Opinion
A160725
06-29-2021
EUGENE HALEY, Plaintiff and Respondent, v. ANTON D. KONATICH et al., Defendants and Appellants.
NOT TO BE PUBLISHED
Marin County Super. Ct. No. CIV1703653
STEWART, J.
This is an appeal from an order awarding attorney fees in a trust dispute between three siblings who are the beneficiaries of their late mother's trust. One of the brothers, Anton Konatich, also is trustee. After the sister died, her husband Eugene Haley, acting as executor of her estate, brought this suit against the two brothers and a related LLC entity the brothers controlled, seeking to recover his late wife's share of the distributable trust estate. He prevailed against one of the brothers on a claim under Probate Code section 850, and then recovered attorney fees pursuant to Civil Code section 1717 under a no-contest clause of the trust.
That statute permits the assertion of various claims, including when “the trustee is in possession of, or holds title to, real or personal property, and the property, or some interest, is claimed to belong to another.” (Prob. Code, § 850, subd. (a)(3)(A).)
The attorney fees were assessed against Konatich both individually and in his capacity as trustee, and against the related LLC entity. They now appeal, arguing Haley is not entitled to recover attorney fees under the trust's no-contest clause.
We agree, and we reverse.
BACKGROUND
A. The Underlying Dispute
We take the facts principally from the trial court's amended statement of decision, including verbatim where indicated by quotation marks.
“Prior to her death, Anna Konatich executed and established the Anna M. Konatich Revocable Trust (‘the Trust'). Since Anna's death, her son Anton Konatich (‘Anton' or ‘Trustee') has acted as sole Trustee of the Trust. The Trust's principal beneficiaries are Anton, his brother John Konatich, and his sister Katherine Haley, [n]ee Konatich. Each beneficiary is to receive an equal 1/3 share of the estate.” “The Trust estate consisted solely of a 25% interest in real property generally described as a primary residence, two secondary residences, and a restaurant named Tony's Seafood Restaurant located on the property. Katherine's brothers Anton and John owned the remaining 75% of the property in equal shares.” Thus, through her 1/3 interest in the trust, Katherine effectively held a 1/12th (8.33 %) interest in the property, and her brothers owned and held the rest.
The trust was executed in 2010, and Anna died on October 30, 2014. After Anna's death, the siblings (through counsel) attempted to negotiate a valuation and buy-out of Katherine's 1/12th interest but their negotiations did not come to fruition, and Katherine's counsel (on April 6, 2016) requested Anton to convey to her by deed her 1/12th interest as soon as possible.
At one point, Katherine offered a buy-out of her interest for $300,000.
Katherine died on August 14, 2016, after a long battle with cancer. Her surviving husband, Eugene Haley, is her executor.
Following Katherine's death, her brothers formed a new entity called Konatich Property LLC. Then, on February 28, 2017, the brothers executed a deed conveying to the LLC their own interests in the property (which by then were held in separate inter vivos trusts) and “the entirety of Anna's Trust, including Katherine's one-twelfth interest in the Property.” “On June 1, 2017, the LLC then leased the restaurant portion of the Property, Tony's Seafood, to Hog Island Oyster Company for twenty-five years.” Haley, Katherine's surviving husband, “was not advised regarding the formation of the LLC, the deeding of Katherine's interest to the LLC, or the lease with Hog Island Oyster Company. He only discovered these facts on June 1, 2017, when he read an article in the local newspaper.”
On October 4, 2017, Haley filed this action against (1) Anton, in several capacities (individually, as trustee of Anton's inter vivos trust, and also as trustee of Anna's trust), (2) John (individually and as trustee of John's inter vivos trust), (3) the LLC, and (4) Hog Island Oyster Company. He brought the action in his capacity as executor of Katherine's estate, “seeking distribution of Katherine's share of the Trust. He asserts that Anton, as Trustee, has betrayed Anna's intent to distribute Katherine's share outright and free of trust, and that Anton improperly conveyed the trust estate to an LLC, who then leased the trust property to Hog Island Oyster Company, further frustrating Anna's intent.”
