Gaynor v. Bulen ( 2018 )

Filed 1/23/18
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
DOROTHY W. GAYNOR et al, D070907
Plaintiffs and Respondents,
v. (Super. Ct. No. PN16579)
JAMES A. BULEN,
Defendant and Appellant.
APPEAL from an order of the Superior Court of San Diego County, Julia C.
Kelety, Judge. Affirmed.
Procopio, Cory, Hargreaves & Savitch, Kendra J. Hall, Richard A. Heller and
Mary V. Cataldo for Defendant and Appellant.
Witham Mahoney & Abbott, Daniel W. Abbott, Stephen D. Blea; Law Office of
James J. Moneer and James J. Moneer for Plaintiffs and Respondents.
Appellant James Bulen (James) and respondents (the Gaynor beneficiaries)1 are
extended family members who are cobeneficiaries of a trust (Trust) created by their
1 Respondents are: Dorothy Gaynor, James Wilmot, Michelle Gaynor, and Max
Gaynor.
grandfather or great-grandfather (Grandfather). Years after Grandfather's death, these
individuals and others engaged in contentious disputes over the management and control
of the Trust.
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Gaynor beneficiaries sought reimbursement of all funds improperly withdrawn from the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 claims against him under California's anti-SLAPP
statute. (Code Civ. Proc., § 425.16 (§ 425.16).) The probate court found the claims were
2
not governed by the anti-SLAPP statute and denied the motion. James appeals. We
affirm.
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) 2 Cal.5th 1057,
1062-1073 (Park).) Although the surcharge petition includes allegations that James
engaged in constitutionally-protected activity (his actions in the prior probate litigation),
James did not meet his burden to show the claims against him arose from this litigation
activity. James's involvement in the prior probate litigation constituted evidence of his
alleged breaches of loyalty, i.e. his alleged formulation of a plan to benefit himself to the
detriment of the Gaynor beneficiaries and the alleged improper use of trust assets to
implement that plan. Without more, a trustee's breach of loyalty, including the use or
misuse of trust funds, is not constitutionally protected. Thus, the probate court properly
denied James's anti-SLAPP motion without reaching the probability-of-prevailing issue.
FACTUAL AND PROCEDURAL SUMMARY2
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
2 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, 2 Cal.5th at p. 1067). We use first names to avoid confusion in identifying family
members.
3
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 was distributed only to the senior class, or generation,
of beneficiaries. The successor trustees and James were members of this senior
generation.
4
Shopping Center Property Ownership
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"
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members out of the 46 beneficiaries) to vote for successor trustees.3 Under this proposal,
the Cotrustees would have the authority to decide the beneficiaries who would have
voting authority and thus to control how the distributions would be made.
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 with James' advice and assistance)
opposed this petition, requesting that the beneficiaries be allowed to " 'elect' " the initial
corporate trustee, and proposed a fiduciary entity that was allegedly unqualified and
allegedly would favor the senior beneficiaries. The Gaynor beneficiaries opposed this
proposal, arguing it was asserted solely to perpetuate the " 'senior-generation-only' "
income distribution policy, which benefited the Cotrustees and James to the detriment of
the younger beneficiaries.
3 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."
6
The court then asked the Cotrustees to file a petition for instructions to permit the
court to rule on these issues. In the responding petition (Petition to Construe), the
Cotrustees (allegedly with James's advice and assistance) asked the court to: (1) approve
the election of their proposed fiduciary as the successor trustee; (2) waive or eliminate the
$20 million minimum net worth requirement for corporate trustees; and (3) provide the
trustees with " 'virtually unlimited discretion' " to distribute income. The Gaynor
beneficiaries opposed these requests.
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
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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 dollars distributed 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) (nonpub. opn.) (Gaynor I).) We held the court acted within its equitable
discretion in awarding fees to the Gaynor beneficiaries under the common fund doctrine.
(Ibid.)
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.
The Current Petition
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.
