Opinion
NOT TO BE PUBLISHED
Super. Ct. No. 24971
HULL, J.Plaintiffs and appellants Marlene Lynch and Larry Brown (collectively, plaintiffs) appeal an order denying their petition to declare that an action they propose to bring to remove defendant Greta Box as trustee of the Al Grotzman Revocable Trust would not amount to a “contest” within the meaning of the trust’s no contest clause.
In light of Probate Code section 21305, subdivision (b)(7), which expressly provides that a petition “regarding . . . the removal of a fiduciary” does not violate a no contest clause as a matter of public policy, the trial court erred in ruling that the proposed petition to remove the surviving wife of a trust settlor as successor trustee would violate the no contest clause of the trust. (Unspecified section references that follow are to the Probate Code.) We reverse the judgment (order).
FACTS AND PROCEEDINGS
A. The Trust
Before he died, Al Grotzman created the Al Grotzman Revocable Trust. He appointed himself as initial trustee and nominated his wife, Greta Box, to act as first successor trustee following his incapacity or death. Grotzman nominated his stepson, Larry T. Brown, to act as second successor trustee. Grotzman had no children.
The trust provided that following Grotzman’s death and the payment of his debts, expenses, probate costs and fees, and taxes, his tangible property should go to Box. It then provided for the disposition of trust estate assets as follows:
“[4.01(b)](2) Surviving Spouse’s Trust of Residue. The Trustee shall hold and administer the balance of the trust estate for the benefit of the Settlor’s wife (Surviving Spouse). The Trustee shall pay to or apply for the benefit of the Surviving Spouse from the net income of the Trust Estate all sums that may be necessary, in the Trustee’s discretion, for her respective health, education, support, maintenance and comfort in quarter-annual or more frequent installments. Any income not distributed shall be added to principal.
“If the Trustee considers the income insufficient, the Trustee shall also pay to or apply for the benefit of the Surviving Spouse all sums from principal as the Trustee, in the Trustee’s discretion, considers necessary from the Surviving Spouse’s proper health, education, support, maintenance and comfort.
“The Trustee shall maintain any residence being used by [Grotzman] and the Surviving Spouse at the time of [his] death for the benefit of the Surviving Spouse. The Surviving Spouse shall be responsible for the payment of utilities and general maintenance with the Trustee being responsible for all other expenses to maintain the residence. If the Surviving Spouse determines not to reside in the residence, she may direct the Trustee to sell the residence and provide her with a replacement residence.
“(3) Distribution after death of Surviving Spouse: After the Surviving Spouse’s death, the Trustee shall divide and distribute the balance of the Trust estate assets as follows:
“(i) The Trustee shall distribute one-third (1/3) of the Trust Estate to MARLENE H. LYNCH provided she survives the Surviving Spouse . . . .
“(ii) The Trustee shall distribute two-thirds (2/3) of the Trust Estate to LARRY T. BROWN provided he survives the Surviving Spouse . . . .”
The trust granted to the trustee broad powers to manage trust property, including the power to sell it.
Finally, as relevant to this appeal, the trust contains the following no contest clause: “If any beneficiary under this trust, singly or in conjunction with any other person or persons, contests in any court the validity of this trust or of a deceased Settlor’s last will or seeks to obtain an adjudication in any proceeding in any court that this trust or any of its provisions or that such will or any of its provisions is void, or seeks otherwise to void, nullify, or set aside this trust or any of its provisions, then that person’s right to take any interest given to him or to her by this trust shall be determined as it would have been determined if the person had predeceased the execution of this [trust] . . . .”
B. The Petition for Declaratory Relief
Grotzman died on November 6, 2005. Upon his death, Box became the sole trustee of the trust. The trust assets then consisted of Grotzman’s former residence in Redding, two rental properties, and a checking account.
On April 12, 2006, at the request of plaintiffs’ counsel, Box provided a written accounting of the trust assets and liabilities, income and disbursements. The accounting states that the appraised value of the Redding residence is $250,000; the two rental properties are valued at $350,000 and $320,000, respectively. It also states that rental income for the properties between October 2005 and March 2006 was $1,090.45.
Plaintiffs promptly applied under section 21320 for a judicial declaration that an accompanying proposed petition to remove Box as trustee would not violate the trust’s no contest clause, pursuant to section 21305, subdivision (b).
As relevant to these proceedings, section 21305, subdivision (b) provides: “(b) [N]otwithstanding anything to the contrary in any instrument, the following proceedings do not violate a no contest clause as a matter of public policy: [¶] . . . [¶]
“(6) A pleading challenging the exercise of a fiduciary power.
“(7) A pleading regarding the appointment of a fiduciary or the removal of a fiduciary.
“(8) A pleading regarding an accounting or report of a fiduciary. . . .