Haley asserted eight causes of action: (1) for cancellation of the deed conveying the trust to the LLC; (2) cancellation of the lease between Hog Island Oyster Company and the LLC; (3) a claim under Probate Code section 850 for recovery of property belonging to Katherine's estate; (4) conspiracy among Anton and John to wrongfully deprive Katherine and her estate from receipt of property distributable to her or her estate from Anna's trust; (5) a claim under Probate Code section 859 to impose a statutory penalty of double the value of the property belonging to Katherine's estate, plus attorney fees, due to willful and bad faith taking, concealment or disposal of Katherine's distributable interest in the trust; (6) imposition of a constructive trust upon the proceeds from the Hog Island Oyster Company lease; (7) for an accounting of Anna's ownership interest in the Tony's Seafood Restaurant business; and (8) for declaratory relief, seeking a determination that Anna was a de facto partner in the restaurant business operated by the family, and as such held an interest in the assets sold to Hog Island Oyster Company as part of the lease transaction.
See footnote 1, ante, p. 1.
Haley's complaint sought “to recover assets which belong to the Katherine Haley estate which have been effectively taken from her estate by her two brothers.” It alleged that under article 3.04 of the trust, Katherine “was entitled to receive a conveyance ‘outright and free of trust' of a one-twelfth (1/12th) undivided interest in and to” the property, and that Anton failed and refused to convey her interest in the property to her during her lifetime. Instead, “[i]n violation of the express terms of the... trust, ” he executed a deed conveying her 1/12th interest to the Konatich Property LLC and then “[c]ompound[ed] violation of the express terms of the... trust” by entering into the long-term lease with Hog Island Oyster Company. It alleged that the combined effect of these and other actions deprived Katherine and her estate “from any effective ownership, operating control, interest or participation in management of the undivided one-twelfth (1/12th) interest in and to the... property to which Katherine Haley and her heirs are entitled under the mandatory distribution and conveyance instructions for the trust estate of the Anna M. Konatich Trust.”
The answer alleged that the terms of the trust “are best stated by all of the terms” and the document “speak[s] for [it]self.” It alleged that Katherine “prior to her death, personally and through her attorney, communicated her desire to have her brothers purchase from her the one-twelfth (1/12th) undivided interest” in the property based upon an appraised value, that she and her attorney had rejected an appraisal by a licensed appraiser and instead “attempted to demand that her brothers purchase her ‘interest' for an amount that exceeded the appraised value by more than two times.”
Thereafter, on April 9, 2018, Anton in his capacity as trustee of Anna's trust filed a petition for instructions. Like Haley's complaint, it “addresse[d] Katherine's share of the trust and [sought] an order allowing the Trustee to distribute an equal share to all beneficiaries.” Specifically, the petition alleged that Haley's “interpretation of the Trust is incorrect, ” in that the trust did not require the trustee to distribute to Katherine her 1/12th interest the property immediately following their mother's death or to distribute the trust assets in kind to her. Rather (citing various trust provisions, including articles 3.03, 4.02, and 4.03), the petition alleged the trustee had discretion to continue to hold and administer the estate for as long as the trustee deemed reasonably necessary, and to allocate the net trust estate into equal value shares rather than convey direct interests in the property to the beneficiaries. It alleged the brothers had obtained a $1.4 million appraisal of the property, and offered to buyout their sister's interest at 1/12th of its value ($116,666), but that she rejected that offer (as well as a second, more formal appraisal valuing the property at $1.175 million) and instead demanded $300,000 for a buyout of her share, which the brothers declined.
Upon agreement by the parties, the matters were consolidated and the case proceeded to a four-day bench trial.
Haley abandoned most of his claims, several before trial and others at the conclusion of trial. By the time the case was submitted for a decision three remained: the claim under Probate Code section 850 to recover property, the conspiracy claim and the claim under Probate Code section 859 for an award of a statutory penalty and statutory attorney fees (the third, fourth and fifth causes of action).