8
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.4 The Gaynor beneficiaries alleged correspondence
produced by James's former law firm (DLA Piper) in November 2014 through March
2015 alerted them for the first time that James had "assum[ed] authority over Trust assets
. . . by intermeddling in the [Cotrustees'] duties, by participating in communications and
decisions with the [Cotrustees], and by making decisions on behalf of or in place of one
or more of the [Cotrustees]."
The legal basis for the Second Amended Petition was a single breach of fiduciary
duty cause of action, in which the Gaynor beneficiaries identified about 25 separate
breaches committed by the Cotrustees (with James's alleged advice and assistance). Each
of the alleged breaches concerned the Cotrustees' and James's actions taken to benefit
themselves to the detriment of the remaining beneficiaries. The alleged breaches fell into
five main categories: (1) income distribution decisions (e.g., distributing income only to
the senior generation; failing to inform beneficiaries of their right to receive income;
4 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) 178 Cal. App. 4th 1488, 1504-1506.) For ease of reference, we
will refer to this status as a "de facto trustee." Although James was a licensed attorney,
the de facto trustee allegations are based on his role as an unofficial advisor to the other
trustees and not as an attorney.
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.
9
failing to distribute assets to Mary's son, who was in ill health; improperly delegating
distribution decisions to Catherine); (2) conduct pertaining to the Shopping Center LLC
(e.g., improperly transferring the main Trust asset (shopping center lease) into this entity;
wrongfully arranging for Mary to assign her shares to Catherine); (3) alleged failures to
provide Trust accountings; (4) alleged actions to hide Mary's mental incompetence from
Mary's family and continuing to have Mary sign pleadings "to avoid a [trustee] vacancy
in the Mary Bulen branch" and/or to replace Mary under the 1990 Plan; and (5) proposing
and seeking the adoption of the new trustee succession plan that would benefit only the
Cotrustees and the senior generation beneficiaries. As will be discussed in more detail
below, this latter category included allegations that in seeking the adoption of this new
plan, the Cotrustees and James "wast[ed] Trust assets" on attorney fees and costs to file,
support, and/or defend the Petition to Modify, the Petition to Appoint, the Petition to
Construe, the mediation efforts, and the attorney fees petition.
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 them to
reimburse the Trust for the legal fees and costs "wasted by them, and the damages caused
by them, as a result of the foregoing breaches," including for the legal fees and costs
incurred by the Trust in the prior litigation and in preparing and implementing the LLC
operating agreement; the Trust's lost value in connection with the Shopping Center LLC;
and the improper distributions to senior-generation family members. The Gaynor
beneficiaries acknowledged the Trust had reimbursed them for most of their own
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litigation-related fees and costs (pursuant to the prior court order), but they sought certain
additional costs/fees, consisting of: (1) $40,000 incurred to defend the Gaynor I appeal;
and (2) $33,045 in attorney fees that were not part of the earlier award because the court
found these fees were not incurred to benefit the beneficiary class.
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.
Anti-SLAPP Motion
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.
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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,5 but also found "James's involvement in litigation adverse to [the
Gaynor beneficiaries] [was] 'mere evidence' of his alleged breach of the fiduciary duties
owed to [the Gaynor beneficiaries]" and thus the claims against him did not arise from his
constitutionally-protected actions. The court found "persuasive" the Gaynor
5 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) 1 Cal.5th 376, 394-395 (Baral).)
12
beneficiaries' argument "that an analogy can be made between allegations of breaches of
fiduciary duties by trustees and California authority pertaining to attorney malpractice,"
stating " ' "California courts have held that when a claim [by a client against a lawyer] is
based on a breach of the fiduciary duty of loyalty or negligence, it does not concern a
right of petition or free speech, though those activities arose from the filing, prosecution
of and statements made in the course of the client's lawsuit. The reason is that the lawsuit
concerns a breach of duty that does not depend on the exercise of a constitutional
right." ' "
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, 1 Cal.5th at p. 384, italics omitted.)
The statute seeks " 'to encourage participation in matters of public significance and
prevent meritless litigation designed to chill the exercise of First Amendment rights.
