Probate: Attorney’s Fees Made Payable By The Trust For Trustee Beating Back Misconduct/Malfeasance Claims As To Trustee’s Accountings Were Proper

Broad Equitable Powers Of The Probate Court So Allowed, Even Though Section 17211(a) Was Denied As A Fee Entitlement Basis.

            In Key v. Tyler, Case No. B298739 (2d Dist., Div. 2 Aug. 30, 2021) (unpublished), trustee successfully defended accountings from charges of misconduct, self-dealing, and malfeasance as brought by a sister beneficiary of a family trust.  The lower court awarded fees to the trustee for prevailing, payable out of the trust, finding subjective bad faith but not that the objection lacked reasonableness—expressly denying fees under Probate Code section 17211(a), a fee-shifting provision we have discussed often as relating to accountings in our “Probate” category.

            The appellate court affirmed.  Beneficiary argued that there was no fee entitlement based on the denial of fees under the statutory provision, but fee entitlement can be based on the probate court’s broad equitable powers to administer the trust.  (Pizarro v. Reynoso, 10 Cal.App.5^th 172, 183 (2017.)  Also, the record showed that the trust was benefitted by putting to bed trustee malfeasance allegations, such that the benefit did not only flow to the trustee.