Fazzi v. Klein
119 Cal. Rptr. 3d 224
Cal. Ct. App.2010Background
- Norma Jean Klein appeals a trial court grant of safe harbor to her son Christopher Fazzi to file a petition challenging her as trustee of two trusts and a successor-trustee provision.
- The Klein Family Trust, created in 1987, funded three subtrusts (A, B, C) upon the death of Lloyd Klein; the survivor-trustees were to administer these, with B and C irrevocable for remainder beneficiaries including Christopher and siblings.
- The original trust contained a broad no-contest clause prohibiting challenges to any provisions of the instrument.
- After Lloyd’s 1996 death, Norma became sole trustee; in 2008 Christopher sought safe harbor under former Probate Code for a proposed petition seeking removal for cause of Norma, and to address Michael Fazzi as successor trustee and related power to appoint a professional fiduciary.
- The trial court found no no-contest clause applicable to Trusts B and C and that the petition did not constitute a contest; the court granted safe harbor accordingly, which this appeal challenges.
- Appellate disposition: the court reverses in part, holding the no-contest clause applies to subtrusts and that the petition to challenge the successor-trustee is a contest; removal for cause was not a contest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether no-contest clause applies to subtrusts B and C | Klein argues clause applies to all subtrusts via general provisions. | Fazzi contends clause does not extend to subtrusts absent explicit mention. | No-contest clause applies to subtrusts B and C. |
| Whether the proposed petition constitutes a contest under the no-contest clause | Klein contends petition does not contest validity of original trust. | Fazzi contends petition challenges successor-trustee and undermines trust provisions. | Petition constitutes a contest; it contravenes the clause. |
| Whether removal of Norma as trustee for cause violates the no-contest clause | Klein argues removal actions are barred by no-contest clause. | Fazzi argues removal for cause is a permissible fiduciary challenge not barred by the clause. | Removal for cause does not violate the no-contest clause; the action is permissible. |
| Whether safe harbor should be granted for the removal challenge while denying other relief | Klein seeks to bar only the contested remedies while preserving removal action. | Fazzi seeks broad safe harbor for the entire petition. | Safe harbor denied for the non-contest portions; allowed for removal-related relief. |
Key Cases Cited
- Johnson v. Greenelsh, 47 Cal.4th 598 (2009) (no contest clause interpreted against broad public policy)
- McIndoe v. Olivos, 132 Cal.App.4th 483 (2005) (no contest clause applies to subtrusts through general provisions)
- Scharlin v. Superior Court, 9 Cal.App.4th 162 (1992) (trust intent determined from the whole instrument)
- Perrin v. Lee, 164 Cal.App.4th 1239 (2008) (explicit mention required for amendments under no-contest clause (distinguishes case))
- Meyer v. Meyer, 162 Cal.App.4th 983 (2008) (will-based no-contest clause distinguished from trust context)
- Estate of Ferber, 66 Cal.App.4th 244 (1998) (no-contest clauses limiting fiduciary removal breach public policy)
- Estate of Bullock, 264 Cal.App.2d 197 (1968) (removal actions not necessarily violating no-contest clause)