Trusts and Estates

Bruno v. Hopkins

Cite as H044960

Filed June 13, 2022, Sixth District

By Michelle Barnett Batista
Aaron, Riechert, Carpol & Riffle, APC

Headnote:  Trustee Removal – Bad Faith – Attorneys’ Fees and Costs  

Summary: A beneficiary who petitions to remove a trustee in bad faith may be liable for attorneys’ fees and costs in excess of their beneficial interest in the trust.

Mildred and James created a trust and named their children as remainder beneficiaries.  Their two eldest daughters, Lynne and Gail, were to receive $200,000 from the revocable survivor’s trust and the residue was to be divided equally between their youngest two daughters.  James died in 2006.  In 2015, after receiving a notice by trustee and copy of the trust, Lynne filed a petition to remove Mildred as trustee and to declare the trust instrument a forgery.  Following a 13-day court trial on the bifurcated forgery claim, the court determined that the trust instrument was not a forgery.  The trial court granted Mildred’s motion for attorneys’ fees and ordered Lynne to pay over $829,000 in attorneys’ fees and $96,000 in costs on the ground that there was no merit to the position Lynne pursued at trial and that Lynne acted without basis in filing any of her claims.  Lynne appealed.

The appellate court affirmed.  The probate court has statutory authority to impose personal liability against a beneficiary that exceeds their share of the trust estate under Probate Code section 15642, subdivision (d).  The legislative history of Section 15642 demonstrates that the addition of subdivision (d) was specifically designed to address the damage to trust estates resulting from bad faith claims.  The only limitation is that the attorneys’ fees be “reasonable.”  Further, the statute does not violate constitutional principles of due process as it provides notice that a person seeking to remove a trustee could be liable for “all or any part of the costs of the proceeding, including reasonable attorney’s fees.”  There was substantial evidence to support the trial court’s finding that Lynne filed the petition for removal of Mildred in bad faith and that Mildred’s removal as trustee would be contrary to James’s intent.

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