CCP § 1026 Was The Governing Costs Allocation Statute Regarding SLAPP Fee Award.
Although this case is must reading for probate practitioners on the scope of actions for which “no contest” clauses encompass, Cadena v. Vose, Case No. F080428 (5th Dist. July 28, 2021) (unpublished) shows how fees awardable under the SLAPP statute can be allocated under the probate code statutory scheme.
In this case, two beneficiaries filed a petition challenging a settlor/prior trustee’s unilateral trust amendment after the death of his wife and filed a complementary civil court partition action, which triggered the current trustee (who was the prime beneficiary of asset distributions based on the unilateral trust amendments) and a joining beneficiary to strike back by filing a disinheritance petition based on a trust “no contest” clause. The lower court granted the two beneficiary’s SLAPP motion as to the disinheritance petition, finding that the beneficiary’s actions were protected activity and the disinheritance petition was not likely to be meritorious. The probate judge also assessed SLAPP fees against losing trustee/joining party, jointly and severally, in their individual capacities, to the tune of $13,889. The losing parties appealed.
The Fifth District affirmed. The main appellate argument was that the probate court should have allocated the fee award (which is a “costs”) under CCP § 1026, which requires bad faith before it can be allocated against a trustee. The reviewing panel disagreed, finding that Probate Code section 1002, a more liberal provision, controlled over section 1026. In turn, section 1026 gives the trial judge wide discretion to allocate costs as he or she deems appropriate. In this case, the record did bear out that trustee was acting to protect her personal interests as beneficiary, such that the costs allocation against her as an individual was justified. The appellate court also remanded because the winning parties were entitled to fees on appeal under the SLAPP statute.
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