By Noël Margaret Lawrence*
It is every estate and trust litigator’s worst nightmare: Triggering a no contest clause by mistake. A client in consultation with his lawyer makes a conscious decision, a strategic decision, to contest a will or a trust. It happens all the time. The client makes an informed decision to proceed with a will contest, or a trust contest, knowing that the contest will result in loss of a gift under the contested instrument. The client proceeds nonetheless because he hopes that the instrument will be struck down, and he will inherit under a different instrument. So far so good.
By contrast, and what is greatly to be avoided, is taking action that results in a contest by accident. This article will describe a way to accidentally contest a will, and a way to accidentally contest a trust. Obviously, if a practitioner fails to warn a client that the action the lawyer is going to take on behalf of a client constitutes, or could constitute a contest, and that failure to advise the client results in loss to the client, the attorney has incurred liability. It is the kind of liability that will be easy for a jury to understand, in the second suit, the one against the lawyer.
I. CONTESTING A WILL BY MISTAKE
Probate Code Section 21311(a)(1) provides that “A no contest clause shall only be enforced against the following types of contests: (1) a direct contest that is brought without probable cause.”
Section 21311(b) explains what constitutes probable cause: “For purposes of this section , probable cause exists if, at the time of filing a contest, the facts known to the contestant would cause a reasonable person to believe that there is a reasonable likelihood that the requested relief will be granted after an opportunity for further investigation or discovery.”
What is important under this statute are the facts known at the time of the filing of the contest. But what if, after the filing, further investigation or further discovery reveals that the contest lacks probable cause? Then it is almost certainly time to dismiss, and it is time to argue that at the time of filing the contest, probable cause existed, even though it came clear later on that it did not.
Every cause of action of the contest has to have been brought with probable cause or an unsuccessful plaintiff might face a malicious prosecution action. Crowley v. Katleman1. “[A] defendant cannot escape liability for the malicious prosecution of an unjustified charge by joining with it a justified charge.”2
Probate Code Section 21313 provides: “This part is not intended as a complete codification of the law governing enforcement of a no contest clause. The common law governs enforcement of a no contest clause to the extent this part does not apply.”
As explained below, under California common law, offering a subsequent will in bad faith (i.e. without probable cause) can be a contest of the earlier will. It all depends on the state of mind of person who offered that later will. It depends on what that person knew. That’s what makes it tricky. Just as Probate Code Section 21311(a)(1) turns on whether or not the party had probable cause, whether or not offering a subsequent will triggers the no contest clause turns on the good or bad faith of the proponent of that later will.
The case of Estate of Gonzalez/Gonzalez v. Gonzalez3 is a good example of a later will offered in bad faith constituting a contest of the prior will.
Jose Gonzalez died at the age of 81, survived by 12 children. They ranged in age from 18 to 66. Some of them were legitimate, and some were not. Jose entered into a will in 1992 that divided his estate equally between the four children born of his marriage to Carmen Garza Gonzalez: Enedina, Rosalinda, Roy and Jorge. Jorge, the youngest, and a sergeant with the San Jose Police Department, was named executor.
Jose’s 1992 will contained a no contest clause that stated: “If any beneficiary under this Will in any manner, directly or indirectly, contests or attacks this Will or any of its provisions, any share or interest in my estate given to that contesting beneficiary under this Will is revoked, and shall be disposed of in the same manner provided herein as if that contesting beneficiary had predeceased me.”
In early March, 1998, three weeks before Jose died, Jorge delivered to Jose for his signature (1) a grant deed that transferred title of Jose’s San Jose home to Jorge, and (2) a will that disinherited Jose’s other children and left Jose’s estate entirely to Jorge (consisting of property Jose owned in Mexico).
Roy filed a petition seeking to void the grant deed to the home in San Jose. Enedina and Rosalinda filed a petition to recover funds in bank accounts held jointly by Jose and Jorge. And they filed a motion to consolidate Jorge’s petition to probate the 1998 will, on the grounds of undue influence or fraud, with the siblings’ petition seeking a decree declaring the grant deed void, and the siblings’ petition seeking to impose a constructive trust on the funds in the bank accounts.