[Citation.] The Legislature has declared that the statute must be "construed broadly" to
that end.' " (Hawran v. Hixson (2012) 209 Cal. App. 4th 256, 268.) "The point . . . is that
you have a right not to be dragged through the courts because you exercised your
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constitutional rights." (People ex rel Lockyer v. Brar (2004) 115 Cal. App. 4th 1315,
1317.)
"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, 1 Cal.5th at p. 384.) We conduct a de novo review of a trial court's order denying
an anti-SLAPP motion. (Park, supra, 2 Cal.5th at p. 1067.) We therefore analyze the
issues independent of the trial court's reasoning. (Ibid.) "If the trial court's decision is
correct on any theory . . . , we affirm the order regardless of the correctness of the
grounds on which the lower court reached its conclusion." (Robles v. Chalilpoyil (2010)
181 Cal. App. 4th 566, 573.)
II. First Step: "Arising From" Requirement
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" the protected activity. (Baral, supra, 1 Cal.5th at p. 396, italics
added; accord Park, supra, 2 Cal.5th at pp. 1061, 1062-1063.)
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
14
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) 1 Cal.5th 409, 422.)
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) 29 Cal. 4th 69, 78.) "[T]he mere fact
that an action was filed after protected activity took place does not mean the action arose
from that activity for the purposes of the anti-SLAPP statute." (Navellier v. Sletten
(2002) 29 Cal. 4th 82, 89 (Navellier).) Instead, the focus is on determining what "the
defendant's activity [is] that gives rise to his or her asserted liability—and whether that
activity constitutes protected speech or petitioning." (Id. at p. 92; accord Cotati, at p. 78.)
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.) The high court explained: " 'The only means specified in section
425.16 by which a moving defendant can satisfy the ["arising from"] requirement is to
demonstrate that the defendant's conduct by which plaintiff claims to have been injured
falls within one of the four categories described in subdivision (e). . . .' " (Id. at p. 1063.)
15
The Park court thus instructed that "in ruling on an anti-SLAPP motion, courts should
consider the elements of the challenged claim and what actions by the defendant supply
those elements and consequently form the basis for liability." (Ibid.) In so doing, the
courts should be "attuned to and . . . respect the distinction between activities that form
the basis for a claim and those that merely lead to the liability-creating activity or provide
evidentiary support for the claim." (Id. at p. 1064, italics added; accord, Graffiti
Protective Coatings, Inc. v. City of Pico Rivera (2010) 181 Cal. App. 4th 1207, 1214-
1215.)
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, supra, 2 Cal.5th at pp. 1067-
1073.) The high court reasoned that the plaintiff's allegation of protected
communications was insufficient to establish the plaintiff's discrimination claim arose
from the protected activity. (Id. at pp. 1067-1068.) The court stated: "The elements of
[the plaintiff's] claim . . . depend . . . only on the denial of tenure itself and whether the
motive for that action was impermissible. . . . The dean's alleged comments may supply
evidence of animus, but that does not convert the statements themselves into the basis for
liability. . . . [The plaintiff's] complaint is 'based on the act of denying plaintiff tenure
based on national origin. Plaintiff could have omitted allegations regarding
communicative acts or filing a grievance and still state the same [discrimination]
claims.' " (Id. at p. 1068, italics added.) In this analysis, the court suggested that if the
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same facts had been alleged in support of a defamation claim, the result might have been
different because that claim would have been " 'based squarely on a privileged
communication.' " (Id. at p. 1064, 1068-1071.)
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.) In defining a claim properly subject to a motion to strike, the
Baral court stated the Legislature "had in mind allegations of protected activity that are
asserted as grounds for relief. The targeted claim must amount to a 'cause of action' in
the sense that it is alleged to justify a remedy." (Id. at p. 395.)