Haley prevailed only on the Probate Code section 850 claim. Addressing that claim, the probate court ruled in its statement of decision that “Plaintiff is entitled to judgment against Anton, individually and as Trustee of the Trust, on the Third Cause of Action.” It found that “This case presents a classic dichotomy between a Trustee's exercise of authority and the carrying out of a settlor's intent. The evidence established clearly that Anna's intent upon her death was for her daughter Katherine to receive a distribution of the value of one-third of her estate free of trust. Equally true is that the Trustee failed in his fiduciary duty to carry out Anna's intent. Indeed, the Trustee had authority to transfer Anna's ownership interest in the Property to the LLC and to then enter [into] a lease with Hog Island Oyster Company. However, the exercise of a Trustee's authority is subject to his fiduciary duty to honor the settlor's intent and administer the trust in the interest of all beneficiaries. Here, the Trustee's exercise of authority does not provide a defense to his actions because those actions failed his fiduciary duty to satisfy Anna's intent and were not in the interest of beneficiary Katherine.”
The trial court then engaged in an analysis of Anna's intent based on the plain language of the trust agreement and concluded that “the trust instrument itself clearly articulates Anna's intent to distribute one-third of her estate to Katherine upon her death....” The intention was to do so “outright and free of trust.” The court also found that, “From Anna's death until Katherine's death, Defendants asserted or acknowledged Katherine's entitlement to an outright conveyance of an undivided one-twelfth interest in the Property, and that it would be conveyed to her outright unless she was willing to allow her interest to be bought out by her brothers.” The court found that “Defendants breached their fiduciary duty by failing to carry out Anna's intent and by transferring Katherine's distribution to the LLC, ” and then leasing the restaurant portion of the busines to Hog Island Oyster Company for twenty-five years. “These actions clearly frustrated Anna's intent that Katherine receive one-third of her trust estate.”
As a remedy, the court found that Haley “is entitled to an outright conveyance of one-twelfth the value of the Property, ” but that “[s]uch conveyance is simply not feasible” because “the Property is entangled in an LLC and a portion of it in a twenty-five year lease, ” and “no party has asked, nor would the court make, orders to invalidate the LLC or the lease.” Instead, the court awarded Haley a judgment for the monetary value of Katherine's 1/12th interest in the property, in the amount of $154,167.
The court rejected Haley's conspiracy claim, because “John Konatich was too ill to testify at trial and was not deposed, ” “[s]cant evidence was presented at trial regarding John's involvement” and the evidence was “insufficient to establish that John and Anton engaged in a conspiracy or that John is liable in this case.” It also rejected Haley's claim for a penalty under Probate Code section 859, because “the court does not find that the evidence supports a finding of bad faith.”
The trial court concluded by ordering, “Judgment is for Plaintiff and against Defendant Anton Konatich, individually and as Trustee, and Konatich Property, LLC in the amount of $154,167.” For convenience, we will refer to the two respondents in this appeal, Konatich and the LLC, collectively as Konatich.
B. The Post-Judgment Motion for Attorney Fees
Haley then moved for an award of prevailing party attorney fees under Civil Code section 1717. He based the request on article 5.01 of the trust, its no-contest provision, which states: “5.01 No-Contest Clause. If any beneficiary, without probable cause, contests the validity of this Trust or any of its terms, that beneficiary's right to take any interest under this Trust is revoked and will pass as if that beneficiary and his or her issue had predeceased the Trustor. For purposes of this Article, a contest means a pleading that alleges the invalidity of this Trust or any of its terms on the grounds of (1) forgery, (2) lack of due execution, (3) lack of capacity, (4) menace, fraud, duress, or undue influence, (5) revocation pursuant to statute or this Trust, or (6) disqualification of a beneficiary under Probate Code §6112 or §21350. This no-contest clause applies to any assignee of a contesting beneficiary. The Trustee is hereby authorized to defend, at the expense of the Trust estate, any contest or other attack of any nature on this Trust or any of its provisions.” (Italics added.)
Citing an appellate decision that authorized an award of attorney fees in a trust contest between beneficiaries (Key v. Tyler (2019) 34 Cal.App.5th 505 (Key)), Haley contended that “[i]n effect, the Trustee committed an inverse attack on the Trust by failing to carry out the intent of the Settlor of the Trust, ” and therefore the expense of litigating that dispute “can be allocated to those of the beneficiaries responsible for creating the necessity of litigation.”
