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Trusts and Estates

Key v. Tyler

Cite as B283979
Filed April 19, 2019, Second District, Division Two

By Matthew R. Owens
Withers Bergman LLP
www.withersworldwide.com

Headnote: Petition to Enforce No Contest Clause – Anti-SLAPP Motion 

Summary: No contest clauses are enforceable against both contestants and respondents in a trust contest, depending on the circumstances; the anti-SLAPP statute applies to no-contest-clause-enforcement petitions, but the litigation privilege may not be used to defeat them.

Sarah Key, Elizabeth Tyler, and Jennifer Potz were equal beneficiaries under their mother’s trust until the trust was amended in 2007 in Tyler’s favor.  Key contested the 2007 amendment on undue influence grounds and won, a ruling which was upheld on appeal.  Key then filed a petition to enforce the trust’s no contest clause against Tyler and for attorney’s fees based on a trust provision authorizing repayment from the trust for any expenses incurred to defend against a trust contest.  Tyler responded with an anti-SLAPP motion, contending the enforcement petition arose from protected litigation, and that Key could not show a probability of prevailing for various reasons, including that Tyler did not initiate the underlying trust contest.  The court granted the anti-SLAPP motion because Tyler’s defense of the underlying trust contest filed by Key was not a direct contest under the governing statute.  The court denied Key’s motion for attorney’s fees because she did not identify a contractual or equitable basis for recovery.  Key appealed.   

The appellate court reversed both orders and remanded.  The trial court correctly ruled that the anti-SLAPP statute applied to the enforcement petition because the defense of the underlying trust contest was protected litigation, and no statutory exception applied.  But even though Tyler satisfied the anti-SLAPP statute’s first prong, and shifted the burden to Key to show probability of prevailing on the merits under its second prong, Key met her burden because of the prior judgment invalidating the 2007 amendment based on Tyler’s undue influence.  The no-contest-clause-enforcement statute expressly applies to responses and objections, not just petitions that initiate the trust contest.  By defending against Key’s trust contest Tyler effectively sought to revoke the gifting provision contained in the prior version of the trust, and thus her actions constituted a direct contest under the no-contest-clause-enforcement statute, notwithstanding that she was the respondent.  The litigation privilege did not shield Tyler’s actions because enforcing it would render the no-contest-clause-enforcement statute inoperable in every case.  The Probate Code’s specific no-contest-clause-enforcement statute trumps the Civil Code’s more general litigation-privilege statute.  Key was also entitled to seek attorney’s fees under contractual and equitable theories. 

http://www.courts.ca.gov/opinions/documents/B283979.PDF

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