B. Analysis
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
17
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 [anti-SLAPP statute triggered when relief is
sought based on a claim alleging protected activity, even if relief is also sought based on
alleged unprotected activity].) Specifically, in these paragraphs, the Gaynor beneficiaries
alleged that the Cotrustees and James violated their statutory duties of loyalty and fair
treatment by "wasting Trust assets" on legal fees and costs to pursue the Petition to
Modify, Petition to Appoint, Petition to Construe Trust, and the mediation; and
wrongfully forced the Gaynor beneficiaries to spend funds to oppose/defend these
petitions and activities. James argues the allegations that Trust assets were "wast[ed]" on
probate litigation constitute claims he engaged in constitutionally protected activity and
thus entitles him to anti-SLAPP protection.
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, 1 Cal.5th at p.
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395, italics omitted.) The allegations asserted as grounds for relief against James were
predicated on his taking actions to favor himself to the detriment of the Gaynor
beneficiaries. There is nothing in the Baral decision suggesting the high court envisioned
so narrowly parsing the allegations of a complaint to trigger anti-SLAPP protection based
solely on illustrations of alleged disloyal conduct by a fiduciary.
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) 241 Cal. App. 4th 861, 872; Castleman v. Sagaser (2013) 216 Cal. App. 4th 481,
491 (Castleman); People ex rel. Fire Ins. Exchange v. Anapol (2012) 211 Cal. App. 4th
809, 823-824.) But the Gaynor beneficiaries' breach of fiduciary claim was not based on
these protected activities. According to the allegations of the Second Amended Petition
and the submitted evidence, the Cotrustees (with James's advice and assistance) filed the
prior probate petitions and motions as part of their plan to change the trustee succession
rules to allow the Cotrustees to operate and control the Trust to advantage a select portion
of the beneficiaries. Thus, the activity giving rise to the Gaynor beneficiaries' alleged
harm was the breach of loyalty in formulating and pursuing this plan and the improper
use of Trust assets to wrongfully benefit James and the Cotrustees. Although the alleged
breach of loyalty may have been carried out by the filing of probate petitions, it was not
the petitioning activity itself that is the basis for the breach of fiduciary claim. (See Park,
supra, 2 Cal.5th at p. 1066 ["while [the alleged wrongful conduct] may be carried out by
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means of [protected] speech . . . , [this] circumstance [does not] transform[ ] [the] suit to
one arising from speech"].) The litigation activities (e.g., the filing and/or defense of the
Petitions to Modify, Appoint, and Construe) would provide evidence of the alleged
breaches of fiduciary duty, but the filing of these petitions were not necessary to establish
this portion of the breach of fiduciary duty claim. (See id. at p. 1068.)
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 to competently represent the client's interests and/or the attorney's
breach of loyalty owed to the client, and not to recover for injuries resulting from the
attorney's petitioning activities, even if these activities were alleged to be wrongful and
harmful to the client's interests. (See Loanvest I, LLC v. Utrecht (2015) 235 Cal. App. 4th
496, 505 [the "fact that the complaint 'focus[es] specifically on particular statements or
positions taken in connection with matters under review by a court,' . . . does not alter the
fact that the claim is . . . based on the alleged breach of loyalty owed to" the plaintiff];
Castleman, supra, 216 Cal.App.4th at pp. 494, 490-496 ["[a]lthough protected speech
and petitioning are part of the 'evidentiary landscape' within which the action arose, the
claims are ultimately based on the allegation that [the attorney] engaged in conduct
inconsistent with the fiduciary obligations he owed to the respondents"]; Benasra v.
Mitchell Silberberg & Knupp LLP (2004) 123 Cal. App. 4th 1179, 1189 ["claim is not
based on 'filing a petition for arbitration on behalf of one client against another, but
20
rather, for failing to maintain loyalty to, and the confidences of, a client' "]; see also
Chodos v. Cole (2012) 210 Cal. App. 4th 692, 702-703; Aguilar v. Goldstein (2012) 207
Cal. App. 4th 1152, 1160-1163; Freeman v. Schack (2007) 154 Cal. App. 4th 719, 727-730;
Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal. App. 4th 1532, 1536-1540.)
Similarly, here the Gaynor beneficiaries are suing James because he allegedly breached
his duties of loyalty and fair treatment, and not because he exercised his petitioning
rights.
