Barefoot v. Jennings ( 2020 )

IN THE SUPREME COURT OF
CALIFORNIA
JOAN MAURI BAREFOOT,
Plaintiff and Appellant,
v.
JANA SUSAN JENNINGS et al.,
Defendants and Respondents.
S251574
Fifth Appellate District
F076395
Tuolumne County Superior Court
PR11414
January 23, 2020
Justice Chin authored the opinion of the Court, in which Chief
Justice Cantil-Sakauye and Justices Corrigan, Liu, Cuéllar,
Kruger, and Groban concurred.
BAREFOOT v. JENNINGS
S251574
Opinion of the Court by Chin, J.
If amendments to a revocable trust made shortly before
the settlor dies disinherit a beneficiary, does that individual, as
one who is not named in the trust’s final iteration, have standing
to challenge the validity of the disinheriting amendments in
probate court on grounds such as incompetence, undue
influence, or fraud?
The Court of Appeal interpreted Probate Code section
17200, subdivision (a),1 which provides that “a trustee or
beneficiary of a trust may petition the court under this chapter
concerning the internal affairs of the trust or to determine the
existence of the trust,” as permitting only a currently named
beneficiary to make such a petition. It further concluded that
because the plaintiff was no longer a named beneficiary, she
lacked standing to challenge the validity of the amendment that
eliminated her interest under section 17200.
We disagree with the Court of Appeal, and hold today that
the Probate Code grants standing in probate court to individuals
who claim that trust amendments eliminating their beneficiary
status arose from incompetence, undue influence, or fraud.2
1
All further statutory references are to the Probate Code
unless otherwise indicated.
2
We do not decide here whether an heir who was never a
trust beneficiary has standing under the Probate Code to
challenge that trust.
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BAREFOOT v. JENNINGS
Opinion of the Court by Chin, J.
I. FACTUAL AND PROCEDURAL HISTORY
Because no party petitioned the Court of Appeal for a
rehearing, we take this factual and procedural discussion
largely from that court’s opinion. (Barefoot v. Jennings (2018)
27 Cal.App.5th 1, 3-4 (Barefoot); see Cal. Rules of Court, rule
8.500(c)(2).)
The underlying petition in probate court alleges the
following: Joan Lee Maynord and her now deceased husband
established the Maynord Family Trust (Trust) in 1986. After
her husband’s death in 1993, Maynord served as the sole
trustor. Plaintiff Joan Mauri Barefoot (plaintiff), one of
Maynord’s daughters, was a beneficiary and successor trustee
under the Trust. Two of Joan Lee Maynord’s other daughters,
Jana Susan Jennings and Shana Wren (collectively defendants),
were also beneficiaries. (Maynord’s three other children, one
deceased, are not involved in this litigation.)
“In or around August 2013 and continuing through 2016,
Maynord executed a series of eight amendments to and
restatements of the Trust, referred to as the 17th through the
24th amendments. The 24th amendment was the final
amendment prior to Maynord’s death. In these amendments
and restatements, [plaintiff’s] share of the Trust, as set out in
the 16th amendment, was eliminated and [plaintiff] was both
expressly disinherited and removed as a successor trustee. At
the same time Wren was provided with a large share of the
Trust and named successor trustee.” (Barefoot, supra, 27
Cal.App.5th at p. 4.)
After Maynord’s death on August 20, 2013, plaintiff filed
a petition in probate court alleging the amendments
disinheriting her were invalid on three grounds: (1) Maynord
was incompetent to make the amendments; (2) the amendments
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BAREFOOT v. JENNINGS
Opinion of the Court by Chin, J.
were the product of defendants’ undue influence; and (3) the
amendments were the product of defendants’ fraud. Regarding
standing, the petition alleged that plaintiff was “a person
interested in both the devolution of [Maynord’s] estate and the
proper administration of the Trust because [plaintiff] is
[Maynord’s] daughter and both the trustee and a beneficiary of
the Trust before the purported amendments. She will benefit by
a judicial determination that the purported amendments are
invalid, thereby causing the Trust property to be distributed
according to the terms of the Trust that existed before the
invalid purported amendments. Therefore, [plaintiff] has
standing to bring this petition.”