Section 21320 is described as a “safe harbor” through which a beneficiary can ask the trial court to determine whether a proposed petition, motion, or action constitutes a will contest. (Estate of Rossi (2006) 138 Cal.App.4th 1325, 1328, fn. 1.)
The proposed petition alleged that Box should be removed as trustee because she (1) “ha[d] renounced the trust to each of the residual beneficiaries, indicating she was going to spend the trust monies as she pleased and without regard to the terms of the trust”; (2) “has had financial difficulties, including tax liens by the IRS and the State of California against her, is 74 years old and has no experience with finances or real estate. The trust assets consist primarily of real estate holdings”; and that (3) plaintiffs “are informed and believe that Box may have misappropriated trust assets to pay off her personal living expenses[.]”
The proposed petition also objected to Box’s accounting, on the grounds “[r]ental income is missing from the trust accounting” without explanation, and certain of the disbursements identified “violate . . . the trust, in that they invade principal without justification, given the other income of the ‘Surviving Spouse.’ Additionally, other expenditures appear to be for general maintenance, or luxury expenditures by [Box], which are not properly charged to trust principal.”
Box opposed the application, arguing that the proposed petition to remove her as trustee constitutes a “contest” within the meaning of the “no contest clause” of the trust because it represents an attempt by mere remainder beneficiaries to thwart Grotzman’s intent that the trust be administered for Box’s benefit after his death. Moreover, the trust expressly allocates both trust income, and (at the trustee’s sole discretion) principal for her support, maintenance and comfort. Finally, Box argued that, as remainder (and thus, contingent) beneficiaries, plaintiffs are not entitled to an accounting.
In a declaration, Box denied she ever “renounced” the terms of the trust. Indeed, she explained, “within two days of my husband’s death, [Lynch] repeatedly attempted to pressure me to allow her and her purported ‘financial advisors’ located in Oklahoma City, Oklahoma, to take over administration of the AL GROTZMAN trust. [Lynch] has contacted my relatives indicating that she believes I am unstable and unfit and incapable of carrying out my husband’s wishes as expressed in the trust. In response to repeated harassment both the day before and the day after Al’s memorial service, I responded in words to the effect that I would conduct my duties as trustee in a reasonable manner, without the interference of anyone, especially [Lynch] and her husband. This was not a renunciation of the terms of the trust; this was my reaction to harassment at a most inappropriate time.”
The court agreed with Box that the petition to remove her as trustee would violate the no contest clause of the trust, in that “an attack on the trust and would entirely frustrate the decedent’s intentions,” citing G[e]nger v. Delsol (1997) 56 Cal.App.4th 1410. It found no credible evidence that Box had renounced the trust. Noting that “the accounting provision in the trust juxtaposed against the discretion of the trustee to invade the principal in her discretion for ‘proper health, education, support, maintenance and comfort’ makes any accounting exceptionally vulnerable to controversy. However, such an accounting would not violate the no contest clause of the trust nor Probate Code § 213056(b). The court will set the matter for hearing if counsel so desires.” The court’s reference to “§ 231056(b)” was obviously a typographical error.
DISCUSSION
An order granting or denying a request for declaratory relief under section 21320 is directly appealable. (§§ 1303, subd. (j), 1304, subd. (d); Estate of Hoffman (2002) 97 Cal.App.4th 1436, 1438, fn. 1.)
Plaintiffs argue that, as a matter of law, the trial court erred in ruling that their proposed petition to remove Box as trustee constitutes a violation of the trust’s “no contest” clause. We agree.
A “contest” is “any action identified in a ‘no contest clause’ as a violation of the clause.” (§ 21300, subd. (a).) A “no contest clause” is “a provision in an otherwise valid instrument that, if enforced, would penalize a beneficiary if the beneficiary files a contest with the court.” (§ 21300, subd. (d).) Such clauses are valid in California and are favored by the public policies of discouraging litigation and giving effect to the testator’s expressed purposes. (Burch v. George (1994) 7 Cal.4th 246, 254.) The law concerning no contest clauses is the same with respect to trusts as it is to wills. (Estate of Ferber (1998) 66 Cal.App.4th 244, 253, fn. 7; Scharlin v. Superior Court (1992) 9 Cal.App.4th 162, 169; see §§ 45, 21300 et seq.) Accordingly, references to testators and trustors may be used interchangeably.
