Trusts and Estates

Powell v. Tagami

Cite as D072566
Filed August 6, 2018 (Published August 15, 2018), Fourth District, Div. One

By Matthew R. Owens
Withers Bergman LLP

After a family dispute over a former trustee’s management of trust assets, the grantors removed the former trustee and appointed Claudia, a private professional fiduciary, as successor trustee. Claudia filed and obtained court approval of her first two trust accountings without objection. In 2016, after the second grantor died, Charles, one of the trust beneficiaries, demanded the third trust accounting as well as all supporting documents, including bank statements, attorney billing statements, and engagement letters. Claudia petitioned the probate court for approval of the third accounting, and Charles objected on several grounds. He asserted Claudia had failed to submit a fee declaration required by local rule, that the fees were unreasonable, and that she had committed misconduct both before and after the time period covered by the third accounting. The probate court approved the trustee’s accounting, found that Charles’s objections were made without reasonable cause and in bad faith warranting an award of attorney’s fees under Probate Code section 17211(a), and, in a separate order, fixed the amount of fees recoverable from Charles’s share of the trust or personally if his share was insufficient. Charles appealed both orders.

The appellate court affirmed both orders. The local rule Charles invoked for the proposition a fee declaration was required did not apply because fee approval was not specifically requested in the third accounting. Even if the local rule applied, to the extent it required more content than the Probate Code, it could be viewed as optional. The statutes governing court accountings mandate a financial statement with a statutorily-required summary and statutorily-required schedules, including a disbursements schedule. Claudia’s third accounting satisfied those statutory requirements, and, in any event, her attorney submitted a fee declaration to support the fees. The probate court correctly found that all fees reflected in the third accounting were reasonable, and that due to Charles’s bad faith objections Claudia was entitled to recover from him the attorney’s fees she incurred in defense of those objections, including the fees of her individual attorney.

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