New California case – California lacks personal jurisdiction over a Utah resident on a cross-complaint against her individually as a third party for intentional interference with prospective economic advantage, although the real property was located in California, and the Utah resident was appointed guardian ad litem for her mother in California

Keri Jensen v. Trine Jensen (Court of Appeal, Second Appellate District, B2896111, January 24, 2019), is very fact specific, so its value is mostly in the court’s legal evaluation as applied to this specific case. Frankly, I am a bit surprised by the court’s holding. Daughter Trine came to California and moved her mother back to Utah to stay with Trine. Trine was also appointed as guardian ad litem for her mother in California. Mother sued other daughter Keri in California relating to a parcel of real property that had been co-owned by mother and daughter Keri. In that lawsuit Keri then cross-complained against Trine personally and individually, not as guardian ad litem, for intentional interference with prospective economic advantage claiming that Trine took advantage of mom’s advancing dementia and coerced mom to sever the joint tenancy in the California real property.

Trine filed a motion to quash for lack of personal jurisdiction which the trial court granted and the court of appeal upheld. Since the parties apparently agreed that Trine was not subject to general jurisdiction in California, the court evaluated whether Trine purposefully availed herself of the California forum benefits, whether the controversy is related to or arises out of the Trine’s contacts in California, and whether California’s assertion of personal jurisdiction over Trine would comport with fair play and substantial justice.

It seems to me that this case is a close call as the real property is located in California. The court in dicta also made the point that Trine was not sued in California as guardian ad litem. I also note that there would be jurisdiction over Trine in Utah. The case also has other less relevant facts and is interesting reading relating to possible undue influence.

Thanks for reading this post. If you have found value in this post, I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly. And please also subscribe to this blog and my other blog (see below), and connect with me on LinkedIn and Twitter.

Every case situation is different. You do need to consult with professionals about your particular situation. This post is not a solicitation for services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only

Blogs: California trust, estate, and elder abuse litigation and contentious administrations http://californiaestatetrust.com; D&O, audit committee, governance and risk management http://auditcommitteeupdate.com

New California case upholds the substantial benefit doctrine for payment and recovery of attorneys’ fees and expert witness fees from the entire trust and the shares of all of the beneficiaries

In Smith v. Szeyller (Court of Appeal, Second Appellate District, B281758, January 16, 2019), the court held that the probate court’s award approving payment of attorneys’ fees and expert witness fees from the trust to the beneficiary who challenged the trustees’ accounting and management of the trust was appropriate under the substantial benefit doctrine. The beneficiary who challenged the trustees’ accounting and management of the trust prevailed, thus benefiting the trust and all beneficiaries of the trust although only the one beneficiary challenged the accounting and management. As the trust and all of its beneficiaries benefited from the successful challenge, it was appropriate that the attorneys’ fees and expert witness fees be paid and reimbursed from the assets of the entire trust and the shares of each of the beneficiaries thereof.

Note: I used this doctrine after a successful week-long trial in one of my cases.

Thanks for reading this post. If you have found value in this post, I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly. And please also subscribe to this blog and my other blog (see below), and connect with me on LinkedIn and Twitter.

Every trust situation is different. You do need to consult with professionals about your particular situation. This post is not a solicitation for services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only

Blogs: California trust, estate, and elder abuse litigation and contentious administrations http://californiaestatetrust.com; D&O, audit committee, governance and risk management http://auditcommitteeupdate.com

California Trustee – Some Of The Things That Could Keep You Up At Night

Trustee responsibilities are extensive and they arise from different sources including the wording of the trust itself, statutes, and case law. Of course, you have to cover all areas of your trustee responsibility, but here is my list of primary issues that could keep me up at night as a trustee. If you are a trustee, you want to do it right. If you are a beneficiary, you want to receive that to which you are entitled. And there can be a lot of angst, stress, misunderstanding, and disagreement in these situations. A significant part of my practice includes trust, estate, and elder abuse litigation and disputes – including contentious administrations. This list is not in any particular order. You might also notice that I update and republish this discussion from time to time as it includes important points that can apply to most trust administrations.