The case went to trial in 2000 on a set of facts that were very unfavorable to Jorge. A few highlights:
The court found that Jorge was in a confidential relationship with Jose. The court found that Jorge had actively participated in procuring the grant deed and the will. And the court made numerous findings regarding how ill and vulnerable Jose had been at the time the deed and the trust were entered into: Jose was unable to eat, he had a fever that came and went, he was in pain, he was weak, he was confused, he was forgetful, he had limited memory, he was disoriented, and he had constant headaches.
The court found that Jose was entirely dependent upon Jorge for management of his affairs. The court further found that Jose was totally dependent on others for assistance in bathing, eating, and performing personal hygiene.
It was Jorge who had his (Jorge’s) tax preparer draft the deed to the home in San Jose, which deed Jorge brought to his father’s bedside. Jorge brought a notary as well. Jorge had a fellow police officer (who had recently become an attorney) draft the will. Jorge brought the lawyer to Jose’s bedside. Jorge provided some translation for Jose and the lawyer. Jorge never left the room. Then, after the will was prepared, Jorge arranged for two witnesses: Jorge’s best friend (another police officer) and a neighbor (whose daughter had formerly been romantically involved with Jorge). Many bad facts for Jorge.
The last health care professional to see Jose before he died, saw him on March 13, 1998, within four days of the signing of the will and the deed. That health care professional described Jose as “frail, weak, incontinent, having cloudy urine, barely arouseable, disoriented, severely malnourished and severely dehydrated, and in a word, moribund.” The doctor who cared for Jose testified that on a scale of one to ten, with ten being the maximum risk of undue influence, Jose’s susceptibility was at 12. The court found that the deed and the will to be the product of Jorge’s undue influence.4
After the trial, each of Roy and Jorge filed a new petition seeking admission to probate of the 1992 will and each seeking his appointment as executor. The sisters and Roy each filed objections to Jorge’s petition, and Jorge filed objections to Roy’s petition.
Time for Jorge to get his comeuppance: The sisters filed a “petition to determine entitlement to estate distribution” to Jorge because he violated the will’s forfeiture clause. How did he do that? By offering for probate a will that he surely knew was not valid.
Following the hearing on the petition seeking to determine if Jorge had violated the no contest clause in the 1992 will, the judge issued a Statement of Decision finding that Jorge had indeed violated the 1992 will’s no contest clause, and hence Jorge had forfeited any interest he had under that will.
Jorge argued that the no contest clause in his father’s 1992 will should not be enforced against him because he had “reasonable cause” to offer the 1998 will to probate. Really?
The case cites Probate Code Section 21306(a) (now repealed):
“(a) A no contest clause is not enforceable against a beneficiary to the extent the beneficiary, with reasonable cause, brings a contest that is limited to one or more of the following grounds…(2) Revocation. (b) ‘Reasonable cause’ is defined for the purposes of this section to mean that the party filing the action, proceeding, contest, or objections has possession of facts that would cause a reasonable person to believe that the allegations and other factual contentions in the matter filed with the court may be proven or, if specifically so identified, are likely to be proven after a reasonable opportunity for further investigation or discovery.”5
That language is nearly identical to the language of new Probate Code Section 21311(a)(1) and (b):
(a) “A no contest clause shall only be enforced against the following types of contests:
(1) A direct contest that is brought without probable cause.
* * * * * * *
(b) For purposes of this section, probable cause exists if, at the time of filing a contest, the facts known to the contestant would cause a reasonable person to believe that there is a reasonable likelihood that the requested relief will be granted after an opportunity for further investigation or discovery.”
Would what Jorge did in offering the later will for probate be a direct contest under the new California no contest code sections? Clearly, yes.
Probate Code Section 21310(a) and (b)(5) provides:
“(a) ‘Contest’ means a pleading filed with the court by a beneficiary that would result in a penalty under a no contest clause, if the no contest clause is enforced.
(b) ‘Direct contest’ means a contest that alleges the invalidity of a protected instrument or one or more of its terms based on one for more of the following grounds:
* * * * * * *
(5) Revocation of a will pursuant to [Probate Code] Section 6120….”
Probate Code Section 6120(a) provides:
“A will or any part thereof is revoked by any of the following:
(a) A subsequent will which revokes the prior will or part expressly or by inconsistency.”