Konatich opposed the motion on many grounds, including that he never contested or attacked the trust and therefore the no-contest clause was inapplicable.
In his reply papers, Haley asserted that the lawsuit he filed “was not a contest of the Trust's terms” but “was instead an effort to enforce the Trust....” However, he contended that Anton and John had pursued a trust contest “by seeking to judicially validate disbursement of the trust's assets into an LLC which they controlled, and seeking to disinherit their sister.”
The trial court granted the attorney fee motion. It concluded that “despite arguments by the opposing parties that the no contest clause was not triggered by Plaintiff's allegations or that the defense of this lawsuit was not an attack on the trust, the court finds that the no contest clause was triggered when Plaintiff challenged the distribution of the trust estate and the intent of the settlor and defendants sought to deprive Plaintiff of the benefit of the interests intended by the settlor of the Anna M. Konatich Trust (Key, supra, 34 Cal.App.5th [at p.] 524.) Thus, the court finds that Plaintiff is entitled to attorney fees.” It awarded fees in the amount of $84,402, and this timely appeal followed.
DISCUSSION
I.
The Parties' Contentions
As noted, the probate court awarded legal fees to Haley under the concluding sentence of article 5.1 which states: “The Trustee is hereby authorized to defend, at the expense of the Trust estate, any contest or other attack of any nature on this Trust or any of its provisions.”
Preliminarily, we have significant doubt that the quoted language is a prevailing party attorney fee provision governed by Civil Code section 1717. In his opposition to the motion for fees in the probate court, Konatich argued that the trust language is not a prevailing party attorney fee provision governed by section 1717. However, he has not reprised that contention on appeal, and Haley argues the argument has been abandoned (though he also responds to it on the merits). The reply brief is silent on the point. But this issue is beside the point because, as we will discuss below, there is no basis for an award of attorney fees.
On appeal, Konatich argues the court erred in awarding attorney fees under this provision because there was no trust contest within the meaning of article 5.1 and therefore the attorney fee clause in that article did not apply and was unenforceable. (He also re-argues the merits of the probate court's decision at the underlying bench trial, but he did not timely appeal from that decision and we will not consider those arguments.)
For convenience, we will refer to appellants Anton Konatich and the LLC collectively as “Konatich.”
Haley contends this issue was not raised below. Having reviewed Konatich's opposition to the attorney fee motion and the reply brief, we believe his argument below was “sufficient to raise the issue for the... court's consideration, ” and in any event is reviewable by us for the first time on appeal because it presents solely a legal issue that does not depend on disputed facts. (Key, supra, 34 Cal.App.5th at p. 540.)
The only appeal before us is from the June 25, 2020 order allowing attorney fees. No appeal has been taken from the December 26, 2019 judgment. (See Cal. Rules of Court, rule 8.100(a)(1)&(2) [filing of notice of appeal required “[t]o appeal from a superior court judgment or an appealable order of a superior court” that “identifies the particular judgment or order being appealed”].)
Haley argues fees were properly awarded principally because there was a trust contest and that, even if there was not, there was an “attack” on the trust within the meaning of this provision, which is a point he concededly did not assert below but contends we may review as a pure issue of law. Haley also makes a number of subsidiary, alternative arguments that we will address below in context.
We conclude that Haley did not meet his burden to show that the clause applies to this dispute. This litigation was neither a “contest” nor an “attack” on the trust or any of its provisions.
II.
Analysis
We review the legal issue of Haley's entitlement to attorney fees de novo because the material facts are not in dispute. (See Mountain Air Enterprises, LLC v. Sundowner Towers, LLC (2017) 3 Cal.5th 744, 751.)
A. No-Contest Clauses Generally
The attorney fee provision appears at the conclusion of the trust's no-contest clause, and applies to “any contest or other attack of any nature on this Trust or any of its provisions.” Therefore, we start briefly with an overview of no-contest clauses.