Defendants moved to dismiss the petition under sections
17200 and 17202 (authorizing dismissal of a petition if
reasonably necessary to protect the Trust), arguing that
plaintiff lacked standing because she was neither a beneficiary
nor a trustee under the Trust. Plaintiff responded that she had
standing because she was a beneficiary before the amendments
— which, she argued, were invalid — were executed. The trial
court ultimately agreed with defendants and dismissed the
petition. Plaintiff appealed.
The Court of Appeal affirmed judgment in defendant’s
favor. We granted plaintiff’s petition for review to resolve the
narrow standing question.
II. DISCUSSION
Underlying this action is the revocable trust that Maynord
and her deceased husband created in 1986. “A revocable trust
is a trust that the person who creates it, generally called the
settlor, can revoke during the person’s lifetime.” (Estate of
Giraldin (2012) 55 Cal.4th 1058, 1062, fn. omitted.) The
primary duty of a court in construing a trust is to give effect to
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BAREFOOT v. JENNINGS
Opinion of the Court by Chin, J.
the settlor’s intentions. (Brock v. Hall (1949) 33 Cal.2d 885(Brock).)
Our review concerns whether plaintiff has standing to
assert the invalidity of the Trust amendments that left her
without an interest in her mother’s trust estate. In concluding
that plaintiff does not have standing to challenge the
amendments to the Trust, the Court of Appeal suggested that
plaintiff relied exclusively on section 17200, subdivision (a),
which provides: “Except as provided in Section 15800, a trustee
or beneficiary of a trust may petition the court under this
chapter concerning the internal affairs of the trust or to
determine the existence of the trust.” Section 15800 generally
provides that so long as the trust remains revocable (that is, as
long as the settlor is alive) and the settlor is competent, the
settlor, “and not the beneficiary, has the rights afforded
beneficiaries under this division.” (Id., subd. (a); see Estate of
Giraldin, supra, 55 Cal.4th at p. 1066.) Here, the settlor
(Maynord) has died, so section 15800 is no longer relevant.
The Court of Appeal interpreted section 17200’s reference
to “a trustee or beneficiary” in subdivision (a) to mean that even
wrongly disinherited beneficiaries are prohibited from making
the petition. As we will explain, the Court of Appeal’s approach
runs counter to both the Probate Code and cases interpreting it.
Initially, we note that when a demurrer or pretrial motion
to dismiss challenges a complaint on standing grounds, the court
may not simply assume the allegations supporting standing lack
merit and dismiss the complaint. Instead, the court must first
determine standing by treating the properly pled allegations as
true. If, having taken the allegations as true, the court finds no
standing, it should sustain the demurrer or dismiss the petition.
If it finds standing by contrast, the court should allow the
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BAREFOOT v. JENNINGS
Opinion of the Court by Chin, J.
litigation to continue. (Warth v. Seldin (1975) 422 U.S. 490, 501
[standing in federal courts]; Estate of Plaut (1945) 27 Cal.2d 424,
426, 429-430 [will contest].)
The applicable Probate Code provisions support plaintiff’s
standing to challenge the merits of the Trust amendments on
the grounds of incompetence, undue influence, or fraud. Section
17200, subdivision (a), authorizes a beneficiary to petition the
court concerning the trust’s affairs “or to determine [its]
existence.” Section 17200, subdivision (b)(3) contemplates the
court’s determination of “the validity of a trust provision.”
Plainly, the term “trust provision” incorporates any
amendments to a trust. Section 24, subdivision (c) defines a
“beneficiary” for trust purposes, as “a person who has any
present or future interest, vested or contingent.” Assuming
plaintiff’s allegations are true, she has a present or future
interest, making her a beneficiary permitted to petition the
probate court under section 17200.
