Probate: 4/3 DCA Remands For Recalculation/Reduction Of Surcharge Against Personal Representative Removed For Breach Of Fiduciary Duty, But Affirms Attorney Fees Award Despite Trial Court’s Erroneously Stated Statutory Basis

Personal Representative Repeatedly Failed To Timely File Accurate Inventory & Appraisal and Accountings With The Court, Spent Estate Funds Without Authorization, Showed Hostility Toward Beneficiary, Failed To File Tax Returns, And Failed To Understand The Effect Of The Pour-Over Will Executed By Decedent.

            In Karamooz v. Karamooz, Case No. G056897 (4^th Dist., Div. 3 April 27, 2020) (unpublished), decedent mother created a revocable trust and pour-over will – naming one of her sons as the sole beneficiary of the trust, and another son as the personal representative of her estate.

            When beneficiary son filed a Heggstad petition to avoid having to probate the will (Prob. Code, section 850(a)(3); Estate of Heggstad 16 Cal.App.4^th 943 (1993)), personal representative son objected and claimed the will was not a pour-over will.  Personal representative then filed a petition to probate the will, but repeatedly failed to meet deadlines for filing an Inventory and Appraisal, filed inaccurate accountings, failed to file required tax returns, spent estate funds without authorization or court approval, and showed hostility toward beneficiary – in addition to his failure to understand/acknowledge the effect of the pour-over will and act accordingly.  After several years of this, beneficiary successfully moved to have personal representative removed and surcharged for his breaches of fiduciary duty, and moved for an award of attorney fees.  Personal representative appealed.

            In an opinion authored by Justice Thompson, the 4/3 DCA affirmed the removal, but reversed and remanded the $500,000 surcharge against personal representative for a new judgment reducing and recalculating the surcharge to $80,000 for estate funds spent without authorization/approval, plus all liability for penalties and interest caused by personal representative’s failure to timely file tax returns. 

            As to the attorney fees, the 4/3 DCA agreed with personal representative’s argument that the award against him was not statutorily supported pursuant to the trial court’s reliance on Prob. Code section 11003(b) – which awards attorney fees for bad faith opposition in an accounting contest.  However, the attorney fees award was affirmed – with the 4/3 DCA finding the trial court justified in exercising its discretion to award fees under section 8804 for the repeated failures to timely make accurate inventory and appraisal filings, “regardless of [the trial court’s] stated basis.”