Probate: $263,025 Fee Award Under Probate Code Section 17211(b) Is Reversed On Appeal

 

Fourth District, Division 3 Finds Grandchildren’s Action Did Not Contest a Trustee’s Account, So That There Was No Fee Entitlement under Section 17211(b) –Soria Tale.

     An award of attorney’s fees under California law always depends on answering a crucial preliminary question—is there a fee entitlement basis based on contract or statute. The answer to this question, either way, is pivotal. Respondents who did win fees below were unable to sustain the fee entitlement basis on appeal so that—much like a reversal of a judgment with fees—their fee award went POOF!

     The case we are reviewing comes from our own local Fourth District, Division 3, in a 3-0 opinion authored by Justice Fybel. The decision came down in Soria v. Soria, Case No. G041661 (4^th Dist., Div. 3 June 14, 2010) (certified for publication).

     Soria involved a situation where grandchildren prevailed in a civil action against grandparents where they disputed the existence of a trust, but persuaded a civil trial judge to award substantial fees of $263,025 (out of a requested $296,510.50) against grandparents against Probate Code section 17211(b)—which provides that fees are awardable by a probate court to a trust beneficiary who successfully contests the trustee’s accounting. Grandparents, displeased about the fee award (if not the overall controversy), appealed the fee award against them.

     In this one, age won over beauty (or youth), so to speak.[1]

     The main problem was that the matter did not involve a classic probate dispute in which the grandchildren were contesting a trustee’s accounting. Instead, they filed a civil complaint where the dispute was over whether a trust even existed. This type of controversy, held the appellate court, did not invoke the section 17211(b) fee shifting provision, because a surcharge against the trustee’s compensation or interest cannot be accomplished in a civil action.

     Looks like a lot of appellate attention in this case focused on Leader v. Cords, 182 Cal.App.4^th 1588 (2010), a Fourth District, Division 1 decision where section 17211(b) was held to apply to a beneficiaries’ petition to compel a distribution [a decision reviewed in our March 24, 2010 post]. Justice Fybel concluded that Leader was distinguishable—after all, (1) the beneficiaries there pursued a probate petition rather than a civil action, and (2) the petition to compel a distribution arose from the trustee’s accounting, something not at issue in Soria because the parties disputed the trust’s existence.

     The Fourth District, Division 3 declined to expand the scope of section 17211(b) to include the grandchildren’s civil action because “[t]o do so would in effect turn section 17211(b) into a statutory basis for recovery of attorney fees in virtually any case in which the existence of a trust is in dispute or any action of a trustee is challenged. We do not discern any intent by the Legislature to reach that result by enacting section 17211(b).”

     BLOG UNDERVIEW—For you probate practitioners, see our March 25, 2010 post on Leach v. Kleveland for an unpublished Fourth District, Division 1 decision exploring section 17211(b).

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[1] Upon exiting an elevator, Claire Boothe Luce held the door open for Dorothy Parker, and said, "Age before beauty." To which Dorothy Parker replied, "Pearls before swine."