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) 31 Cal. 4th 728, 735 [malicious prosecution claim
triggers anti-SLAPP protection].) But the gist of the Gaynor beneficiaries' claims
challenging James's litigation activities is the breach of loyalty owed to the Trust
beneficiaries and the subsequent loss of the funds alleged to have been wrongfully
withdrawn from the Trust. The Gaynor beneficiaries allege injury to the Trust and seek
to surcharge James by requiring him to repay the Trust for the costs to fund the petitions
(including the Gaynor beneficiaries' attorney fees that were ordered paid by the Trust).
The wrongful conduct that produced this injury was not the litigation itself; instead the
injury was the result of James's formulation and advocacy of the plan to maintain control
of the Trust to the detriment of other beneficiaries and the withdrawal of Trust funds for
21
this purpose. The fact that the Cotrustees and James made the decision to, and did, file
petitions in court to achieve their alleged improper objectives does not mean the Second
Amended Petition, or a claim within the petition, was based on ("arose from") the filing
of these petitions.
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), the Park court clarified that in evaluating
the "arising from" requirement, a court "should consider the elements of the challenged
claim" to determine "what actions by the defendant supply those elements and
consequently form the basis for liability." (Park, supra, 2 Cal.5th at p. 1063, italics
added.) Here, the Gaynor beneficiaries' breach of fiduciary duty claim is expressly based
on statutes requiring a trustee to administer a trust according to the trust instrument (Prob.
Code, § 16000); solely in the interest of the beneficiaries (id., § 16002); in an impartial
manner (id., § 16003); without a conflict of interest (id., § 16004); to control and preserve
trust property (id., § 16006); to make trust property productive (id., § 16007); and to
reasonably prevent losses to Trust assets (id., § 16011). As alleged in the Second
Amended Petition, James violated these statutes by formulating and advocating a plan
that would disadvantage the Gaynor beneficiaries' interests and by implementing the plan
through the withdrawal of Trust assets. The fact that the assets were then used for
various alleged improper purposes, including to fund the probate litigation, provides
evidence to support the claim for breach of these code sections, but is not an essential
element of the claim.
22
A recent Court of Appeal decision illustrates these principles. (Greco v. Greco
(2016) 2 Cal.App.5th 810 (Greco).) In Greco, a beneficiary of her deceased parents' trust
and estates sued her brother in civil court for elder abuse, and in probate court for
breaches of fiduciary duty. (Id. at pp. 816-817.) In both actions, the sister alleged the
brother (as the trustee of the trust and executor of the estates) filed litigation against her
in bad faith and for improper reasons, and wrongfully used trust and estate funds for these
purposes. (Ibid.) Similar to here, she alleged the brother breached the " 'duty to act with
utmost good faith . . . , the duty of loyalty . . . , the duty to treat all beneficiaries
equally . . . , the duty to act according to the Trust and Estates documents, the duty to
avoid self-dealing . . . , and the duty to avoid conflicts of interest.' " (Ibid.) In the breach
of fiduciary duty claim, the sister alleged her brother " 'engaged in a course of conduct
. . . fomenting litigation and other wrongful acts, against . . . beneficiaries of the Trust
and/or estate, in an attempt to disinherit them . . . and/or prevent questioning of his
actions.' " (Id. at p. 817.) The brother responded by filing anti-SLAPP motions,
contending the sister's claims "arose from actions and communications in the underlying
litigation and therefore were protected activity." (Id. at p. 818.) The sister countered that
"the gravamen of the [claims] was that by taking money to pursue his personal vendetta,
[the brother] wrongfully took money in breach of his fiduciary duties." (Ibid.)
Supporting declarations showed the brother withdrew substantial funds from the trust and
estates to fund the underlying litigation. (Ibid.)