Years ago, this court observed that as a general matter,
the Probate Code “ ‘was intended to broaden the jurisdiction of
the probate court so as to give that court jurisdiction over
practically all controversies which might arise between the
trustees and those claiming to be beneficiaries under the trust.’ ”
(Estate of Bissinger (1964) 60 Cal.2d 756, 765 (Bissinger),
quoting Estate of Marre (1941) 18 Cal.2d 184, 187.) The wisdom
of those decisions has not lessened over time. More recently, the
Court of Appeal in Estate of Heggstad (1993) 16 Cal.App.4th 943explained that an expansive reading of the standing afforded to
trust challenges under section 17200 “not only makes sense as
a matter of judicial economy, but it also recognizes the probate
court’s inherent power to decide all incidental issues necessary
to carry out its express powers to supervise the administration
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BAREFOOT v. JENNINGS
Opinion of the Court by Chin, J.
of the trust.” (Estate of Heggstad, at p. 951.) Other Courts of
Appeal that have addressed the same question are in
agreement. (Drake v. Pinkham (2013) 217 Cal.App.4th 400, 407-
409 [individual petitioned under § 17200 claiming two
amendments to a trust that disinherited her were invalid on the
ground the settlor was incompetent]; Conservatorship of Irvine
(1995) 40 Cal.App.4th 1334, 1341 [“it is clear from viewing
section 17200 as a whole that a probate court has jurisdiction
over both inter vivos and testamentary trusts to entertain
petitions for instructions regarding the validity (and thus,
invalidity) of trust agreements or amendments”].)
Reading the Probate Code section consistent with the
statutory scheme as a whole, and examining the statutory
language to give it commonsense meaning, we conclude that
claims that trust provisions or amendments are the product of
incompetence, undue influence, or fraud, as is alleged here,
should be decided by the probate court, if the invalidity of those
provisions or amendments would render the challenger a
beneficiary of the trust. (See Coalition of Concerned
Communities, Inc. v. City of Los Angeles (2004) 34 Cal.4th 733,
737 [courts should not examine statutory language in
isolation].) So when a plaintiff claims to be a rightful beneficiary
of a trust if challenged amendments are deemed invalid, she has
standing to petition the probate court under section 17200.
Defendants argue that interpreting section 17200 to
permit purported beneficiaries to challenge a trust or its
amendments would “invite chaos” because it would permit
individuals with no present interest in the trust to “meddle”
with its administration. We think defendants overstate the
matter. Our holding does not allow individuals with no interest
in a trust to bring a claim against the trust. Instead, we permit
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BAREFOOT v. JENNINGS
Opinion of the Court by Chin, J.
those whose well-pleaded allegations show that they have an
interest in a trust — because the amendments purporting to
disinherit them are invalid — to petition the probate court.
Additionally, section 17206 provides the probate court
with wide latitude to “make any orders and take any other
action necessary or proper to dispose of the matters presented
by the petition.” This section supports a finding of standing
here. We have held that although the probate court has no
general equity jurisdiction, it does have the power to apply
equitable and legal principles in order to assist its function as a
probate court. (Bissinger, supra, 60 Cal.2d at pp. 764-765.)
Indeed, the probate court is given broad jurisdiction “ ‘over
practically all controversies that might arise between the
trustees and those claiming to be beneficiaries of the trust.’ ”
(Id. at p. 765, quoting Estate of Marre, supra, 18 Cal.2d at p.
187.) Using such discretion, the court can preserve trust assets
and the rights of all purported beneficiaries while it adjudicates
the standing issue. As one court explained, interpreting section
17200 as we do here “not only makes sense as a matter of judicial
economy, but it also recognizes the probate court’s inherent
power to decide all incidental issues necessary to carry out its
express powers to supervise the administration of the trust.”
(Estate of Heggstad, supra, 16 Cal.App.4th at p. 951.)3
3
We also note that defendants’ restrictive interpretation of
the Probate Code does not promote the public interest in
preventing the administration of trust property that is procured
through fraud or undue influence. This interest is expressed
most clearly in section 21380, which provides that certain
donative transfers (e.g., transfers to the drafter of the trust or to
the settlor’s caregiver) are presumptively the product of fraud or
undue influence. Courts have held that “no contest” provisions
7
BAREFOOT v. JENNINGS
Opinion of the Court by Chin, J.
Defendants also contend that section 850 allows “any
interested person” to file a petition to take certain actions
challenging title and property transfer issues, and provides the
exclusive means to challenge trust provisions. That section
concerns “the transfer of property of the trust.” (See § 17200.1.)
