Court of Appeal Examines Various Provisions on Awarding Probate Fees and on Having Trust Pay the Fee Awards.
In two somewhat companion cases, the Fourth District, Division 2 has done a nice job of examining various Probate Code statutes relating to the award of attorney’s fees and where they should be paid from.
The factual and procedural backdrop for these decisions was an ongoing dispute between stepmother, the trustee of the father’s trusts, and her stepchildren. Stepmother was eventually removed as trustee, taking many actions for her benefit but also having to defend accountings that were beneficial for the trusts. Eventually, the lower court ordered payment of $120,000 in fees/costs to stepchildren and $40,401 in fees/costs to stepmother, payable from the trust income. In a separate hearing, the lower court awarded stepmother only $5,000 in attorney’s fees (out of a requested $66,112.50) for responding to numerous accounting objections and dealing with trust administration issues. Stepmother appealed the probate court’s orders directing payment of fees from the trust income and limiting her recovery of fees to $5,000 in case #1.
The first order was affirmed and second reversed in case #1, Raskov v. Raskov, Case No. E044285 (4th Dist., Div. 2 Dec. 21, 2009) (unpublished). Because stepmother’s mismanagement of a trust for the L.A. property created the need for stepchildren’s trustee removal steps, Probate Code sections 16370 and 16421—provisions allowing payment of expenses of income in certain circumstances and with a view to achieving
equity—trumped Probate Code section 16371—which provides that trust-protective activities are usually paid from trust principal. In essence, stepmother was charged with having to pay fees from trust income, an adequate remedy that did not justify the double damage penalty set forth in Probate Code section 859 (a request denied by the probate court). That brought the appellate court to the second order awarding only $5,000 in fees. This one was reversed and remanded because the panel felt that stepmother had taken some trust administration activities that did not justify limiting fees only to accounting objections. (Prob. Code, sec. 15684(a).) The matter had to be remanded, although the reviewing court did agree that stepmother’s $66,112.50 request was excessive and more specificity was required in the submitted billing entries.
Case #2, Raskov v. Raskov, Case No. E042666 (4th Dist., Div. 2 Dec. 21, 2009) (unpublished) involved an appeal by stepson after the probate court sanctioned him $18,000 under Code of Civil Procedure section 128.7 in bringing a frivolous double damages penalty section 859 motion (most of the money representing fee recoupment to stepmother). Stepson appealed, but was unsuccessful. Stepson only asked for 859 damages in a subsequent motion after the probate court indicated that it was not going to award them anyway in the main proceeding. In effect, the lower court believed that stepson was trying to cause severe distress to his stepmother and should have appealed thee earlier 859 denial ruling. The sanctions ruling was not an abuse of discretion.