Wulf v. Barrow
418 P.3d 906
| Ariz. Ct. App. | 2017Background
- Three family trusts contained in terrorem (no-contest) clauses; beneficiaries Debora Barrow and Kathi Wulf sued trustee Ron Wulf in Oct. 2013 seeking his removal and, later, added an Arizona Adult Protective Services Act (APSA) claim alleging financial exploitation.
- Beneficiaries pleaded seven factual allegations totaling over $370,000 in unexplained transfers/expenditures (withdrawals, sale proceeds, payments to Wulf’s business, solar panels purchase, law‑firm payment, and adding the vulnerable adult to an account).
- Wulf countersued to enforce the in terrorem clauses, arguing the beneficiaries’ challenge forfeited their trust interests unless each allegation/claim lacked probable cause under A.R.S. § 14‑2517.
- The superior court bifurcated the case and held a probable‑cause hearing; it ruled the beneficiaries needed probable cause only for the APSA claim as a whole (not for each underlying allegation) and found probable cause (by a thin margin).
- Wulf appealed, arguing that In re Shaheen Trust required probable cause for each factual allegation; the Court of Appeals reviewed de novo and affirmed, holding § 14‑2517 requires probable cause for the action/claim, not each allegation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether probable cause must exist for each factual allegation underlying a claim that triggers an in terrorem clause | Beneficiaries: only the APSA claim (the action) requires probable cause; underlying allegations are supporting facts | Wulf: each allegation supporting the APSA claim is a separate claim and thus each must be supported by probable cause under Shaheen | Court held probable cause must support the action/claim as a whole, not each factual allegation; affirmed superior court |
| Whether In re Shaheen Trust requires retroactive application to bar beneficiaries | Beneficiaries: Shaheen does not apply to require probable cause for each allegation; retroactivity not reached | Wulf: Shaheen requires stricter per‑allegation probable‑cause review and should apply | Court did not need to decide retroactivity because it interpreted Shaheen as not requiring per‑allegation probable cause |
Key Cases Cited
- In re Shaheen Trust, 236 Ariz. 498 (App. 2015) (held that probable cause must support each separate claim challenging a trust)
- Orca Commc’ns Unlimited, LLC v. Noder, 236 Ariz. 180 (2014) (statutory interpretation principle that legislature’s specific word choice controls)
- Semple v. Tri‑City Drywall, Inc., 172 Ariz. 608 (App. 1992) (definition of “action” as a court proceeding used in statutory interpretation)