After the probate court resolved these disputes, the Gaynor beneficiaries filed a surcharge petition against the cotrustees, and later added James as a respondent based on his alleged de facto trustee status. The Gaynor beneficiaries alleged a single breach of fiduciary duty cause of action, claiming the cotrustees and James took numerous actions to benefit themselves at the expense of the other beneficiaries. One of those actions involved distributing Trust funds only to themselves and other senior beneficiaries. Another action involved a plan to modify the Trust terms to create new trustee succession rules ensuring the cotrustees' (and James's) continued control over the Trust distributions. The Gaynor beneficiaries alleged that in implementing this latter plan, James and the cotrustees wrongfully withdrew trust assets and then used these assets to file and defend probate petitions in attempting to persuade the probate court to adopt their plan. The Gaynor beneficiaries sought reimbursement of all funds improperly withdrawn from the Trust.
Focusing on the paragraphs of the surcharge petition related to the prior probate litigation, James moved to strike the
To trigger anti-SLAPP protection, the moving party has the initial burden to show the plaintiff alleges constitutionally-protected activity and the claim arises from this activity. ( Park v . Board of Trustees of California State University (2017)
FACTUAL AND PROCEDURAL SUMMARY
Background
Grandfather died in 1983, leaving three adult children: William, James Sr. (appellant's father), and Mary. Under the Trust provisions, the Trust was divided into three shares, one for each of his three children and that child's issue. The Trust's primary asset was the ownership of shopping center property that generated substantial income. Under the Trust terms, the Trust will remain in effect until a specified event, estimated to occur in about 2092.
The Trust named one of Grandfather's sons (William) as successor trustee, with Grandfather's accountant to succeed William, and then San Diego Trust and Savings Bank to succeed the accountant. The Trust provided that any other successor trustee "must be a corporation authorized under [federal or state laws] to administer trusts and have total capital, surplus and undivided profits of not less than $20 million." The Trust gave the trustee the authority to distribute net income among all of the beneficiaries.
In about 1990, after serving as a trustee for several years, William created a plan that deviated from the Trust's trustee-succession provisions (the 1990 plan). This plan proposed a committee of three trustees (one from each branch of the family) to serve as successor trustees of the Trust. One year later, the probate court appointed three trustees under this plan: (1) one of Mary's daughters; (2) one of James Sr.'s daughters (appellant James's sister); and (3) one of William's sons.
During the next 20 years, when one of these cotrustees resigned or died, the remaining trustees successfully filed unopposed petitions with the court to appoint a replacement trustee, maintaining representation from each branch of the family. With minor exceptions, the Trust income
Before 2006, the Trust's shopping center property was co-owned with various individual senior-generation family members. In about 2006, the trustees (with James's alleged advice and assistance) formed a limited liability company (the Shopping Center LLC) to hold title to the shopping center. This action allegedly caused the Trust to lose the " 'control premium' " value associated with management and control of the shopping center property, and allegedly benefited James and other senior beneficiaries to the detriment of other beneficiaries.
New Proposed Plan for Trustee Appointment and Succession
In 2011, the Trust's trustees were: (1) Edwin (James Sr.'s son and appellant James's brother); (2) Christopher (William's grandson); and (3) Mary (Grandfather's daughter) (collectively referred to as the Cotrustees). At about this time, the Cotrustees (allegedly with James's advice and assistance) "formulate[d] a self-serving and entirely new method for choosing and installing successor trustees." To implement this plan, the Cotrustees filed a probate petition (Petition to Modify), seeking approval to abandon the 1990 plan, and to instead modify the Trust provisions to: (1) eliminate the requirement that the successor trustee be a corporation; (2) specify that the current Cotrustees had the sole authority to nominate successor trustees without regard to family branch; and (3) allow only those beneficiaries then receiving income (the nine "senior generation" members out of the 46 beneficiaries) to vote for successor trustees.
The Gaynor beneficiaries opposed the Petition to Modify, and in July 2012, a trial was held on the petition. At the end of the trial, the probate court (Superior Court Judge Richard Cline) ruled in favor of the Gaynor beneficiaries, finding "the circumstances [were] not of a type contemplated by Probate Code section 15409, as grounds for modification of the [T]rust. ..."