Despite the validity of these provisions, the Legislature has limited the reach of no contest clauses in certain provisions of the Probate Code. (See § 21305; Tunstall v. Wells (2006) 144 Cal.App.4th 554, 560; Estate of Rossi, supra, 138 Cal.App.4th at pp. 1331-1332.) Effective January 1, 2001, section 21305, subdivision (b) declared specified challenges to testamentary instruments to be protected by public policy, so they will never constitute a contest. These include proceedings to modify or terminate a trust (§ 21305, subd. (b)(1)), proceedings to enforce, modify or revoke a power of attorney (§ 21305, subd. (b)(3)); and pleadings challenging the exercise of power by a fiduciary (§ 21305, subd. (b)(6)). (See Tunstall v. Wells, supra, 144 Cal.App.4th at p. 560; Hermanson v. Hermanson (2003) 108 Cal.App.4th 441, 444-445; Stats. 2000, ch. 17, §§ 5, 6, 7.)
As relevant here, section 21305, subdivision (b)(7) provides: “. . . notwithstanding anything to the contrary in any instrument, the following proceedings do not violate a no contest clause as a matter of public policy: [¶] . . . [¶] (7) A pleading regarding the appointment of a fiduciary or the removal of a fiduciary.” The Legislature enacted this subdivision because it “determined that in furtherance of the public policy of eliminating errant fiduciaries, a beneficiary who believes a fiduciary is engaged in misconduct should be able to bring the alleged misconduct to the court’s attention without fear of being disinherited.” (Estate of Hoffman, supra, 97 Cal.App.4th at p. 1444, superseded by statute on other grounds, as recognized in Hermanson v. Hermanson, supra, 108 Cal.App.4th at p. 445 and Zwirn v. Schweizer (2005) 134 Cal.App.4th 1153, 1156, fn. 5.)
Where, as here, a trial court rules on a section 21320 application without referring to extrinsic evidence, the appeal presents a question of law and requires us to independently construe the trust to determine whether the proposed petition violates the no contest clause. (Burch v. George, supra, 7 Cal.4th at p. 254.) Likewise, interpretation of section 21305 and its application to the proposed petition are questions we decide as a matter of law. (Estate of Rossi, supra, 138 Cal.App.4th at p. 1336; McKee v. Orange Unified School Dist. (2003) 110 Cal.App.4th 1310, 1316 [application of a statute to undisputed facts is subject to reviewing court’s independent determination].)
Section 21305, subdivision (b)(7), renders plaintiffs’ petition seeking Box’s removal as trustee exempt from the operation of the trust’s no contest clause as a matter of public policy. Subdivision (b)(7) plainly provides that a petition “regarding . . . the removal of a fiduciary” cannot--as a matter of public policy--violate a no contest clause.
In Box’s view, this case presents a case of first impression and a choice between two competing public policy objectives: section 21305’s legislative declaration versus the long-acknowledged public policy of preserving the testator’s intent and discouraging probation litigation by enforcement of no contest clauses. We disagree that any choice remains: as one commentator has noted, section 21305 is one means by which the Legislature has effectively “superseded” prior judicial authority to enforce a no contest clause in support of the public policy of discouraging probate litigation. (2 Ross, Cal. Practice Guide: Probate (The Rutter Group 2007) ¶¶ 15:86.1, 15:87.15, pp. 15-33, 15-36 to 15-37.)
Box also urges us to “examin[e] the substance and practical effect” of the proposed petition, which she characterizes as an effort by plaintiffs to “frustrate Al’s unequivocally expressed intent” that the trust “be administered by [Box], solely for her benefit for the rest of her life, without interference from them or anyone else, and without regard as to whether any Trust assets remain after [her] death to pass on to them.” Moreover, she contends, the proposed petition fails to plead any facts that would justify her removal as trustee.
We cannot at this juncture evaluate the merits of the proposed petition. “A ruling on whether the beneficiary’s proposed action would be a will contest may not involve a determination on the merits of the action itself.” (Estate of Ferber, supra, 66 Cal.App.4th at p. 251.) We do not here express any opinion concerning the trial court’s conclusion that plaintiffs’ petition is without merit. Rather, we hold only that the court cannot make that determination in this declaratory relief proceeding; it must determine whether Box may be removed as trustee in the context of a proceeding filed for that purpose.
Finally, Box also asks that we take judicial notice of the trial court’s ruling--made after the order from which Lynch and Brown appeal--that Lynch and Brown are not entitled to an accounting, in which the court suggests that, even if allegations Box used trust income and principal to pay for her “meals, wrinkle cream and massages[,]” she would not have violated the trust. We decline her invitation to take notice of this ruling. We also decline to take judicial notice of legislative materials concerning section 21305. (Evid. Code, §§ 450, 459; Kaufman & Broad Communities, Inc. v. Performance Plastering (2005) 133 Cal.App.4th 26, 29 [“resort to legislative history is appropriate only where statutory language is ambiguous”].)
DISPOSITION
The judgment (order) is reversed. The parties shall bear their own costs on appeal. (Cal. Rules of Court, rule 8.276(a)(4).)
We concur: SCOTLAND, P.J., CANTIL-SAKAUYE, J.