Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of San Diego County Super. Ct. No. PN28574, Richard G. Cline, Judge.
BENKE, Acting P. J.
In this probate case the trial court properly granted the trustees' motion seeking a determination that their proposed motion to enforce the provisions of a no contest clause was itself not a contest within the meaning of the clause. Although the trustees' proposed motion would be made in their capacities as trustees, the proposed motion would subject them to a claim they contested the terms of the trust and thereby forfeited their rights as beneficiaries of the trust. Thus the trustees had the right to seek protection under the safe harbor provisions of Probate Code section 21320. Moreover, their attempt to enforce the no contest clause, although it would deprive one of the beneficiaries of the trust of any part of the trust, was not a contest of the provisions of the trust.
All further statutory references are to the Probate Code unless otherwise specified.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff and appellant Clarice Dolly Toler (Dolly) is one of three equal beneficiaries of a trust established by her deceased parents. Her brothers, defendants and respondents Lawrence R. Quigley (Lawrence) and Phillip G. Quigley (Phillip), are the other beneficiaries. Lawrence and Phillip are also the trustees of the trust.
The primary asset of the trust is the home the senior Quigleys occupied during their lives. Following the death of her father in 1999, Dolly shared the home with her mother until her mother died in 2005. The trust instrument gives the trustees absolute discretion with respect to the sale and distribution of trust assets and contains a no contest clause under which any beneficiary who challenges the validity of any provision of the trust forfeits his or her rights under the trust.
Dolly and her brothers disagreed with respect to disposition of the family home. Dolly wanted to purchase it from the trust and her brothers wanted to market the home and distribute the proceeds to the beneficiaries. Dolly brought three petitions under the safe-harbor provisions of section 21320 asking the court to determine that proposed litigation on her part would not be a contest under the terms of the trust. In her first two petitions, she sought permission to assert a creditor's claim against the trust for what she alleged were the pre-death debts of her parents. In the third petition, she sought permission to bring a partition petition which would have compelled the trustees to sell the home to her. The trial court denied all three petitions.
The trustees for their part brought an unlawful detainer action against Dolly. In responding to the unlawful detainer action, Dolly alleged that possession of the house should be determined by the probate court. However, among other matters, Dolly also asserted she was a one-third owner of the property, that the trustees acted out of spite in bringing the unlawful detainer action and they therefore violated their fiduciary duties to her. The trustees ultimately prevailed in the unlawful detainer action and a stipulated judgment in their favor was entered.
The trustees believe that in opposing their unlawful detainer action on the grounds that she had an ownership interest in the home and that they violated their fiduciary duty to her, Dolly violated the no contest provisions of the trust. In particular, they contend Dolly's defense in the unlawful detainer action challenged the discretion which the trust instrument gave them in disposing of trust property.
Following their success in the unlawful detainer action, the trustees filed their own petition under section 21320. The trustees sought a determination that a proposed petition to enforce the no contest clause based on Dolly's responses to their unlawful detainer action was not itself a contest of the provisions of the trust. Dolly opposed the motion on the grounds that section 21320 does not afford trustees the right to seek a determination that a proposed lawsuit will not violate the terms of a no contest clause. Shortly before the hearing on the trustees' motion was heard, the trustees amended the motion to assert they were bringing the motion as beneficiaries of the trust, rather than in their capacities as trustees.
The trial court granted the petition.
Dolly filed a timely notice of appeal.
DISCUSSION
I
Section 21320, subdivision (a), provides: "If an instrument containing a no contest clause is or has become irrevocable, a beneficiary may apply to the court for a determination of whether a particular motion, petition, or other act by the beneficiary, including, but not limited to, creditor claims under Part 4 (commencing with Section 9000) of Division 7, Part 8 (commencing with Section 19000) of Division 9, an action pursuant to Section 21305, and an action under Part 7 (commencing with Section 21700) of Division 11, would be a contest within the terms of the no contest clause."
