On Trusts & Estate Litigation

by Frank Cialone

Frank Cialone
Frank Cialone

No-contest clauses and the anti-SLAPP law, again… A few years ago, I wrote a column in this publication in which I discussed the tension between then-recent changes to the Probate Code governing the application of no-contest clauses in testamentary instruments and the anti-SLAPP law. Since then, several cases have reached the Court of Appeal and confirmed the need for the Legislature to resolve that tension.

A no-contest clause provides, in essence, that a beneficiary of a will or trust instrument will be disinherited if he or she contests that instrument. Such clauses have long been held valid in California. They promote the policies of honoring donative intent and discouraging litigation. On the other hand, they limit access to the courts and create potential forfeitures, deterring what might well be meritorious claims of undue influence or similar problems in the procurement of testamentary instruments. In practice, moreover, they often resulted in drawn-out “safe harbor” proceedings in which parties sought preliminary findings that would avoid a no-contest provision.

The Legislature balanced these interests by enacting Probate Code Section 21311, in 2010. That statute provides that no-contest clauses will be enforced only against “[a] direct contest brought without probable cause” (and against certain other types of claims if the no-contest clause itself expressly so provides). To invoke a no-contest clause, a trustee, named executor, or other interested party will bring a petition to disinherit in order to obtain a court determination that Section 21311 applies. But, because the predicate for such a petition is the filing of litigation (i.e., the contest), it can trigger a motion to strike, and a request for attorney’s fees, under the anti-SLAPP statute, C.C.P. Section 425.16. To defeat such a motion, the petitioner must offer admissible evidence to show that the contestant lacked probable cause for his or her claim. An anti-SLAPP motion stays discovery, and an order granting or denying such a motion is subject to an immediate direct appeal.

Reported cases confirm that the anti-SLAPP statute applies to a petition to enforce a no-contest clause. See, e.g., Kay v. Tyler, 34 Cal. App. 4th 505, 510 (2019). In one case, the Court of Appeal stated that “the policies underlying the no contest provisions have been carefully balanced by the Legislature” through its enactment of Probate Code section 21311, and that “the anti-SLAPP procedures may impede some of those goals, including increasing litigation costs and potential delay.” Urick v. Urick, 15 Cal. App. 5th 1182, 1195 (2017). But the Urick court also found that the anti-SLAPP statute—which the Legislature expressly directed the courts to construe broadly—applies by its terms to a petition to disinherit. (In both cases, the Court of Appeal reversed an order granting the anti-SLAPP motion, finding that the petitioner had adequately demonstrated a likelihood of success on the merits.)

To put this in practical terms: The trustee of a trust (or the named executor of a will, or a beneficiary of such instruments) that contains a no-contest provision will likely want to invoke that provision in the event of a contest. But a lawyer representing that person will have to advise that doing so risks an anti-SLAPP motion and an award of fees to the contestant—and also risks months or years of delay, not only to the litigation but to the overall administration and distribution of the trust or estate, while such a motion is litigated and appealed. In both Kay and Urick, the Court of Appeal acknowledged that good reasons exist to limit the application of the anti-SLAPP statute to actions to enforce no contest clauses. But in both cases, the Court also acknowledged that those reasons are for the Legislature to consider.

The purposes of the anti-SLAPP statute do not appear to include making it easier to bring a contest without probable cause, or imposing obstacles to enforcing no-contest clauses when against such a contest is brought. In this context, moreover, even a successful anti-SLAPP motion will not end the litigation: the parties will still litigate the merits of the contest, even if the claim that it was brought without probable cause is stricken. It seems appropriate, then, to provide that a petition to enforce a no contest provision pursuant to Probate Code Section 21311 should not be subject to the anti-SLAPP statute. In the meantime, practitioners in this area must be mindful of the interplay between the two statutes.

Frank Cialone is a partner at Shartsis Friese LLP. He represents clients in trust and estate litigation, and in disputes regarding the ownership and management of closely-held businesses.