A no-contest clause “ ‘essentially acts as a disinheritance device, i.e., if a beneficiary contests or seeks to impair or invalidate the trust instrument or its provisions, the beneficiary will be disinherited and thus may not take the gift or devise provided under the instrument.' [Citation.] No contest clauses, whether in wills or trusts, have long been held valid in California. [Citations.] Such clauses promote the public policies of honoring the intent of the donor and discouraging litigation by persons whose expectations are frustrated by the donative scheme of the instrument.” (Donkin v. Donkin (2013) 58 Cal.4th 412, 422 (Donkin).) Since 1989, however, the Legislature has increasingly limited the enforceability of no-contest clauses, in order to strike a balance between such interests, on the one hand, and the interests of avoiding forfeitures and promoting full access to the courts. (See id. at pp. 422-427; Prob. Code, § 21311.) Thus, even if a dispute falls within the scope of a trust's no-contest clause, the no-contest clause can be enforced only in those situations specified by statute.
Under current law, as pertinent here, a no-contest clause “shall only be enforced against... [a] direct contest that is brought without probable cause.” (Prob. Code, § 21311, subd (a)(1), italics added.) A “direct contest” is narrowly defined. (Id., § 21310, subd. (b).) It is “a contest that alleges the invalidity of a protected instrument or one or more of its terms, based on one or more of the following grounds”: (1) Forgery. (2) Lack of due execution. (3) Lack of capacity. (4) Menace, duress, fraud, or undue influence. (5) Revocation of a will pursuant to Section 6120, revocation of a trust pursuant to Section 15401, or revocation of an instrument other than a will or trust pursuant to the procedure for revocation that is provided by statute or by the instrument.” (Id., § 21310, subd. (b); see also id., subd. (a) [“ ‘Contest' means a pleading filed with the court by a beneficiary that would result in a penalty under a no contest clause, if the no contest clause is enforced”].) Moreover, no contest clauses must be “strictly construed.” (Id., § 21312.) This provision applies “notwithstanding a contrary provision in the instrument.” (Id., § 21314.)
A no-contest clause also is enforceable in two other contexts: in a challenge to the settlor's ownership of property at the time of transfer, and the filing of a creditor's claim. (Prob. Code, § 21311, subds. (a)(2)&(3).)
B. There Was No “Contest” or “Attack” Within the Meaning of Article 5.01.
Because the parties identify no relevant extrinsic evidence bearing on the meaning of article 5.01's concluding sentence, its interpretation presents a question of law we review independently. (Key, supra, 34 Cal.App.5th at p. 540.)
Again, that provision states: “The Trustee is hereby authorized to defend, at the expense of the Trust estate, any contest or other attack of any nature on this Trust or any of its provisions.” This standard language, recommended by a leading commentator on estate planning as an addition to a standard no contest clause, confers authority on the trustee to use trust assets to fund the defense of a trust contest-powers the trustee would otherwise lack because of its duty to deal impartially with beneficiaries. (Doolittle v. Exchange Bank (2015) 241 Cal.App.4th 529, 537-538 (Doolittle); accord, People ex rel. Harris v. Shine (2017) 16 Cal.App.5th 524, 535 [“A trustee's entitlement to use of trust assets to retain and compensate attorneys may be expanded by the terms of the trust instrument”]; see also Prob. Code, § 16003 [duty of impartiality]; 13 Witkin, Summary of Cal. Law (11th ed. 2021) Trusts, § 71].) “According to the Continuing Education of the Bar (CEB) book on drafting revocable trusts, ‘Drafters may want to authorize the trustee to defend a contest or an attack on the trust.... Without such a clause, the trustee might be hesitant to defend the trust because a court may rule that an attorney who represents the trustee in an unsuccessful defense of a trust contest is not entitled to have fees paid from the trust.' ” (Doolittle, at p. 538, quoting 2 Drafting Cal. Revocable Trusts (Cont.Ed.Bar 4th ed. 2014 No-Contest Clause and Miscellaneous Trust Provisions, § 19.4, p. 19-6.)
In Doolittle, our colleagues in Division Three held that such a provision, although included within the body of a no-contest provision, is not itself a no-contest clause (because it does not “penalize” a beneficiary for participating in litigation). (Doolittle, supra, 242 Cal.App.4th at pp. 539-544; Prob. Code, § 21310, subd. (c) [defining “no contest” clause].) Because such a provision does not come within the statutory definition of a no-contest clause, it is enforceable without regard to statutory limitations on the enforcement of no-contest clauses (such as the requirement a contest be brought without probable cause). (See Doolittle, at pp. 539-544.) Therefore, the only pertinent question here is whether the litigation below involved a “contest” or an “attack” within the meaning of article 5.01's language.
