Beneficiaries Did Get Fees From Trust “Common Fund” Doctrine, But Did Not Hit Trustee For Fee Recovery.
Let us tell you, probate cases are tough and pit familial members at each other in bitter disputes. The next case is no different and shows how both lower/appellate courts labor with these difficult controversies.
Two sisters, trust beneficiaries, did recoup their attorney’s fees under a “common fund” doctrine theory against the trust—a somewhat self-defeating exercise. Instead, they wanted to recover fees from ex-trustee brother personally, who was found to have conflicts of interest and to have breached his fiduciary duties as trustee. The trial court refused to assess fees against trustee personally, even though he was only allowed limited payment for his own attorneys’ work (with the rest charged against trustee’s beneficial interest in the trust). Sisters appealed the denial of their fees against brother in Cirillo v. Crooks, Case No. D054247 (4th Dist., Div. 1 Mar. 2, 2010) (unpublished).
Sisters were unsuccessful on appeal.
Aside from procedurally failing to challenge the lower court’s amended statement of decision in the proper manner, sisters failed to demonstrate that the lower court abused its discretion in failing to award fees under Probate Code section 17211(b). That provision allows the lower court discretion to award a beneficiary costs and fees where a trustee’s opposition to an accounting battle was without reasonable cause and in bad faith. In such circumstances, a discretionary fee award shall be charged to the trustee, not the trust. The facts demonstrated that brother did not plunder the trust estate and properly segregated certain rents, which led to the plausible conclusion that the trust (rather than brother) should pay sisters’ attorney’s fees according to the Court of Appeal’s decision.
The fee denial order was affirmed, with brother and sisters to bear their own costs on appeal—all ordered in the case of the acrimonious probate fee dispute.
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