Fourth District, Division 1 Affirms Fees and Sanctions Awarded in Long Running Battle Between Trust Beneficiaries.
Probate proceedings bring out all the nuances of human beings, in what frequently boils down to a struggle over trust or estate assets between disgruntled family members. However, California does authorize awards of attorney’s fees to professionals that perform services for trusts/estates as well as does allow for imposition of sanctions on some actions brought in bad faith. The next case illustrates these principles in practice.
In Piro v. Piro, Case Nos. D052776 & D053529 (4th Dist., Div. 1 Feb. 27, 2009) (unpublished), sons of a mother establishing a trust with three pieces of real property—three in Oceanside and one in North Hollywood—vied over who got what and over whether the trustee (one of the sons) had complied with his duties to the trust. A non-trustee son Jeffrey brought many probate petitions seeking to remove brother Gary and obtain trust distributions and various in-kind asset divisions. Jeffrey canceled a mediation scheduled by Gary and even filed a trustee removal petition based on allegations of a secret deal that were denied between his other two brothers (and allegations for which he had no further support). Jeffrey effectively lost most of his probate petition requests, with the end result being that the trial court awarded $18,704.87 in total attorney’s fees to the trust’s attorneys and assessed $3,597 in attorney’s fees against Jeffrey as sanctions for bringing an unwarranted trustee removal petition.
Jeffrey appealed, but did not obtain any change in result.
In Case No. D052776, the appellate panel determined that attorney’s fees were authorized under the trust as well as California law. (Prob. Code, sec. 1247; Hollaway v. Edwards, 68 Cal.App.4th 94, 99 (1998); 13 Witkin, Summary of Cal. Law (10th ed. 2005) Trusts, sec. 60, p. 634.) Because trustee Gary was entitled to defend against claims of misfeasance against him at the trust’s expense, no discretion was abused in awarding fees for these efforts (to be paid from the trust).
In Case No. D053529, the probate judge’s award was predicated on Probate Code section 15642(d), which grants discretion to award costs (including attorney’s fees) if the trustee removal petition was brought in bad faith and removal would be contrary to the settlor’s intent. Both elements were satisfied, because mother’s trust had specifically declared that Gary should serve as trustee until death/incapacity/termination (settlor intent prong) and because the removal petition allegations were not borne out by the evidence or actually refuted by much of the proof (bad faith prong). “A trial court can infer bad faith from evidence that the party tendered false allegations utterly devoid of merit (Monex International, Ltd. v. Peinado (1990) 224 Cal.App.3d 1619, 1625-1626), and the inference draws added weight when there is evidence the party tendering such claims bear animosity toward the opponent (Estate of Ivey [1994] 22 Cal.App.4th [873] at p. 882), as is present here.” (Slip Opn., at p. 16.)