The trust itself defines the term “contest.” Article 5.01, which largely tracks section 21310, subdivision (b), states that it means “a pleading that alleges the invalidity of this Trust or any of its terms on the grounds of (1) forgery, (2) lack of due execution, (3) lack of capacity, (4) menace, fraud, duress, or undue influence, (5) revocation pursuant to statute or this Trust, or (6) disqualification of a beneficiary under Probate Code §6112 or §21350.” (Italics added.) Here, however, neither party alleged the invalidity of the trust or of any term of the trust, much less did so on any of these grounds. (See Estate of Dayan (2016) 5 Cal.App.5th 29, 40-41 [no contest clause not triggered where defendant did not seek to invalidate will but only to determine his interest in property that sole beneficiary claimed belonged to the estate].) The basic issue was whether, under the terms of the trust, Anton was required to distribute his sister's share immediately upon their mother's death and by means of an in-kind distribution, or whether instead he had authority under the trust to transfer her share to the LLC and encumber it with the Hog Island Oyster Lease. As Haley acknowledges, the issue tried to the probate court was merely one of trust interpretation, involving determination of the settlor's intent to properly construe the trust's meaning.
Such disputes are not trust contests. According to the California Supreme Court, claims, however couched, that “at bottom seek an interpretation of [a trust] instrument, rather than to void any portion of it or to set aside its distributive plan... do not violate no contest clauses.” (Donkin, supra, 58 Cal.4th at pp. 433-434.) Even under the common law “disputes over the interpretation of instruments were not ordinarily seen as violating a no contest clause. ‘Rather than thwarting the testator's dispositive intent, the proceeding serves to ascertain and enforce that intent.' ” (Id. at p. 434.) Haley himself acknowledged below, in his reply papers in support of the fee motion, that the lawsuit he brought was “not a contest of the Trust's terms” but merely “an effort to enforce the Trust, by seeking trust asset distribution in accordance with the Settlor's intent.” (Italics added.)
We agree, and for the same reasons, the dispute also was not an “attack” on the Trust within the meaning of the sentence authorizing fees. Haley says we must construe this term more broadly than the term “contest” to mean “ ‘an offensive or antagonistic action.' ” But even if we do, disputes over the interpretation of a trust are not seen as “thwarting” the settlor's intent (Donkin, supra, 58 Cal.4th at p. 434), and thus no more constitute action that is “offensive or antagonistic” to the trust than they constitute an actual contest. (See also Key, supra, 34 Cal.App.5th at p. 541 [using the terms “attack” and “contest” interchangeably].) Moreover, as Konatich points out, the probate court found that the trustee's actions were authorized by the trust (they just breached the trustee's fiduciary duty to one of the beneficiaries). So it is hard to see how defending those actions in court could constitute an “attack” on the trust as opposed to a dispute over the interpretation of the document as a whole. In short, because the dispute was neither a “contest” nor an “attack” on the trust within the meaning of article 5.01, there was no legal basis to award legal fees to Haley under the language of article 5.01.
C. Respondent's Contrary Arguments
Despite the foregoing, Haley advances several reasons he nonetheless is entitled to recover his fees, none persuasive.
Principally, Haley contends that the fee award is proper under Key, the authority he invoked below which the probate court also cited in its ruling. In Key, the trustee (Tyler), who, along with her sisters was a beneficiary, had induced her mother to amend their parent's trust to increase her own share and decrease the share of one of her sisters (Key). (See Key, supra, 34 Cal.App.5th at pp. 511-512.) When Key challenged the amendment alleging undue influence, Tyler opposed the petition. The probate court found there had been undue influence and ruled in favor of Key, and in a prior appeal that decision was affirmed. (Id. at p. 509.) Key then invoked the trust's no contest clause, arguing Tyler's judicial defense of the amendment was a contest to the validity of provisions of the underlying trust. (Id. at p. 517.) In the context of ruling in an appeal from an anti-SLAPP ruling, the appellate court agreed with Key, reasoning that “Tyler's defense of the 2007 Amendment, had it been successful, would have had the effect of revoking paragraph C of article four of the Trust, which the 2007 Amendment purported to replace.” (Id. at p. 524.) This fell within the definition of a direct contest under Probate Code section 21310 as “a contest that alleges the invalidity of a protected instrument or one or more of its terms” based upon the “revocation of a trust pursuant to Section 15401.” (Key, at p. 524.)
