CALIFORNIA TRUSTS AND ESTATES: PROBATE COURT MAY AWARD ATTORNEYS FEES TO A PARTY WHOSE EFFORTS HAVE RESULTED IN A SUBSTANTIAL BENEFIT TO THE TRUST BENEFICIARIES.
New Case: Smith v. Szeyller (January 16, 2019) The Court of Appeal affirmed. Under the substantial benefit doctrine, a trial court may award fees to be shared by others upon whom a benefit was conferred, when a litigant, proceeding in a representative capacity, obtains a decision that results in a substantial benefit to all beneficiaries. “Trust beneficiaries must generally pay their own attorney’s fees incurred challenging a trustee’s conduct, even if they succeed. (Leader v. Cords (2010) 182 Cal.App.4th 1588, 1595; Code Civ. Proc., § 1021.) But under the substantial benefit exception, the trial court may exercise its “equitable discretion . . . [to] determine whether the interests of justice require those who received a benefit to contribute to the legal expenses of thosewho secured the benefit.” (Pipefitters Local No. 636 Defined Benefit Plan v. Oakley, Inc., supra, 180 Cal.App.4th at p. 1547.) The doctrine is an “outgrowth” of the common fund doctrine. (Serrano v. Priest (1977) 20 Cal.3d 25, 38.) No published decision applies the substantial benefit doctrine in the probate context, “but it plainly would apply, for example, . . . to an action to remove a trustee who has breached the trust or to a petition to compel an accounting.” (Hartog & Kovar, Matthew Bender Practice Guide: Cal. Trust Litigation (2018) 15.32.)