Most attorney drafted wills expressly revoke all prior wills. So, that is express revocation. Revocation by inconsistency? Most wills will do that simply because they dispose of some or all of the property disposed of by the earlier will. Where a will purports to dispose of all of decedent’s property, a will previously executed is wholly revoked.6 A later will, containing no express revocation of the earlier will [often a holographic will], but disposing of the entire estate, revokes the earlier will.7
The converse is also true. Offering a later will in good faith is not a contest brought without probable cause. “A provision in a will that if any beneficiary object to the distribution of the estate as made by the will or attempt to defeat the provisions of the will, any gift to such beneficiary other than five dollars shall be annulled and revoked, has no application to an attempt in good faith to probate what purports to be a later will.” (Emphasis added.)8
“An attempt in good faith to probate a later purported will, spurious in fact, but believed to be genuine by the party seeking its probate, does not fall within the forfeiture clause of the genuine will.”9
“If an attempt were made knowingly to probate a spurious will of a later date which purported to distribute the testator’s estate in a manner different than that of the genuine will, such an attempt would quite certainly come within the language of the forfeiture clause as an attempt to defeat the provisions of the will.”10
The Colorado Court of Appeals case of In Re the Estate of Henry Peppler11 has an unusual set of facts. In Peppler, “the [trial] court denied admission of [a] 1992 will to probate, finding that the testator lacked testamentary capacity to execute it and that it was the product of undue influence exerted upon testator by beneficiary” however, “the [trial] court declined to order enforcement of the no-contest clause. It concluded that the beneficiary did not directly or indirectly contest the 1984 will by offering the 1992 will for probate. The trial court found that the beneficiary was ‘well-intended’ and seemed to have been doing what she felt was right, but had herself been ‘badly advised and improperly influenced by her then-attorneys’ when the 1992 will was executed.”12
It is difficult to see how a trial court can find that a will is the product of a beneficiary’s undue influence and executed at a time when the testator lacked testamentary capacity, yet also find that the beneficiary was “well intended.” Yet that indeed is what the trial court did in Peppler – without explanation of how in fact that undue influence could be laid at the feet of the lawyers.
The Colorado Court of Appeals addressed the issue of whether “a finding of undue influence precludes applying a good-faith probable cause exception” to enforcement of the no contest clause, holding that no, the particular facts and circumstances of a given case might form the basis “for concluding that a beneficiary acted in good faith and with probable cause in offering a will for probate even if it is later determined that the will was the product of undue influence.” (Emphasis added.)13 Alright, but it is still hard to imagine, is it not?
In the first instance, the Court of Appeals agreed with the appellant that, indeed, the trial court erred in concluding that the beneficiary’s acts did not constitute an attack on the earlier will. The appellate court confirmed that “[o]ffering a subsequent will for probate can constitute a contest or attack within the meaning of a no-contest clause.”
But the Court of Appeals agreed with the trial court that “the evidence showed the attorneys ‘plotted this whole scenario and left [the beneficiary] holding the bag.’” Why the attorneys would do so is not explained, and we are left to wonder about the manner in which the attorneys would have benefitted from the new will.
So, having determined that a contest had occurred, the appellate court remanded Peppler to determine if, nonetheless, the beneficiary acted in good faith and with probable cause in offering the later will for probate, i.e. to determine “whether the [no contest] clause is nevertheless unenforceable because enforcement would be contrary to law or public policy.”14
The Oklahoma case of Estate of Westfahl15 is another difficult one to understand. L.C. Westfahl died on December 5, 1976. Thereafter, his daughter Betty Lou Goforth sought to probate his 1963 will. His son Harold Westfahl proffered his father’s 1976 will and sought to probate it. The trial court found that the 1976 will was the product of undue influence exerted upon the senior Westfahl by the son Harold. The court then admitted the 1963 will to probate.
Thereafter, Betty Lou sought to enforce the 1963 will’s no contest clause against Harold. The Oklahoma Supreme Court stated that “an attempt to probate a will known not to be a genuine instrument falls within the forbidden behavior of the in terrorem clause….”16 The Supreme Court went on, however, to find that “[u]nder the facts of the case, we find that Harold did not contest the validity of the 1963 will; he performed his statutory duty by propounding the 1976 will. Had he failed to produce the will , any of the Westfahl heirs could have compelled its production and Harold’s incarceration.” (Emphasis added.)17 The court goes on: “The statutes require that all wills be presented to the court for its determination concerning which is to be given full force and effect. We agree with the trial court’s finding that the no contest clause was inapplicable to Harold’s actions.”
