Beneficiary Failed To Show Fee Entitlement As A Matter Of Law.
In Morgan-Perales v. Savage, Case No. G052317 (4th Dist., Div. 3 Mar. 9, 2017) (unpublished), an assigned trial judge surcharged a trustee’s interest in a primary trust asset for failure to make rental payments, awarded a beneficiary attorney’s fees for successfully challenging trustee’s performance, and denied trustee’s requests for attorney’s fees in defending the lawsuit. Trustee appealed, obtaining for most purposes a successful reversal on most arguments.
The appellate court reversed the surcharge of interest ruling. With respect to awarding fees to the challenging beneficiary, the 4/3 DCA—in an opinion authored by Justice Aronson—found a lack of fee entitlement: (1) Probate Code section 17211(b) was to no avail because the trustee had reasonable basis to oppose beneficiary’s objections (a ruling which is a legal question reviewed de novo); and (2) the common fund doctrine did not apply because the dispute was one between only two parties.
That took the court to the denial of fees to the trustee for defending against the lawsuit. The appellate court determined that its reversal of the surcharge merits ruling required a reconsideration of this fee request, although it did note that there were plenty of equities to consider as far as what might be awarded to trustee on remand.