At about the same time, the Gaynor beneficiaries petitioned to remove the Cotrustees and to appoint a successor corporate trustee under the Trust provisions (Petition to Appoint). The Gaynor beneficiaries proposed two financial institutions that had consented to serve. The Cotrustees (allegedly
After months of hearings and several rounds of briefing, the court issued an order finding it would appoint the successor trustee proposed by the Gaynor beneficiaries. Before the court appointed this corporate trustee, the Gaynor beneficiaries moved for attorney fees incurred in the probate litigation, arguing their efforts created a common fund or benefit for the other Trust beneficiaries by ending the " 'senior-generation-only' " distribution, making Trust funds available to junior generations, and installing a neutral and professional trustee to protect and preserve Trust assets. The Cotrustees opposed the motion. While the attorney fees motion was pending, the Cotrustees (allegedly with James's advice and assistance) spent Trust funds to engage in mediation on the motion, including to pay for many beneficiaries to travel to San Diego to attend the mediation.
After appointing the new corporate trustee, Judge Cline granted the Gaynor beneficiaries' attorney fees motion, awarding them $260,948.34, reflecting amounts incurred in bringing and/or defending the Petition to Modify, the Petition to Appoint, and the Petition to Construe. The court awarded the fees under equitable principles and on a common fund theory, concluding the Gaynor beneficiaries' efforts substantially benefited the younger generations. In its written order, the court stated:
"At all times, the individual [Cotrustees] engaged in a distribution practice that benefitted only the senior generation of trust beneficiaries. ... While the distribution provisions of the [T]rust may have some ambiguities, a clear reading of the [T]rust suggests that the distribution practice followed by the individual trustees for twenty years was contrary to the terms of the trust. The [Cotrustees] should not have excluded younger beneficiaries and beneficiaries having financial needs. ... [¶] ... Over the past twenty years there has been in excess of three million dollarsdistributed to the senior generation. None of the younger generations have been offered or have received anything. ... Although the court was not asked to rule on the extent to which the individual [Cotrustees] performed their duties, and it specifically declines to do so now, there is prima facie evidence that the [Cotrustees ] breached their duties in carrying out the senior-generation-only distribution policy ." (Italics added.)
The Cotrustees (Edwin and Christopher; Mary died in March 2013) appealed the order, and in November 2014, this court affirmed the order. ( Gaynor v . Bulen (Nov. 20, 2014, D064872),
In January 2015, the court-appointed successor trustee paid the Gaynor beneficiaries $260,948.34 plus interest of $40,958.16 for the ordered attorney fees. The trustee made this payment from the Trust assets.
In November 2012, the Gaynor beneficiaries filed the initial surcharge petition against the Cotrustees (Edwin, Christopher, and Mary) seeking an accounting and to surcharge these Cotrustees for breaches of fiduciary duty.
About 10 months after this court filed Gaynor I , the Gaynor beneficiaries filed an amended surcharge petition (Second Amended Petition), adding James as a party based on his alleged "de facto" trustee status in assisting and encouraging the Cotrustees in their prior alleged wrongful actions.
The legal basis for the Second Amended Petition was a single breach of fiduciary duty cause of action, in which the Gaynor beneficiaries identified
Regarding remedies, the Gaynor beneficiaries asked the court to require modification of the Shopping Center LLC agreement to ensure the junior beneficiaries' rights were protected, and to surcharge the Cotrustees and James by requiring
The Gaynor beneficiaries sought double damages under Probate Code section 859, which provides: "If a court finds that a person has in bad faith wrongfully taken, concealed, or disposed of property belonging to a ... trust ... the person shall be liable for twice the value of the property recovered by an action." They also sought punitive damages based on allegations the Cotrustees and James "acted with oppression, and malice, and despicable conduct," and requested their attorney fees in the current action.
Shortly after the Gaynor beneficiaries filed this Second Amended Petition, James filed an anti-SLAPP motion to strike the claims against him. He argued the "gravamen" of the petition arose from his alleged participation in the probate litigation, and these actions were in furtherance of his constitutional right to petition. James also argued the Gaynor beneficiaries could not meet their burden to show a probability of prevailing because the claims against him are barred by the applicable statute of limitations and the litigation privilege. On the statute of limitations defense, James presented evidence showing the Gaynor beneficiaries knew of his alleged role as advisor to the Cotrustees since 2005, and at the very latest in July 2012, more than three years before the Second Amended Petition was filed.
The Gaynor beneficiaries countered that the anti-SLAPP statute did not apply because their claims arose from James's breach of the "duty of loyalty that occurred long before the [Cotrustees] stepped into the courtroom," and that the " 'principal thrust' of the Petition is aimed at ... breaches of [James's] duties of loyalty that occurred independently of any litigation that was filed." The Gaynor beneficiaries additionally maintained they could meet their burden to show a probability of prevailing on their claims. They argued and presented evidence showing the Cotrustees violated their fiduciary duties in numerous ways, and that "discovery recently obtained ... reveals that [James] routinely assumed the role of lead advisor and decision maker to the other" Cotrustees during "a period of at least 10 years." They also argued the limitations defense was inapplicable because the Cotrustees and James had withheld numerous relevant emails of which the Gaynor beneficiaries were unaware until March 2015.