It is difficult to see how Harold could be found to have exerted undue influence on his father to make the 1976 will, and at the same time be found to have offered that will in good faith and with probable cause. “An attempt in good faith to probate a later purported will, spurious in fact, but believed to be genuine by the one presenting it for probate does not render the offeror subject to the forfeiture provisions of the no contest clause is he/she has probable cause to believe that the instrument is genuine and entitled to probate.”18
Yes, the custodian of an original will is obligated to lodge the will with the Superior Court of the county of residence of the decedent. That certainly is the rule in California. According to Probate Code Section 8200(a), unless a petition for probate is filed earlier, within 30 days after learning of decedent’s death, the custodian of decedent’s will must do both of the following: (1) Deliver the original will to the clerk of the superior court of the county in which the estate may be administered; and (2) Mail a copy of the will to the named executor or, if the named executor’s whereabouts are unknown, to a named beneficiary whose whereabouts are known. Section 8200(b) provides that a custodian who fails to comply with the delivery requirements will be held liable for all damages sustained by any person injured thereby. If the court orders a custodian to produce a will, that order can be enforced by the contempt power of the court.
The Westfahl case cites very similar code sections in effect in Oklahoma, 58 O.S. 1981 Sections 21 and 24. Fine, Harold had a duty to deliver the 1976 will to the court. But did he have a duty to seek the 1976 will’s admission to probate? Because that is what he did.
Are we to believe that Harold was unaware of his own exertion of undue influence on his father? Can Harold be both the exerter of undue influence, and also in good faith when he offered the product of his undue influence for probate?
Apparently yes, however the Westfahl case does not explain how that could be possible. It says simply that the “no contest clause was inapplicable to Harold’s actions” without explaining why that was so.
The Arkansas case of Seymour v. Biehslich19 is easier to understand, under very similar facts. Floyd Ray Davis Sr. died on May 18, 2002. Shortly thereafter his daughter, Gladys Biehslich filed a petition to probate a will dated May 6, 2002. The will provided for a few specific bequests, and bequeathed the remainder of the decedent’s property to his seven children and to the issue of his one deceased son. The will contained a no contest clause.
A few weeks later, another daughter of the decedent, Murriel Seymour, filed a petition to probate a will dated May 13, 2002, one week after the first will, and six days before Mr. Davis died.
The second will was handwritten (not by Mr. Davis but by Murriel!). It gave $1,000 to be shared by Mr. Davis’s children and grandchildren and the remainder of the estate entirely to Murriel. A hearing was held on Murriel’s petition to probate the later will, and the court denied the petition.
Thereafter, Gladys sought to exclude Murriel from inheriting under the earlier will. The Seymour Court found that Murriel’s actions in seeking to probate the second will were not in good faith, and relying on Estate of Peppler, Estate of Westfahl and Estate of Gonzalez, found that Murriel had violated the no contest clause of the May 6, 2002 will.20
Similarly, in the New York case of Kirkholder’s Estate,21 the court observed that while courts are indulgent and generous in interpreting a clause in a will forfeiting a bequest in case of a contest by the legatee, “[t]he offer and attempt to prove a false and spurious document in the place and stead of the last will of the testator is equivalent to a contest and a breach of the conditions of the legacy.”22
So, the take away from Gonzalez (and the related cases from foreign jurisdictions) is this:
As the plaintiff: If your client has a “fall back” position – meaning, if he hopes to inherit a lesser amount, or inherit something different under a prior will, and is counting on that when he offers the later will, he better have probable cause to offer the later will. He better be in good faith.
And his lawyer better warn him (put it in writing) that he could well be put in the position of defending the reasonableness of his actions. The short of it is: One can never be sure. It is a calculated risk. Not for nothing do most wills contain a no contest clause. They seek to cause just this kind of caution, concern, hesitation and reluctance.
As the defendant: You will want to defend the contest of course. But your job is larger than that. You also want to gather as much evidence as possible that this contest was brought without probable cause. If the defendant prevails, very soon thereafter on behalf of the proponents of the earlier will, you will want to challenge the reasonableness of the contest. Time might be short, and you need to be prepared.
