Estate of Roger Kampen (California Court of Appeal, First Appellate District, Case Nos. A129849 and A130313, November 14, 2011, Pub. Order December 9, 2011).

The Court’s decision in Kampen is lengthy. It is a case that should be read if you are involved in issues relating to damages that can be recovered against an executor for breach of fiduciary duty, particularly in the context of damages that might be recoverable against an estate executor for significant delay in the distribution of estate assets following an order of distribution. The trial court did award damages against the executor including loss of compensation and the loss of value to the estate caused by the executor’s delay. However, the beneficiary appealed, contesting the trial Court’s manner of calculating damages, and also the trial Court’s denial of interest during the time of delay following the order of distribution. The beneficiary argued that the damages should have been larger and should have included some manner of calculation relating to the beneficiary’s lost claimed lost opportunity costs.

In summary, on appeal the Court affirmed the trial court’s manner of calculating damage caused by the executor’s delay, and held that interest did not accrue on the value of the estate following the order of distribution. The decision discusses many sub-issues pertaining to the calculation of damages in the context of an estate. For example, the Court held that an order of distribution is a final judgment that is in rem in nature, but it is not a money judgment; speculative damages are not recoverable; and the beneficiary of the estate “is not entitled to interest it could have earned on the cash in the estates. An executor is similar to a trustee in many respects but, unlike a strict trustee, an executor has no statutory duty to invest money belonging to the estate.” The Court also upheld the trial court’s partial holding against the beneficiary for laches relating to the beneficiary’s delay in enforcing its rights.

Dave Tate, Esq. (California)
Trust, estate, conservatorship and elder litigation and difficult administrations; hourly, referral/fee, contract, co-counsel, split hourly/contingency, and contingency arrangements considered.

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Dave Tate, Esq. (California)
Trust, estate, conservatorship and elder litigation and difficult administrations; hourly, referral/fee, contract, co-counsel, split hourly/contingency, and contingency arrangements considered.

Estate of Irving Duke, California Court of Appeal, Second District, Case No. B227954, December 4, 2011.

Decedent Irving Duke’s holographic will provided that on his death all of his property shall pass to his wife Beatrice, and that if Beatrice died at the same time that Decedent died all of his property was go pass to two charities.  The will did not address the situation where Beatrice might predecease Irving.  Beatrice did in fact die five years before Irving.  The two charities petitioned for probate of the will.  Two of Decedent’s nephews, who were not named in the will, argued that the condition under which the charities would have been entitled to distribution had not occurred, and that as a result Decedent’s estate should pass pursuant to the intestacy statutes.

The court agreed with the Decedent’s nephews, holding that as the will was unambiguous, extrinsic evidence could not be admitted in an effort to establish the Decedent’s intent, nor could an argument be made as to the construction or reformation of the will.  As the will was unambiguous, the clear result was that the Decedent’s assets should pass in accord with the intestacy statutes—it would be improper conjecture or speculation for the court to engage in an effort to correct the dispositive clause.

Although I don’t necessarily disagree that the will was unambiguous as far as its terms provided, it seems clear the will failed to address the situation where Beatrice predeceased Irving.  Thus, it can be argued that the will was ambiguous as to the events that did actually occur, i.e., that Beatrice predeceased Irving. It is also a maxim in California probate law that a Decedent’s estate should pass as the Decedent intended.  Based on the wording of the will, it is also no more certain that Decedent intended his estate to pass by intestacy.  Accordingly, it is arguable that extrinsic evidence should have been admitted as to Irving’s intent.  The court’s ultimate bright-line rule doesn’t necessarily do justice to the Decedent’s intent.

Dave Tate, Esq. (California)
Trust, estate, conservatorship and elder litigation and difficult administrations; hourly, referral/fee, contract, co-counsel, split hourly/contingency, and contingency arrangements considered.