  1. Do you understand what the trust says and requires? This might sound basic, but it isn’t always.
  2. Have you marshalled and safeguarded the assets that are in or that are supposed to be in the trust? Are the assets in the trust, and are they under your control?
  3. Do you really understand your legal responsibilities including not only the wording and requirements in the trust, but also what the probate code and case law require of you? As a trustee you are a fiduciary. You have one of the highest standards of care, responsibility, liability and unbiased fairness and good faith required by law.
  4. Do you have a game plan for the steps required to accomplish the administration of the trust, including the time and timing that it will take? Completing the administration typically takes longer than most people would think. And this alone can cause disagreements, stress, and disputes. There is a court case on this issue, and there are court cases on many of these issues – basically, the case held that a trustee needs to conduct the administration process reasonably expeditiously, but the court decided to not to say that the administration must be “fast” or “quick” or completed in the “fastest” manner. In other words, there is a degree of reasonableness here.
  5. Are the trust assets being invested, managed and recorded properly and prudently? You need to evaluate and manage the returns and the risks, in accord with the wording of the trust and your statutory and case law fiduciary duties. So, for example, the stock market goes up and down. If the market goes down, is your approach to the portfolio management designed to help you avoid liability for losses, not just because the market went down, but also because you have implemented a portfolio approach and might allow you to net losses against gains? And are your investments prudently diversified, also taking into consideration possible risks? You will find additional posts on this blog about investment responsibilities.
  6. Do you have and use the proper fiduciary demeanor and decision-making approach required of a trustee?
  7. Is the trust cash flow prudently managed? You might, for example, through no fault of your own have a trust with declining asset values or liquidity issues, or there might simply be expense and distribution timing issues.
  8. Do you know what to do if you have beneficiaries who are disagreeing with your decisions, or who are threatening litigation, or who have initiated litigation?
  9. Do you know what information you must or possibly should provide to the beneficiaries and when to provide it, including, for example, possible accountings and other information? Even if an accounting isn’t required, sometimes I recommend that a trustee prepare an accounting or some form of an accounting anyway. And, of course, under all circumstances you should and usually must keep accurate and complete records. Even if an accounting is not required, or is not required to be prepared to cover a particular period of time, it is not uncommon for courts to require that an accounting be prepared anyway. And, court and probate code compliant accountings include specific and detailed requirements.
  10. Do you understand that you have personal liability exposure for the actions that you take or don’t take as the trustee? You are required to be prudent with risk management. Also consider possible fiduciary insurance coverage although in most situations it isn’t required or necessary.
  11. Do you know what additional planning opportunities exist or might exist, such as for tax purposes? Similarly, are you aware of new or changing tax, probate code, planning, and investment statutes and rules? And have you calendared important planning and compliance dates?
  12. Do you know how to prudently handle distributions and the timing of distributions? Do you know how to wrap things up and conclude the administration?
  13. Do you know what to do if there is a dispute about how the administration is being handled? This is important. As a trustee you can get yourself into even greater difficulty depending on how you handle disputes and disagreements. And for administration attorneys, I have written about changes to the Rules of Professional Conduct that were implemented on November 1, 2018, and that should be considered in appropriate circumstances.
  14. And last on this list, are you represented by the necessary and appropriate professionals to advise you on your fiduciary duties, trust administration management, compliance, taxes, investments, insurance, asset protection and preservation, communicating with beneficiaries, and other important or possibly important issues?

Thanks for reading this post. Every trust situation is different. You do need to consult with professionals about your particular situation. This post is not a solicitation for services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only

Blogs: California trust, estate, and elder abuse litigation and contentious administrations http://californiaestatetrust.com; D&O, audit committee, governance and risk management http://auditcommitteeupdate.com

If you have found value in this post, I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly. And please also subscribe to this blog and my other blog (see above), and connect with me on LinkedIn or Twitter.

Deaths From Opioids Now Exceed Vehicle Deaths (Forwarding) – But Where Are The Numbers For Seniors And People In Care Facilities?

The following is a link to a short article discussing deaths from opioids now exceeding vehicle deaths. You have already been hearing a lot about opioids and deaths and addictions. Click Here

My issue with the discussion is that information and numbers aren’t given for seniors and people in care facilities. More is needed.

Best to you, David Tate, Esq. (and inactive California CPA)

Blogs: California trust, estate, and elder abuse litigation and contentious administrations http://californiaestatetrust.com; D&O, audit committee, governance and risk management http://auditcommitteeupdate.com

If you have found value in this post, I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly. And please also subscribe to this blog and my other blog (see above), and connect with me on LinkedIn or Twitter.

New Rules of Professional Conduct – As Applied to Estate Planning and Trust and Estate Administration Attorneys – Additional Discussion About Rules 3.7, 1.7, 1.9, and 1.10

In a previous blog post, see https://wp.me/p1wbl8-rf, I discussed new California Rule of Professional Conduct, Rule 3.7, which pertains to a lawyer as a witness and a lawyer in the same firm as an advocate in litigation. As of November 1, 2018, Rule 3.7 now also applies in non-jury, court trials, such as probate court proceedings.

Separate from Rule 3.7(a), the possible applicability of other Rules should also be considered in appropriate circumstances including, for example, Rules 1.7 (Conflicts of Interest: Current Clients), 1.9 (Duties to Former Clients), 1.10 (Imputation of Conflicts of Interest: General Rule), and 1.6 (Confidential Information of a Client).