And, if the defendant can make out the case that there was no probable cause, and can prove that in addition, the case was commenced and pursued with malice, the defendant has a malicious prosecution case against the plaintiff. According to Crowley v. Katleman23 a malicious prosecution case can be brought when only some or only one of the causes of action of the will contest lacked probable cause and was brought with malice.
In the course of litigating the contest, be mindful of whether one or more causes of action should be dismissed. If as the evidence is developed it comes clear that a cause of action is not supported by evidence, dismiss it. And immediately prior to the commencement of trial, the plaintiff will know, as well as he is ever going to know, what evidence supports each cause of action. Reassess each claim and if any of them lacks probable cause, dismiss it. No one wants to be on the receiving end of a malicious prosecution action. Also, because the notion of what a “reasonable person” might believe is very subjective, remove the possibility of trouble down the road.
Be sure in particular to scrutinize any lack of testamentary capacity claim. In this author’s experience, since the enactment of the Due Process in Competence Determinations Act in 1995, Probate Code Section 810 et seq., it has become extraordinarily difficult to prove lack of testamentary capacity. Why? Because many of the sorts of things that need to be evaluated and examined are the sorts of things that are best evaluated and examined by a health care professional while the decedent is still alive. E.g. Probate Code Section 811: “ability to attend and concentrate (part (a)(1)(C)),” “ability to understand and appreciate quantities,” (part (a)(2) (D)), “uncontrollable repetitive or intrusive thoughts”(part (a)(3)(D)), “ability to modulate mood and affect “(part (a)(4)).
To take this author’s thirty plus years of litigating will contests and trust contests as an example, only once was a lack of testamentary capacity claim sustained, and that poor man was practically in a coma at the time he signed the will. Again, in this author’s experience, the great majority of contests that are successful, are successful based on an undue influence claim. Do not weaken your case, or undercut your credibility, by including a lack of capacity claim that cannot be sustained.
II. CONTESTING A TRUST BY MISTAKE
Contesting a trust by mistake is easy to do. In this example, the client is the defendant to a trust contest. The plaintiff has alleged that the trust is invalid. The plaintiff seeks to have the later trust declared invalid. The plaintiff wants an earlier trust to be given effect. Typically when a new trust is entered into, the settlor executes a writing revoking the earlier trust.
So, there is a separate document in the nature of a trust revocation. It usually is signed just prior to, or at the same time the new, later trust is entered into. Probate Code Section 15401(a)(2) provides that “A trust that is revocable by the settlor may be revoked in whole or in part…(2) By a writing (other than a will) signed by the settlor and delivered to the trustee during the lifetime of the settlor….”
And, typically, at the same time that the plaintiff contests the later trust, he also contests the trust revocation document. The plaintiff wants to restore the earlier trust, so he wants to eliminate both the later trust, and the document that revoked the earlier trust. The plaintiff alleges that both the later trust and the trust revocation are invalid. The defendant denies those allegations. The defendant answers the contest and defends the validity of the revocation.
There it is. The defendant was not thinking in terms of contesting anything. He was just answering the complaint. He was doing what defendants do. He was denying the allegations made by the plaintiff. But in doing so, he was advocating for the revocation of the trust. Probate Code Section 21310(b) provides that a direct contest includes a contest that alleges the invalidity of a protected instrument based on “revocation of a trust pursuant to Section 15401.” Probate Code Section 21310(a) provides that a contest means “a pleading filed with the court by a beneficiary that would result in a penalty under a no contest clause if the no contest clause is enforced.” Section (d) states that a “pleading” means…an answer [or] a response….” There it is. There is your pleading, your answer to the contest. And there is the new contest, the other one, the one brought by the defendant.
By defending the revocation document and advocating for its validity, the defendant has in essence alleged the invalidity of the earlier trust. The defendant has contested the earlier trust. Whether or not he has done so with probable cause is, of course, another issue.
This is an easy mistake to make. And maybe it is not even a mistake, depending on the circumstances of the case. But, of course, what is important for the lawyer to realize is that answering the complaint and advocating for the revocation document is indeed a contest. The lawyer needs to advise the client in advance, and only proceed if the client decides to assume that risk. It may very well be reasonable to proceed notwithstanding. The point is, the lawyer should counsel the client, and should document that he counseled the client, and that the client decides to go forward anyway.
