Probate: Where Beneficiary’s Petition For Distribution/Accounting Seen As Driven More By Emotion Than Necessity, Denial Of Attorney’s Fees For Getting Some Results Not Erroneous

Probate Court’s Conclusion Of No Bad Faith By Trustee Was Factual And Deferential Standard Meant It Was Held Up On Appeal.

            The opinion in Mappus v. Mendonca, Case No. A149974 (1^st Dist., Div. 4 June 20, 2019) (unpublished) demonstrates that motives for probate proceedings do make a difference and that a lower court determination of “no bad faith” has a very persuasive value on appeal (given it is factual finding and entitled to deference).

            In this one, brother trust beneficiary engaged in battles against trustee (a friend of his grandparents, after he was replaced as trustee) with respect to distributions, holding back reserves, and a trust accounting timing.  (The other trust beneficiary was brother’s sister.)  Trustee indicated, in response to brother’s demands, that an accounting would be forthcoming, but brother brought a petition to obtain distributions, to challenge reserves, and to force the accounting, with the accounting delivered shortly after the petition was filed in line with what trustee indicated before.  Although partially prevailing with respect to obtaining distributions, the probate court denied other relief and found that trustee’s accounting actions were not undertaken in bad faith.  The probate court awarded $10,000 in attorney’s fees to trustee’s attorney and denied brother’s request for attorney’s fees.  Brother appealed.

            The 1/4 DCA affirmed.

            Because trustee provided the accounting as promised and the probate court found “no bad faith,” these factual conclusions were found to be supported with substantial evidence in light of the deferential review accorded to them on appeal.  (In this area, bad faith accounting fee-shifting is discretionary under Probate Code section 17211(b) anyway, with both subjective bad faith and objective unreasonableness needing to be shown, see Uzyel v. Kadish, 188 Cal.App.4^th 866, 926-927 (2010)).  Ultimately, the appellate court found that brother’s actions were driven more by emotion than necessity, given that positive actions by trustee happened fairly quickly anyway.  Sister should not have to pay any costs or fees, because brother’s activities only benefited himself, not the trust.  Finally, it was no abuse of discretion to award $10,000 in fees to trustee’s attorney.

            BLOG COMMENT—The appellate court has an interesting discussion of whether a trustee’s attorney’s bad faith could be imputed to the trustee.  Although implying it could, there was no evidence that to support attorney’s egregious bad faith, so the issue did not need to be squarely confronted on appeal.