Barefoot v. Jennings, Supreme Court of California (January 23, 2020), S251574, 2020 WL 372523
Summary and Holding: (1) Settlor Maynord executed eight amendments (amendment numbers 17 through 24) to the trust through which petitioner’s/plaintiff’s share of the trust as set out in the 16th amendment was eliminated; (2) the Court held that petitioner/plaintiff, an ex-beneficiary, has standing to bring an action under Cal. Probate Code §17200 to challenge the validity of the trust amendments where she alleges that the amendments that disinherited her were invalid because Maynord was incompetent to make the amendments; the amendments were the product of respondents’/defendants’ undue influence; and the amendments were the product of respondents’/defendants’ fraud; (3) §17200 allows a trustee or a beneficiary to petition the Court; (4) petitioner/plaintiff had standing under §17200 because although she is not currently a beneficiary, she would or will be a beneficiary if her allegations are proven.
The following are my initial comments:
- I don’t understand why the Court went down this path – petitioner already had standing to challenge or contest the trust amendments under her three theories (lack of mental capacity, undue influence, and fraud) – §17200 wasn’t necessary to provide petitioner with standing. Nevertheless, the holding is as it is.
- Allegations of lack of mental capacity, undue influence, and fraud can or might trigger a no contest clause – does bringing the action under §17200 in some manner change (lower or eliminate) that argument? See also footnote 3 in this regard.
- It is interesting that since petitioner was provided benefits under the 16th amendment, she had to argue that the 17th through 24th amendments are all invalid.
- The Court’s decision is not based on the Legislative intent – I would have thought that it would be, or at least that the Court would have thought that the Legislative intent would be relevant.
- In its decision the Court specifically declines to discuss or interpret Cal. Probate Code §850. That would have been an interesting discussion as I have had cases involving allegations pertaining to §850 (and §859) and when someone has standing or not – there is almost no case law on this topic although there is Legislative history. For example, one provision of §850 provides that in particular circumstances a trustee or an interested person has standing to bring a petition – but absent case law, I would not view “interested person” under §850 as being the same as “beneficiary” in the context of the Barefoot v. Jennings discussion under §17200.
- The Court’s decision is of interest for additional reasons, including, for example, the Court’s affirmation that in construing a trust the Court’s primary duty is to give effect to the settlor’s intentions, and the Probate Court has extremely broad power and authority to apply equitable and legal principles in order to assist its function as a Probate Court, and is given broad jurisdiction over practically all controversies that might arise between trustees and those claiming to be beneficiaries of the trust (including to preserve trust assets and the rights of all purported beneficiaries while the Court adjudicates the standing issue).
We can expect that more decisions will be forthcoming relating to the impact of the holding in Barefoot v. Jennings, potential issues that I have discussed above, standing under §17200, and the entirety of §850, et seq.
You can click on the following link for a copy of Barefoot v. Jennings Barefoot v Jennings California Supreme Court
Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other 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 or as legal or other professional advice or representation.
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Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only.
I am also the Chair of the Business Law Section of the Bar Association of San Francisco.
Blogs: Trust, estate/probate, power of attorney, conservatorship, elder and dependent adult abuse, nursing home and care, disability, discrimination, personal injury, responsibilities and rights, and other related litigation, and contentious administrations http://californiaestatetrust.com; Business, D&O, board, director, audit committee, shareholder, founder, owner, and investor litigation, governance, responsibilities and rights, compliance, investigations, and risk management http://auditcommitteeupdate.com
My law practice primarily involves the following areas and issues:
Probate Court Disputes and Litigation
- Trust and estate disputes and litigation, and contentious administrations representing fiduciaries and beneficiaries; elder abuse; power of attorney disputes; elder care and nursing home abuse; conservatorships; claims to real and personal property; and other related disputes and litigation.
Business and Business-Related Disputes and Litigation: Private, Closely Held, and Family Businesses; Public Companies; and Nonprofit Entities
- Business v. business disputes including breach of contract; unlawful, unfair and fraudulent business practices; fraud, deceit and misrepresentation; unfair competition; licensing agreements, breach of the covenant of good faith and fair dealing; etc.
- Misappropriation of trade secrets
- M&A disputes
- Founder, officer, director and board, investor, shareholder, creditor, VC, control, governance, decision making, fiduciary duty, conflict of interest, independence, voting, etc., disputes
- Buy-sell disputes
- Funding and share dilution disputes
- Accounting, lost profits, and royalty disputes and damages
- Access to corporate and business records disputes
- Employee, employer and workplace disputes and processes, discrimination, whistleblower and retaliation, harassment, defamation, etc.
Investigations and Governance
- Corporate and business internal investigations
- Board, audit committee and special committee governance and processes, disputes, conflicts of interest, independence, culture, ethics, etc.
The following are copies of the tables of contents of three of the more formal materials that I have written over the years about accounting/auditing, audit committees, and related legal topics – Accounting and Its Legal Implications was my first formal effort, which resulted in a published book that had more of an accounting and auditing focus; Chapter 5A, Audit Committee Functions and Responsibilities, for the California Continuing Education of the Bar has a more legal focus; and the most recent Tate’s Excellent Audit Committee Guide (February 2017) also has a more legal focus:
The following are other summary materials that you might find useful:
From a prior blog post which you can find at https://wp.me/p75iWX-dk if the below scan is too difficult to read:
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