By Roger J. Buffington, Esq.
In California trust litigation, unlike general civil litigation, by statute in almost all circumstances the claimant (“Petitioner”) is not entitled to a jury trial and instead the case is decided by the Probate Court and judge. The judge sits as finder of fact and law, makes the appropriate findings of fact by evaluating the evidence, applies the law, and issues a decision which becomes a judgement of the Court. This differs from civil litigation in which under most circumstances the parties are entitled to a jury if they so demand. In such cases it is the job of the jury to decide matters of fact, the judge instructs the jury as to the law, and the jury, not the judge, renders a verdict. In virtually all probate or trust litigation the trial and case are decided by a single judge. It is accordingly obvious that the judicial system imparts a great deal of power to the probate judge in a trust litigation case, or for that matter a will dispute.
And it does not end there. As discussed in several of our Blog articles the probate judge in a trust dispute has greater interlocutory (pretrial) powers than does a judge in an ordinary civil case (e.g. breach of contract, auto collision, general business litigation, etc.). A probate judge has extremely broad equitable powers to make both pretrial (interlocutory) orders, and to ultimately decide the case. The question becomes, what are the limits of those powers? This question in our opinion is one of the most misunderstood concepts in litigation involving California living trusts, and we will rather briefly discuss it here.
Once a party files a Petition i.e. trust litigation in the Probate Court, the Court acquires jurisdiction over the matter, and over the Trust. A probate trial court has inherent power “to decide all incidental issues necessary to carry out its express powers to supervise the administration of the trust.” [Dunlap v. Mayer (2021) 63 Cal. App. 5th 419, 424 (citing the California Supreme Court decision in Barefoot v. Jennings (2020) 8 Cal. 5th 822, 827–828)]. The Court of Appeal in Dunlap, supra explains the meaning of “incidental issues” and references such actions as suspending a trustee and appointing an interim trustee, or ordering an accounting, as examples of such incidental powers “…to supervise the administration of the trust” or protect the trust. [Dunlap, supra at 426; see also Probate Code Section 17206]. Put simply, during the litigation the Probate Court has broad equitable powers to ensure that the subject Trust is protected, that its beneficiaries are protected, and it can issue orders towards these ends in order to promote the efficient and lawful administration of the subject trust. [Dunlap, supra at 426]. It can similarly issue such orders after trial is complete, and this is common. These incidental powers are essentially granted to the Court to allow it to safeguard things until the matter reaches trial, or of course, settled out of Court. Even with settlement, not uncommonly it is appropriate for the parties to submit the settlement for approval by the Probate Court. This differs from most (not all) civil lawsuit settlements, which are usually not approved by a Court. (There are some exceptions to that.)
These broad equitable powers end where the statutory framework that the Legislature have established, begins. For example, in the context of awarding attorney’s fees after trial, it is well established that a trial court has no equitable powers beyond the established statutory framework for awarding fees contained in the Probate Code. This is limited. The Fifth District Court of Appeal makes this precise point in Bruno v. Hopkins, a case that also involved the boundaries of a trial court’s powers to assess attorney’s fees after trial. The Court of Appeal in Bruno, supra held that “[a]s a general rule probate proceedings are statutory in nature, such that the trial court ‘has no other powers than those given by statute and such incidental powers as pertain to it and enable the court to exercise the jurisdiction conferred upon it, and can only determine those questions or matter arising in the estate which it is authorized to do.’” [Bruno v. Hopkins, 79 Cal. App. 5th at 816-817 (internal cites omitted)]. In Bruno, supra the Court of Appeal held that “… the trial court’s equitable powers could not justify the attorney’s fees award…” because the trial court was constrained by the statutory framework governing an award of fees and costs. [Id. at 816]. Applying de novo review [Id. at 818] the Court of Appeal stated that “…we agree that the trial court here lacked authority under equity to impose attorney fees and costs…” [Id. (citing and following Pizarro v. Reynoso (2017) 10 Cal. App. 5th 172)]. Put simply, the Probate Court’s equitable powers end where a clearly defined statutory relief framework begin. Similarly, in Dunlap v. Meyer [(2021) 63 Cal. App. 5th 419] the trial court had dismissed a petition at a case management conference without advance notice that the conference could result in a dismissal. [Dunlap, 63 Cal. App. 5th at 423]. In doing so the trial court cited its powers under Probate Code Section 17206 and other provisions, invoking its equitable powers to decide incidental issues relating to the administration of trusts. [Id.]. The Court of Appeal reversed. It found that dismissing a case altogether was not the exercise of an “incidental power” which the trial court can exercise equitably. It held that while trial courts have broad powers to make orders incidental to trust administration, and to protect the trust, it must exercise its powers “… within the limitations of legal principles governing the subject of its action.” [Id. at 423]. In reversing, the Court of Appeal noted that dismissal of a petition “is not an incidental issue.” [Id. at 426]. The trial court was bound by the statutory framework set forth in the Probate Code and did not possess equitable powers beyond that. [Id. at 423].
Thus, while trial courts in trust litigation without doubt have broad equitable powers over “incidental matters” such as perhaps suspending a trustee, ordering an accounting, or even freezing assets during the pendency of a lawsuit, when they render their ultimate decisions about a case the Probate Court is bound by the statutory framework where such exists.
If you are involved in a Probate litigation matter or believe that you need to bring such a claim, Buffington Law Firm’s trust litigation attorneys invite you to call us for a free legal consultation. All consultations are with an experienced trust litigation attorney and are confidential and protected by the Attorney-Client Privilege. And there is never any obligation.