III. RETHINKING NO CONTEST CLAUSES
As described above, a beneficiary can contest an earlier trust by defending and advocating for the document that revoked the earlier trust. When the later trust is contested, almost certainly the contestant will also contest the document of revocation.
The defendant has no good options. He or she either allows the contest of the revocation instrument to go unopposed, or he or she answers the complaint by defending the validity of the instrument of revocation. When the defendant defends the validity of the instrument of revocation, the defendant has contested the earlier trust under Probate Code Section 21310(a)(5).
What to do? “[The] [d]rafter may consider expanding the definition of ‘probable cause’ to include filing a responsive pleading to avoid the incongruous and unfair result that a pleading filed in defense will cause a forfeiture.” John A. Hartog, Taking the Fright Out of Drafting No Contest Clauses Under the New Regime.24
“‘Non-beneficiaries’ under the instrument have nothing to lose by contesting the instrument. In fact, if a ‘non-beneficiary’ attacks and instrument, the presence of a no contest clause applicable to all beneficiaries may limit the range of responses available to named beneficiaries in defending their interests.”25
See also Neil F. Horton, The New No Contest Law: New Challenges for Trusts and Estates Attorneys26 for a good discussion and explanation of the new no contest code sections. That article ends with some good advice:
“Estate planning attorneys should use no contest clauses sparingly and cautiously. They should make sure that their clients understand the possible draconian consequences to their loved ones of including a no contest clause. They should consider less severe alternatives to achieve their clients’ wishes, such as conditional gifts. They should consider tailoring the object of the clause to a particular beneficiary or class of beneficiaries, rather than allowing the clause to apply to ‘any beneficiary.’ Above all, they should not insert a boilerplate no contest clause into every trust and will they draft.”27
That’s good advice. But right now the law firm safes and bank safe deposit boxes are full of wills containing no contest clauses written long ago that all of us have to deal with, and navigate around. When you think you are doing one thing (offering will no. two for probate or defending trust no. two) be aware that you could be doing something else as well: Contesting will no. one, or trust no. one. That may be the right decision, but make sure both you and your client do so knowingly.
*Noël Margaret Lawrence Oakland
- Crowley v. Katleman (1994) 8 Cal.4th 666.
- Id. citing Albertson v. Raboff (1956) 46 Cal.2d 375, 385.
- Estate of Gonzalea/Gonzalez v. Gonzalez (2002) 102 Cal.App.4th 1296.
- Id. at pp. 1301.
- Id. at pp. 1303.
- In Re Martin’s Estate (1939) 31 Cal.App.2d 501; In Re Mallon’s Estate (1938) 28 Cal.App.2d 106.
- In Re Marx’s Estate (1917) 174 Cal. 762.
- Estate of Bergland (1919) 180 Cal.629.
- Id. at pp. 634.
- Id. Citing In re Kirkholder’s Estate (1916) 149 N.Y. Supp. 87.
- Estate of Peppler (1998) 971 P.2d 694.
- Id. at pp. 696.
- Id. at pp. 698.
- In re Estate of Westfahl (1983) Ok 119, 674 P.2d 21
- Id. at pp. 24.
- Citing Bergland (supra), Kirkholder (supra) and Annot., “What Constitutes Contest Or Attempt To Defeat Will Within Provisions Thereof Forfeiting Share of Contesting Beneficiary,” 49. A.L.R. 198, 241-43 (1956).
- Seymour v. Biehslich (2007) 371 Ark. 359, 266 S.W. 3d 722
- 371 Ark., 359, 364.
- In Re Kirkholder’s Estate (1916) 149 N.Y.Supp. 87
- Id. at pp.89.
- Crowley v. Katleman (1994) 8 Cal.4th 666.
- Estate Planning 2009, UCLA/CEB Estate Planning Institute, pp. 449.
- Neil F. Horton, The New No Contest Law: New Challenges for Trusts and Estates Attorneys, California Trusts and Estates Quarterly, Vol. 14, Issue 3, Fall 2008 page 7.
© 2012 by Noël Margaret Lawrence