Rule 3.7(b), for example, states “A lawyer may act as advocate in a trial in which another lawyer in the lawyer’s firm is likely to be called as a witness unless precluded from doing so by rule 1.7 or rule 1.9.” Thus, in appropriate circumstances Rule 3.7(b) also can trigger, or possibly trigger, Rules 1.7 (Conflict of Interest: Current Clients) and 1.9 ((Duties to Former Clients). Further, while Rule 3.7(b) references Rule 1.7 and Rule 1.9, it does not reference Rule 1.10; but note, however, that Rule 1.10 (Imputation of Conflicts of Interest: General Rule) does reference Rule 1.7 and Rule 1.9. Thus, Rule 1.10 may apply to impute conflicts to lawyers that are associated in a firm, and may also apply when a lawyer has been terminated from a firm. Accordingly, in appropriate circumstances multiple attorneys at the same law firm might become prohibited from representing or limited in their representation of a client although only one of the firm’s attorneys might be directly prohibited or limited. On the other hand, there is a legal preference for allowing a client to select his or her own attorney , and various of the Rules allow a client to waive in writing conflicts or potential conflicts upon informed consent. In the context of an estate planning and administration practice, and depending on the factual situation at hand, you should be considering Rule 3.7, in addition to Rule 1.10, Rule 1.7, Rule 1.9 and Rule 1.6, and other possibly applicable Rules, including any other attorney or client (e.g., trustee and executor) responsibilities or duties that might also apply.

Why am I spending blog time on these topics? Because they are important, and they have become more important, for estate planning and administration attorneys and firms. For example, it is not necessarily uncommon for an estate planning and administration attorney and firm to represent husband and wife for estate planning and as the initial trustees, the surviving spouse as sole remaining trustee for administration after the death of the first spouse to die (possibly including court proceedings), a son or daughter as the successor trustee for post-parent administration (possibly including court proceedings), and various people as attorneys in fact pursuant to various powers of attorney, or possibly as conservator. And it is not uncommon for estate planning and trust and estate administration attorneys to have knowledge of underlying background facts that might be relevant in situations in which there are disputes or litigation.

Rules of Professional Conduct, Rule 1.7 (Conflict of Interest: Current Clients) states as follows:

(a) A lawyer shall not, without informed written consent from each client and compliance with paragraph (d), represent a client if the representation is directly adverse to another client in the same or a separate matter.

(b) A lawyer shall not, without informed written consent from each affected client and compliance with paragraph (d), represent a client if there is a significant risk the lawyer’s representation of the client will be materially limited by the lawyer’s responsibilities to or relationships with another client, a former client or a third person, or by the lawyer’s own interests.

(c) Even when a significant risk requiring a lawyer to comply with paragraph (b) is not present, a lawyer shall not represent a client without written disclosure of the relationship to the client and compliance with paragraph (d) where:

(1) the lawyer has, or knows that another lawyer in the lawyer’s firm has, a legal, business, financial, professional, or personal relationship with or responsibility to a party or witness in the same matter; or

(2) the lawyer knows or reasonably should know that another party’s lawyer is a spouse, parent, child, or sibling of the lawyer, lives with the lawyer, is a client of the lawyer or another lawyer in the lawyer’s firm, or has an intimate personal relationship with the lawyer.

(d) Representation is permitted under this rule only if the lawyer complies with paragraphs (a), (b), and (c), and:

(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;

(2) the representation is not prohibited by law; and

(3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal.

(e) For purposes of this rule, “matter” includes any judicial or other proceeding, application, request for a ruling or other determination, contract, transaction, claim, controversy, investigation, charge, accusation, arrest, or other deliberation,
decision, or action that is focused on the interests of specific persons, or a discrete and identifiable class of persons.

Rules of Professional Conduct, Rule 1.9 (Duties to Former Clients) states as follows:

(a) A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client
unless the former client gives informed written consent.

(b) A lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client

(1) whose interests are materially adverse to that person; and

(2) about whom the lawyer had acquired information protected by Business and Professions Code section 6068, subdivision (e) and rules 1.6 and 1.9(c) that is material to the matter;

unless the former client gives informed written consent.

(c) A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter:

(1) use information protected by Business and Professions Code section 6068, subdivision (e) and rule 1.6 acquired by virtue of the representation of the former client to the disadvantage of the former client except as these rules or the State Bar Act would permit with respect to a current client, or when the information has become generally known; or

(2) reveal information protected by Business and Professions Code section 6068, subdivision (e) and rule 1.6 acquired by virtue of the representation of the former client except as these rules or the State Bar Act permit with respect to a current client.

California Rule of Professional Conduct Rule 1.10 is new, and it may have ramifications in various situations. In part, Rule 1.10(a) provides that in certain circumstances if one attorney in a law firm is prohibited from representing a client under Rule 1.7 or Rule 1.9, other attorneys who are also associated in the same firm also might be prohibited from representing the client through imputed conflict of interest.

