section 2033.420.
The fee denials were affirmed on appeal.
Probate Code section 21351(d) does allow recovery of fees under specified circumstances, with the germane one being that a disqualified testamentary transferee such as a care custodian obtaining a transfer based on fraud, duress, menace, or undue influence can be liable for substantial attorney’s fees. Trustee argued that neighbors fit within this disqualified transferee status and had to bear substantial fees incurred by her in the probate proceeding. (Osornio v. Weingarten, 124 Cal.App.4th 304, 318 (2004) [acknowledging that a disqualified person shall bear all costs of the proceeding, including reasonable attorney’s fees which is can be a potentially “substantial” award].) The problem here was that the record only showed that nearby neighbors were providing incidental, insubstantial services of a “neighborly” nature rather than being a true disqualified care custodian. So, that basis for a fee award was gone.
Next, the appellate court explored the RFA costs-of-proof sanctions under CCP section 2033.420. That one, too, did not resonate based on the abuse of discretion standard, because the record showed there was conflicting evidence on trustor’s state of mind such that neighbors had a good faith basis to deny certain RFAs regarding susceptibility and undue influence.