Broad Equitable Powers Extend To Making Trust Liable; Probate Code Section 17211(b) Exception Not Relied On By Trial Court, Mandating Reversal of Fee Award.
After a prior remand from an earlier appellate decision, a trial court finally adjudicated the rights of two former co-habitants (male and female) having a Marvin agreement to own property through a trust. Female was entitled to half interest in a house and male breached duties of loyalty for not paying rent or renting to a third party for the benefit of female. Then, the trial court awarded female attorney’s fees she had incurred in litigating her claims against Kimball (a trustee), individually, after remand from the prior appeal. $123,963 was the fee award, prompting an appeal from male.
The Fourth District, Division 1 reversed in McClutchey v. Kimball (McClutchey II), Case Nos. D060744/D061886 (4th Dist., Div. 1 Aug. 22, 2013) (unpublished).
The problem was that the trial court relied on authority allowing the probate court broad equitable powers to award attorney’s fees out of the trust, but not award them against the trustee individually. (Hollaway v. Edwards, 68 Cal.App.4th 94, 98 (1998); Rudnick v. Rudnick, 179 Cal.App.4th 1328, 1333 (2009).) The only provision allowing otherwise, Probate Code section 17211(b) [where trustee’s opposition to a beneficiary’s accounting contest was done unreasonably and in bad faith], was not cited by the parties and the probate court made no findings as to its applicability. Based on the lack of fee entitlement, the appellate court reversed the fee award against trustee in his individual capacity.
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