Rule of Professional Conduct, Rule 1.10 (Imputation of Conflicts of Interest) states as follows:

(a) While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by rules 1.7 or 1.9, unless

(1) the prohibition is based on a personal interest of the prohibited lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm; or

(2) the prohibition is based upon rule 1.9(a) or (b) and arises out of the prohibited lawyer’s association with a prior firm, and

(i) the prohibited lawyer did not substantially participate in the same or a substantially related matter;

(ii) the prohibited lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; and

(iii) written notice is promptly given to any affected former client to enable the former client to ascertain compliance with the provisions of this rule, which shall include a description of the screening procedures employed; and an agreement by the firm to respond promptly to any written inquiries or objections by the former client about the screening procedures.

(b) When a lawyer has terminated an association with a firm, the firm is not prohibited from thereafter representing a person with interests materially adverse to those of a client represented by the formerly associated lawyer and not currently represented by the firm, unless:

(1) the matter is the same or substantially related to that in which the formerly associated lawyer represented the client; and

(2) any lawyer remaining in the firm has information protected by Business and Professions Code section 6068, subdivision (e) and rules 1.6 and 1.9(c) that is material to the matter.

(c) A prohibition under this rule may be waived by each affected client under the conditions stated in rule 1.7. (d) The imputation of a conflict of interest to lawyers associated in a firm with former or current government lawyers is governed by rule 1.11.

All of this having been said, each situation in which these Rules might apply must be evaluated on a case by case basis. The situations, potential situations, and situations that could develop can be or can become complicated. And other possibly applicable Rules, including any other attorney or client (e.g., trustee and executor) responsibilities or duties might also need to be considered. This post is already long and complicated enough – in subsequent posts we will be going in to greater detail about these Rules and how they might or might not apply in particular situations.

Thanks for reading this post. If you have found value in this post, I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly. And please also subscribe to this blog and my other blog (see below), and connect with me on LinkedIn and Twitter.

Every case situation is different. You do need to consult with professionals about your particular situation. This post is not a solicitation for services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only

Blogs: California trust, estate, and elder abuse litigation and contentious administrations http://californiaestatetrust.com; D&O, audit committee, governance and risk management http://auditcommitteeupdate.com

Forwarding, How Can You Tell If Your Client Has Diminished Capacity, From AgingInvestor.com / Rosenblatt and Davis

I am forwarding a link to a new discussion, How Can You Tell If Your Client Has Diminished Capacity, by Carolyn Rosenblatt, RN, Elder Law Attorney, & Dr. Mikol Davis, Gerontologist co-founder of AgingInvestor.com.

Here is the link to the discussion – I believe you will find it useful – there really isn’t enough discussion about these topics, and I would also like to see more education for Judges on these topics: Click Here

This is a difficult topic both factually and from a legal perspective. It really has to be evaluated on a situation by situation basis. In my cases and from a legal perspective the issue would primarily be whether the client has sufficient mental capacity to understand, ask about and discuss, evaluate, and make decisions about the issues and options. And, diminished capacity also can relate to possible undue influence, fraud, and elder and dependent adult abuse issues, and whether the client has the ability to resist and does actually and effectively resist and defend herself or himself from wrongful or undue actions, pressure or persuasion by other people? There are laws (statutes) and cases discussing these issues, but it does come down to a situation by situation basis as every case is different.

Best to you, David Tate, Esq. (and California inactive CPA)

Reaching Out to Non-Litigation Estate Planning Attorneys & Staying in Touch – Get Together for a Coffee Meet and Greet

Dear Friends, Colleagues & Connections:

The great majority of my cases – trust, estate, elder and dependent adult abuse, POA, care and nursing home, and conservatorship cases – are referred to me by estate planning attorneys who need help with or who don’t handle disputes and litigation.

For a couple of years now I have been having coffee meet and greets with estate planning attorneys who need help with or who refer disputes and litigation. But I have never posted an invitation.

So here it is . . . . if you are a SF Bay Area estate planning attorney who might need help with or who refers disputes and litigation, we should get together for an informal coffee meet and greet to discuss your practice, and mine. Send an email to me at the email that I use for my blog: davetateesq@gmail.com

And, here is a link to a recent post about new Rule of Professional Conduct 3.7 as it applies or might apply to estate planning or trust and estate administration attorneys in court proceedings, https://wp.me/p1wbl8-rf

Best to you – David Tate, Esq. (and California inactive CPA)

Blogs:

Trust, estate, and elder and dependent audit abuse disputes and litigation, and contentious administrations http://californiaestatetrust.com

Audit committees, D&O, business, governance, compliance, investigations, litigation, responsibilities and rights, liability, and risk management http://auditcommitteeupdate.com

Also connect with me on Linkedin and Twitter