{"id":518,"date":"2020-07-04T00:04:00","date_gmt":"2020-07-04T00:04:00","guid":{"rendered":"https:\/\/abtl.org\/northerncalifornia\/?p=518"},"modified":"2020-07-11T00:07:47","modified_gmt":"2020-07-11T00:07:47","slug":"on-trusts-estate-litigation","status":"publish","type":"post","link":"https:\/\/abtl.org\/northerncalifornia\/abtlreport\/on-trusts-estate-litigation\/","title":{"rendered":"On Trusts & Estate Litigation"},"content":{"rendered":"\n

by Frank Cialone<\/h2>\n\n\n\n
\"Frank
Frank Cialone<\/figcaption><\/figure><\/div>\n\n\n\n

No-contest clauses and the anti-SLAPP law, again\u2026 A few\nyears ago, I wrote a column in this publication in which I discussed the\ntension between then-recent changes to the Probate Code governing the\napplication of no-contest clauses in testamentary instruments and the\nanti-SLAPP law. Since then, several cases have reached the Court of Appeal and\nconfirmed the need for the Legislature to resolve that tension. <\/p>\n\n\n\n

A no-contest clause provides, in essence, that a beneficiary\nof a will or trust instrument will be disinherited if he or she contests that\ninstrument. Such clauses have long been held valid in California. They promote\nthe policies of honoring donative intent and discouraging litigation. On the\nother hand, they limit access to the courts and create potential forfeitures,\ndeterring what might well be meritorious claims of undue influence or similar\nproblems in the procurement of testamentary instruments. In practice, moreover,\nthey often resulted in drawn-out \u201csafe harbor\u201d proceedings in which parties\nsought preliminary findings that would avoid a no-contest provision. <\/p>\n\n\n\n

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 \u201c[a] direct contest brought without probable cause\u201d (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.<\/em>, the contest), it can trigger a motion to strike, and a request for attorney\u2019s 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.<\/p>\n\n\n\n

Reported cases confirm that the anti-SLAPP statute applies\nto a petition to enforce a no-contest clause. See, e.g., Kay v. Tyler<\/em>,\n34 Cal. App. 4th 505, 510 (2019). In one case, the Court of Appeal stated that\n\u201cthe policies underlying the no contest provisions have been carefully balanced\nby the Legislature\u201d through its enactment of Probate Code section 21311, and\nthat \u201cthe anti-SLAPP procedures may impede some of those goals, including\nincreasing litigation costs and potential delay.\u201d Urick v. Urick<\/em>, 15 Cal.\nApp. 5th 1182, 1195 (2017). But the Urick <\/em>court also found that the\nanti-SLAPP statute\u2014which the Legislature expressly directed the courts to\nconstrue broadly\u2014applies by its terms to a petition to disinherit. (In both\ncases, the Court of Appeal reversed an order granting the anti-SLAPP motion,\nfinding that the petitioner had adequately demonstrated a likelihood of success\non the merits.)<\/p>\n\n\n\n

To put this in practical terms: The trustee of a trust (or\nthe named executor of a will, or a beneficiary of such instruments) that\ncontains a no-contest provision will likely want to invoke that provision in\nthe event of a contest. But a lawyer representing that person will have to\nadvise that doing so risks an anti-SLAPP motion and an award of fees to the\ncontestant\u2014and also risks months or years of delay, not only to the litigation\nbut to the overall administration and distribution of the trust or estate,\nwhile such a motion is litigated and appealed. In both Kay <\/em>and Urick<\/em>,\nthe Court of Appeal acknowledged that good reasons exist to limit the\napplication of the anti-SLAPP statute to actions to enforce no contest clauses.\nBut in both cases, the Court also acknowledged that those reasons are for the\nLegislature to consider.<\/p>\n\n\n\n

The purposes of the anti-SLAPP statute do not appear to\ninclude making it easier to bring a contest without probable cause, or imposing\nobstacles to enforcing no-contest clauses when against such a contest is\nbrought. In this context, moreover, even a successful anti-SLAPP motion will\nnot end the litigation: the parties will still litigate the merits of the\ncontest, even if the claim that it was brought without probable cause is\nstricken. It seems appropriate, then, to provide that a petition to enforce a\nno contest provision pursuant to Probate Code Section 21311 should not be\nsubject to the anti-SLAPP statute. In the meantime, practitioners in this area\nmust be mindful of the interplay between the two statutes. <\/p>\n\n\n\n

\n\n\n\n

Frank Cialone is a partner at Shartsis Friese LLP. He\nrepresents clients in trust and estate litigation, and in disputes regarding\nthe ownership and management of closely-held businesses.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

by Frank Cialone<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[8,9],"tags":[],"_links":{"self":[{"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/posts\/518"}],"collection":[{"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/comments?post=518"}],"version-history":[{"count":1,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/posts\/518\/revisions"}],"predecessor-version":[{"id":520,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/posts\/518\/revisions\/520"}],"wp:attachment":[{"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/media?parent=518"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/categories?post=518"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/tags?post=518"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}