Section 21320 was enacted in 1989 and codified much of the existing case law governing enforcement of no contest clauses. (Stats. 1989, ch. 544, § 19, p. 1825; repealed and reenacted by Stats. 1990, ch. 79, § 14, p. 463, operative July 1, 1991.) In proposing the codification, the Law Revision Commission commented in part: "A major concern with the application of existing California law is that a beneficiary cannot predict with any consistency when an activity will be held to fall within the proscription of a particular no contest clause. To increase predictability, the proposed law recognizes that a no contest clause is to be strictly construed in determining the donor's intent. This is consistent with the public policy to avoid a forfeiture absent the donor's clear intent. The law also makes clear that a request by a beneficiary for declaratory relief in the form of a petition for construction of the instrument to determine whether a particular activity would violate a no contest clause does not itself trigger operation of the [no contest] clause." (20 Cal. Law Rev. Com. Rep. (Jan. 1989) p. 12, fns. omitted; see also Genger v. Delsol (1997) 56 Cal.App.4th 1410, 1419.)
II
A moving party must give 15 days' notice of a hearing under Probate Code section 21320. (§§ 21322, 1220.) In her first argument on appeal, Dolly contends the amended motion was not properly noticed because the amended motion was not filed more than 15 days before the hearing. However, as the trustees note, Dolly appeared at the hearing on their motion and did not object to the lack of notice. Hence Dolly waived any claim the motion was not properly noticed. (See Carlton v. Quint (2000) 77 Cal.App.4th 690, 697.)
III
Next, Dolly contends that because the proposed petition to enforce the no contest clause would be made by her brothers in their capacities as trustees and not as beneficiaries, their proposed petition is not within the scope of section 21320. This contention has no merit. Under the terms of the no contest provision in the trust, any beneficiary who "directly or indirectly contests . . . the validity of any provisions of this instrument" (italics added) will forfeit his or her rights under the trust. Thus, although the proposed petition would be filed by the trustees, it could easily be argued that the petition was an indirect contest of the disposition provisions of the trust. Indeed, in Genger v. Delsol, supra, 56 Cal.App.4th at page 1424, the court held that a widow's action as a personal representative attacking a stock redemption agreement which was an integral part of her husband's estate plan would violate the no contest provisions of his will. "Were Sachiko [the widow] to prevail in her attack on the corporate stock redemption agreement so that the decedent's corporate stock were returned to the trust estate, the sole beneficiary of that effort would be Sachiko herself. Sachiko would receive that stock as the only person entitled to receive the residue of the trust assets. Thus, even were she to pursue the complaint on behalf of the estate, she would also be the beneficiary." (Ibid., fn. omitted.) Given the terms of the trust and the holding in Genger v. Delsol, Lawrence and Phillip have the right under the statute to a determination that their rights as beneficiaries will not be adversely impacted by the petition they intend to bring as trustees.
IV
Finally, Dolly contends the proposed petition seeking enforcement of the no contest clause would itself violate the no contest clause because it would result in a distribution of the trust which is inconsistent with her parent's intentions.
We reject this contention. The enforcement of any no contest clause radically alters the distribution otherwise provided for in a will or trust. If we were to accept Dolly's argument, we would effectively abrogate the enforcement of any no contest clause. We decline to do so. "No contest clauses are valid in California and are favored by the public policies of discouraging litigation and giving effect to the purposes expressed by the testator. [Citations.] . . . . [¶] [E]ven though a no contest clause is strictly construed to avoid forfeiture, it is the testator's intentions that control, and a court 'must not rewrite the [testator's] will in such a way as to immunize legal proceedings plainly intended to frustrate [the testator's] unequivocally expressed intent from the reach of the no contest clause.' [Citation.]" (Burch v. George (1994) 7 Cal.4th 246, 254-255.)
Order affirmed.
WE CONCUR: HUFFMAN, J., NARES, J.