P. ex rel. Harris & Becerra v. Shine, A148505

Background

Robert and Eva Lindskog created a revocable trust (1995 Trust). After Eva’s death, most of her share was to be held as the Livewire Lindskog Foundation; William Shine was successor trustee.
Following disputes over accountings and asset division, a 2008 settlement required Shine to form and fund the Foundation; Shine did not complete formation or properly fund/transfer assets and later appointed two friends as cotrustees.
The California Attorney General petitioned (2013) to remove the trustees, appoint a receiver, and surcharge for alleged mismanagement, self-dealing, inadequate records, improper loans, and false tax reporting. A temporary trustee (Bradlow) was appointed pending litigation and reported serious recordkeeping and management problems.
The former trustees (primarily Shine) sought payment from trust assets of past and future litigation expenses (pendente lite), relying on the Trust’s indemnity clauses and cases allowing trustee fees; the Attorney General opposed, arguing misconduct meant fees should not be advanced.
The probate court granted interim payment of Shine’s defense fees despite stating the Attorney General had a “strong case,” reasoning the trust indemnity and Kasperbauer supported advancement and citing inequity from disparate resources. The People appealed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether absence of reporter's transcript forfeits appeal	People need not provide transcript because written pleadings and court order suffice	Shine: lack of reporter's transcript should bar review and require affirmance	Court: no forfeiture; record adequate for review of legal issues presented
Whether probate court may award pendente lite (interim) fees from trust corpus when trustee is accused of malfeasance	AG: Probate Code and equity do not authorize advancing trust assets to defend alleged fiduciary breach; indemnity does not authorize pre‑determination payment	Shine: Trust indemnity + case law permit interim fees subject to repayment if not entitled to indemnity; inequity if forced to self‑fund against state resources	Court: Trial court may award interim fees in some circumstances but must apply a two‑step test (probability of ultimate entitlement to reimbursement + balance of harms including beneficiaries’ interests); reversed because trial court failed to weigh these factors
How to interpret the Trust’s express indemnity (limiting liability to willful misconduct/gross negligence) as to interim fees	AG: Indemnity should not be used to advance fees before liability determined, especially where misconduct alleged	Shine: Indemnity permits repayment‑subject advances; seeks interim funding with obligation to repay if not indemnified	Court: Indemnity expands potential entitlement but is silent on interim advancement; where instrument silent, court must assess likelihood of ultimate entitlement and balance harms before advancing funds
Standard and limits for awarding fees from trust where trustee benefits personally	AG: Trustee’s fees payable only when benefit to trust; fees denied if misconduct or personal motive	Shine: Defense benefits trust because resolves claims affecting trust administration	Court: Fees chargeable when litigation benefits trust (and when trustee prevails); interim fees rarely justified where misconduct alleged; court must evaluate benefit, trustee’s ability to repay, and risk to beneficiaries

Key Cases Cited

Kasperbauer v. Fairfield, 171 Cal.App.4th 229 (Cal. Ct. App.) (permits interim fees for trustees resisting accounting/surcharge subject to repayment)
Doolittle v. Exchange Bank, 241 Cal.App.4th 529 (Cal. Ct. App.) (trustee authorized to use trust funds to defend contest; court may enjoin use of funds preliminarily by weighing likelihood of success and relative harms)
Conservatorship of Lefkowitz, 50 Cal.App.4th 1310 (Cal. Ct. App.) (trustee not entitled to fees for resisting removal where acting from personal interest; sets objective‑reasonableness standard for indemnity when trustee loses)
Donahue v. Donahue, 182 Cal.App.4th 259 (Cal. Ct. App.) (former trustee’s ongoing fees payable subject to final approval where trustee prevailed on allegations; remand for reasonableness review)
Whittlesey v. Aiello, 104 Cal.App.4th 1221 (Cal. Ct. App.) (trial court’s allowance of litigation expenses rests in discretion)