We need not examine in detail what section 850 does and does
not do because plaintiff is asserting her standing as a
beneficiary to challenge the validity of several amendments to
the Trust only, and not contesting any transfer or sale of
property into or out of the Trust. We therefore leave the
statute’s interpretation to a future case.
To hold other than we do today would be to insulate those
persons who improperly manipulate a trust settlor to benefit
themselves against a probate petition. Today’s narrow holding
in fact provides an orderly and expeditious mechanism for
limited challenges like plaintiff’s to be litigated early in the
probate process, in probate court, and to ensure that the settlor’s
intent is honored. (See Brock, supra, 33 Cal.2d a p. 885.)
in trusts cannot be used to avoid this section because that would
undermine the Legislature’s intent to deter persons from
procuring trust benefits through fraud or undue influence.
(Graham v. Lenzi (1995) 37 Cal.App.4th 248, 256.) Similarly,
where a person fraudulently induces a settlor to amend a trust
so that it transfers all of the settlor’s estate to that person and
disinherits all prior beneficiaries, it would undermine the public
interest if a court were to rule that those valid beneficiaries had
no standing to contest the fraudulently procured amendment.
8
BAREFOOT v. JENNINGS
Opinion of the Court by Chin, J.
III. CONCLUSION
We reverse the judgment of the Court of Appeal and
remand the matter to that court for further proceedings
consistent with this opinion.
CHIN, J.
We Concur:
CANTIL-SAKAUYE, C. J.
CORRIGAN, J.
LIU, J.
CUÉLLAR, J.
KRUGER, J.
GROBAN, J.
9
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion Barefoot v. Jennings
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 27 Cal.App.5th 1Rehearing Granted
________________________________________________________________________________
Opinion No. S251574
Date Filed: January 23, 2020
________________________________________________________________________________
Court: Superior
County: Tuolumne
Judge: Kate P. Segerstrom
________________________________________________________________________________
Counsel:
The Singhal Law Firm, Dinesh H. Singhal; Law Offices of Nathan D. Pastor and Nathan D. Pastor
for Plaintiff and Appellant.
Anglin Flewelling, Robert Collings Little; Haskett Law Firm and Amber C. Haskett for Bonnie Sterngold
as Amicus Curiae on behalf of Plaintiff and Appellant.
Artiano Shinoff, Howard A. Kipnis, Steven Barnes; Forethought Law, Bryan L. Phipps; The Law Office of
Ciarán O’Sullivan, Ciarán O’Sullivan; McCormick Barstow and Herbert A. Stroh for Executive Committee
of the Trusts and Estates Section of the California Lawyers Association as Amicus Curiae on behalf of
Plaintiff and Appellant.
Jones & Lester, Mark A. Lester and Theresa Loss for Ventura County Bar Association – Probate and Estate
Planning Section as Amicus Curiae on behalf of Plaintiff and Appellant.
Law Offices of Nancy Reinhardt and Nancy Reinhardt for San Fernando Valley Bar Association – Trusts
and Estates Section as Amicus Curiae on behalf of Plaintiff and Appellant.
Astor & Kingsland and Lya R. Kingsland for Orange County Bar Association – Trusts and Estates Section
as Amicus Curiae on behalf of Plaintiff and Appellant.
Arnold & Porter Kaye Scholer, Sean M. SeLegue; Gianelli & Associates, Gianelli | Nielsen, Eric T.
Nielsen, Michael L. Gianelli and Sarah J. Birmingham for Defendants and Respondents.
Counsel who argued in Supreme Court (not intended for publication with opinion):
Nathan D. Pastor
Law Offices of Nathan D. Pastor
2033 N. Main St., Ste. 750
Walnut Creek, CA 94596
(925) 322-1012
Herbert A. Stroh
McCormick Barstow, LLP
656 Santa Rosa Street, Suite 2A
San Luis Obispo, CA 93406
(805) 541-2800
Sean M. SeLegue
Arnold & Porter Kaye Scholer LLP
Three Embarcadero Center, 10th Floor
San Francisco, CA 94111-4024
(415) 471-3100