After a hearing, the court (Superior Court Judge Julia Kelety) denied the anti-SLAPP motion, finding the statute did not apply to the claims against James, and thus the court did not reach the second step of the anti-SLAPP analysis. The court discussed the "primary right" theory,
DISCUSSION
I. Anti-SLAPP Law
California's anti-SLAPP statute provides: "A cause of action against a person arising from any act of that person in furtherance of the person's [constitutional] right of petition or free speech ... in connection with a public issue shall be subject to a special motion to strike, unless the court determines ... there is a probability that the plaintiff will prevail on the claim." ( § 425.16, subd. (b)(1).) This statute "provides a procedure for weeding out, at an early stage, meritless claims arising from [specified constitutionally] protected activity." ( Baral , supra ,
"Resolution of an anti-SLAPP motion involves two steps. First, the defendant must establish that the challenged claim arises from activity protected by section 425.16. [Citation.] If the defendant makes the required showing, the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing a probability of success." ( Baral , supra ,
A. Legal Principles
Under the first step of the anti-SLAPP analysis, the moving party must show (1) the complaint alleges protected speech or conduct , and (2) the "relief is sought based on allegations arising from "
On the protected speech/conduct requirement, the statute identifies four categories of actions that are " 'in furtherance of' " a defendant's free speech or petition rights: "(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law, (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest, or (4) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest." ( § 425.16, subd. (e) ; see City of Montebello v . Vasquez (2016)
On the "arising from" requirement ( § 425.16, subd. (b)(1) ), the defendant must show "the defendant's act underlying the plaintiff's cause of action [was] itself " a protected act. ( City of Cotati v . Cashman (2002)
In recently clarifying these "arising from" principles, the California Supreme Court emphasized the need for courts to determine whether the protected activity was the alleged injury-producing act that formed the basis for the claim. ( Park , supra , 2 Cal.5th at pp. 1062-1063,
Under these principles, the Park court held the anti-SLAPP statute did not apply to a college-tenure discrimination claim despite the plaintiff's allegations that the college dean made discriminatory comments in the tenure process (assumed to be protected communications under the anti-SLAPP statute). (
Park was filed about nine months after Baral , in which the high court resolved a conflict among California Courts of Appeal on "mixed" causes of action, and held an anti-SLAPP motion may be used to strike particular claims of protected activity even without defeating a pleaded "cause of action" or "primary right." ( Baral , supra , 1 Cal.5th at pp. 381-382, 384-396,
The Gaynor beneficiaries alleged a single breach of fiduciary duty cause of action against James, claiming he participated with the Cotrustees to take actions that would wrongfully benefit the senior beneficiaries to the detriment of the Gaynor beneficiaries and other more junior beneficiaries. Within that cause of action, the Gaynor beneficiaries identified about 25 examples of wrongful conduct that reflected James's alleged breach of fiduciary duty. James acknowledges that most of these alleged acts do not constitute protected activity, including the alleged unfair and self-serving income-distribution decisions, the alleged improper transfer of the shopping center property into the Shopping Center LLC, the plan to alter the Trust provisions in a manner that would benefit only the senior beneficiaries, the failure to provide proper accountings, and actions allegedly taken to "hide" Mary's mental incompetence from her family. James thus does not seek to strike these allegations and acknowledges they remain regardless of the outcome of this appeal.