That case bears no resemblance to this one. Here, there was no amendment to the trust or claim by Konatich that the trust or any of its terms had been revoked or was invalid. Nowhere in Haley's brief does he even identify any provision of the trust that Konatich supposedly contested or attacked, and when asked to do so at oral argument, counsel's response was that Konatich attacked the trustor's intent, not that he sought to invalidate any provision of the trust. This is paradigmatic of a dispute over interpretation of a trust. Key provides no support for the proposition that such a dispute constitutes a contest or an attack on the trust.
Haley also contends Konatich is estopped from asserting the no- contest clause was not triggered, because they asserted below that it had been triggered (by Haley's actions), and they even asked for an award of prevailing party attorney fees themselves under Key before the probate court ruled against them on the merits. But, as far we can tell, Haley made no estoppel argument below in connection with the attorney fee motion, and on appeal he cites no legal authority in support of his new estoppel argument. It also is not the law. Although estoppel theories of fee recovery at one time held some sway, they no longer do. (See Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 897-899.) “A party claiming fees under [Civil Code] section 1717 must ‘establish that the opposing party actually would have been entitled to receive them if he or she had been the prevailing party.' ” (Id. at p. 898.) “[A] party's mere assertion of the right to recover fees does not estop it from challenging a fee award or vest the other party with the right to recoup attorney fees if it prevails.” (R.W.L. Enterprises v. Oldcastle, Inc. (2017) 17 Cal.App.5th 1019, 1035-1036.) We also cannot help noting that there is side-switching enough to go around. Haley argued below (in a closing trial brief) “there is no contest of the trust involved.” In short, we will resolve the attorney fee issue on its merits.
Haley also argues that Konatich's invocation of the no-contest clause against him below (obviously, without success) was itself a “contest” of the trust within the meaning of article 5.01. It wasn't. At most, Konatich asked the probate court to apply a provision of the trust (i.e., article 5.01) to disinherit Haley and to award Konatich his attorney fees under that provision. Haley has pointed to no pleading, filing or even argument by Konatich asking the probate court to disinherit Haley on any of the six grounds enumerated in article 5.01 and in Probate Code section 21310 (forgery; lack of due execution; lack of capacity; menace, fraud, duress, or undue influence; revocation; or disqualification of a beneficiary).
Finally, Haley argues he was entitled to recover his attorney fees under Probate Code section 17211, subdivision (b), a statute he did not invoke below as the basis for his attorney fee claim. That section states: “If a beneficiary contests the trustee's account and the court determines that the trustee's opposition to the contest was without reasonable cause and in bad faith, the court may award the contestant the costs of the contestant and other expenses and costs of litigation, including attorney's fees, incurred to contest the account. The amount awarded shall be a charge against the compensation or other interest of the trustee in the trust. The trustee shall be personally liable and on the bond, if any, for any amount that remains unsatisfied.” (Italics added.)
We decline to consider this untimely argument, because it was not raised below and thus has been forfeited. (See, e.g., Araiza v. Younkin (2010) 188 Cal.App.4th 1120, 1126-1127.) Moreover, it does not present a pure question of law. As held by the very authority Haley cites, the question whether a trustee acts in bad faith “is a factual question for the probate court's determination.” (Leader v. Cords (2010) 182 Cal.App.4th 1588, 1600, italics added). Accordingly, “[t]o the extent we have discretion to review the issue, we decline to do so.” (Araiza, at p. 1127.) Finally, even if we were to consider this new argument, we would reject it. As Konatich notes, the probate court rejected Haley's contention Konatich acted in bad faith.
DISPOSITION
The order awarding attorney fees is reversed. Appellants shall recover their costs.
We concur. KLINE, P.J., MILLER, J.