But James argues that other paragraphs of the petition allege protected activity, and contends the court erred in failing to determine these allegations triggered the Gaynor beneficiaries' obligation to establish a probability of prevailing on these claims. (See Baral, supra, 1 Cal.5th at pp. 392-396,
This argument is unavailing because the allegation that Trust assets were improperly used on the probate litigation was not a separate legal claim, but merely reflected the manner in which the Cotrustees and James implemented their alleged wrongful plan to alter the trustee succession rules to favor their own interests. The Baral court defined a "claim" properly subject to a section 425.16 motion as "allegations of protected activity that are asserted as grounds for relief." ( Baral, supra,
Even if we were to consider the "wasting trust assets" allegations as a separate "claim," James's appellate contention is without merit. We agree that filing petitions, motions, and briefs in court (and/or assisting in the filing) are protected petitioning activities under the anti-SLAPP statute. (See § 425.16, subd. (e)(2) ; Nunez v . Pennisi (2015)
This conclusion is consistent with decisions involving a client's malpractice or breach of fiduciary claim against the client's former attorney for breaching duties owed to the client. The courts have held a client's claims against his or her former attorney are not subject to the anti-SLAPP statute because the client is seeking recovery for the attorney's failure
James argues the Gaynor beneficiaries alleged he committed a breach of fiduciary duty merely by filing probate petitions that disfavored their interests (or encouraged/advised others to do so). When the petitioning activity itself is considered the tort upon which the subsequent lawsuit is based and for which relief is sought, the claim by definition falls within the purview of the anti-SLAPP statute. (See Jarrow Formulas , Inc . v . LaMarche (2003)
Although the form of the claim or cause of action (malicious prosecution versus a breach of fiduciary duty) does not determine the applicability of the anti-SLAPP statute (see Navellier , supra , 29 Cal.4th at pp. 90-93,
A recent Court of Appeal decision illustrates these principles. ( Greco v . Greco (2016)
The trial court found the anti-SLAPP statute did not apply, and the Court of Appeal affirmed on the breach of fiduciary duty and elder abuse claims. ( Greco , supra , 2 Cal.App.5th at pp. 818-819, 821-825,
The Greco court applied similar reasoning on the breach of fiduciary duty claims. ( Greco , supra , 2 Cal.App.5th at pp. 824-825,
Although Greco was filed before Park , Greco 's holding is consistent with Park . The Greco court focused on the factual basis for the claims and concluded the injury-producing activity was not the alleged wrongful filing of the lawsuits, and instead it was the use of trust assets to disadvantage the sister's interests. ( Greco , supra , 2 Cal.App.5th at pp. 821-825,
In his reply brief James challenges Greco 's holding on the ground that the Greco court did not mention the high court's Baral decision ( Greco was filed about three weeks after Baral ). However, Baral involved the second step of the anti-SLAPP analysis and addressed issues not in dispute in Greco , e.g., " 'mixed cause[s] of action.' " ( Baral , supra , 1 Cal.5th at pp. 381, 385, 396,
James devotes much of his reply brief to discussing a Court of Appeal decision, Sheley v . Harrop (2017)
In Sheley , the decedent had owned all of the shares of a corporation. ( Sheley , supra ,
The daughters moved to strike the cross-complaint under the anti-SLAPP statute, arguing the allegations relating to filing and maintaining the prior lawsuit
We find Sheley 's analysis unpersuasive on the "arising from" element. ( § 425.16, subd. (b).) Sheley was decided before Park , and did not have
Citing our recent decision in San Diegans for Open Government v . San Diego State University Research Foundation (2017)
Even assuming the funding of litigation is an act protected under section 425.16, subdivision (e)(2), the fact that the Gaynor beneficiaries
Also relying on San Diegans , supra,
In reaching our conclusions, we are mindful of Park 's admonition regarding the importance of carefully applying section 425.16's "arising from" requirement in governmental-abuse and discrimination claims to ensure the legislative intent underlying the anti-SLAPP statute is effectuated. ( Park , supra ,
Order affirmed. Appellant to bear respondents' costs on appeal.
WE CONCUR:
BENKE, Acting P. J.
DATO, J.
Notes
Respondents are: Dorothy Gaynor, James Wilmot, Michelle Gaynor, and Max Gaynor.
The Trust litigation has a lengthy history. We summarize only those facts necessary to resolve the anti-SLAPP issues before us, relying on the operative pleading and accepting as true the evidence favorable to the Gaynor beneficiaries. (See Park , supra ,
This petition was filed under Probate Code section 15409, subdivision (a), which states: "On petition by a trustee or beneficiary, the court may modify the administrative or dispositive provisions of the trust or terminate the trust if, owing to circumstances not known to the settlor and not anticipated by the settlor, the continuation of the trust under its terms would defeat or substantially impair the accomplishment of the purposes of the trust."
In their petition, the Gaynor beneficiaries refer to James as a "trustee de son tort ," which describes a person who is not a trustee, but has "undertaken to act in the capacity of a trustee" and thus may be held liable as a trustee under certain circumstances. (See King v . Johnston (2009)
The Gaynor beneficiaries also named Catherine, Mary's daughter, as a de facto trustee. Because she is not a party to this appeal, we do not describe the allegations against Catherine except as they are relevant to the claims against James.
After the court issued this order, the California Supreme Court rejected the primary right theory as relevant to defining a "cause of action" in the anti-SLAPP analysis. (See Baral v . Schnitt (2016)
On a different claim (misrepresentation), the Greco court found the brother met his anti-SLAPP burden because "[u]nlike the [breach of fiduciary] causes of action, the gravamen of this cause of action is not the taking, but alleged misrepresentations about the underlying litigation." (Greco , supra ,
After briefing was completed, the California Supreme Court granted a petition for review in the San Diegans case. (San Diegans , supra ,