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
23
Cal.App.5th at pp. 818-819, 821-825.) On the elder abuse claim, the court determined
that "it was [the brother's] withdrawal of the funds from the trust and estates that was the
alleged wrongful act . . . . Although [the sister] did allege the underlying lawsuits were
wrongful, her claim for recovery was not based on the wrongful act of pursuing meritless
or wasteful litigation, but on taking trust and estate funds." (Id. at p. 823.) The court
explained: "Funding the litigation solely to pursue a vendetta was the reason the activity
(i.e., the taking) was allegedly wrongful . . . . The test under section 425.16 focuses on
. . . 'the defendant's activity that gives rise to his or her asserted liability—and whether
that activity constitutes protected speech or petitioning.' [Citation.] [¶] The taking,
whether or not it is actually wrongful and why, does not fall within any of the conduct
described in subdivision (e) of section 425.16." (Id. at pp. 823-824.)
The Greco court applied similar reasoning on the breach of fiduciary duty claims.
(Greco, supra, 2 Cal.App.5th at pp. 824-825; id. at p. 825 ["For the same reasons we
detailed . . . in our discussion of the elder abuse claims, the court did not err in denying
the" SLAPP motion on the breach of fiduciary cause of action.].) The court also
observed that "[w]hile [the breach of fiduciary duty] allegations appear to challenge the
bringing of the underlying litigation, a protected activity, the [sister's claim] limits the act
that caused injury to the taking. In seeking damages and penalties, the [sister's] petition
alleges that [the brother] 'in bad faith wrongfully took, and/or concealed, and/or disposed
of, property belonging to a principal under a power of attorney' and 'in bad faith
wrongfully took, and/or concealed, and/or disposed of, property belonging to a trust
and/or estate(s).' There is no allegation that the 'fomenting litigation' or the alleged
24
attempt to disinherit certain beneficiaries caused any injury; the only 'wrongful injurious
act(s) alleged by the plaintiff' [citation] is the taking. Thus, the gravamen of this cause of
action for purposes of section 425.16 is the taking itself, not the reason for the taking
which is alleged to have made the taking wrongful." (Id. at p. 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.) We have reached a similar conclusion here. The alleged injury-
producing conduct was not James's litigation activities, but the formulation of a plan to
disadvantage the junior beneficiaries' interests and the withdrawal of funds for a purpose
that was allegedly inconsistent with these beneficiaries' interests and Grandfather's intent.
The litigation is evidence of the breach of loyalty, but not the basis of the claim.6
James argues that in this case, unlike in Greco, the Gaynor beneficiaries sought
certain damages resulting from the prior probate litigation: (1) the $40,000 in attorney
fees incurred in defending the Gaynor I appeal; and (2) the $33,045 in attorney fees the
probate court declined to award in the prior litigation based on its finding that these fees
were not incurred to benefit the entire class of beneficiaries. These damage allegations
6 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, 2 Cal.App.5th at p. 825.) This holding is not
helpful to James because in this case the Gaynor beneficiaries do not seek to recover for
harm resulting from any alleged misrepresentations.
25
do not take this case outside Greco's rationale because the anti-SLAPP statute's focus is
on the defendant's alleged injurious speech or conduct, "rather than the damage which
flows from said conduct." (Renewable Resources Coalition, Inc. v. Pebble Mines Corp.
(2013) 218 Cal. App. 4th 384, 396.) Moreover, these damage allegations are incidental to
the Gaynor beneficiaries' legal claim at issue and thus do not independently trigger anti-
SLAPP protection. (See Baral, supra, 1 Cal.5th at p. 394 [reiterating that "[a]ssertions
that are 'merely incidental' . . . are not subject to section 425.16"].) First, as to the
$40,000 incurred in defending the Gaynor I appeal, these funds were recoverable under
the probate court's prior order (affirmed on appeal) permitting recovery of the Gaynor
beneficiaries' attorney fees on a common fund theory. (Gaynor I, supra, D064872.)
With respect to the second category of claimed fees, the probate court has already found
they are not recoverable because they did not benefit the class of beneficiaries. (Ibid.)
Although we do not reach the merits in the first step of the anti-SLAPP analysis, we can
properly consider the undisputed facts in determining whether the claim arose from
protected activity.
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.) Because Baral was not directly relevant to the
issues raised in Greco, this criticism of Greco is unavailing.
26
James devotes much of his reply brief to discussing a Court of Appeal decision,
Sheley v. Harrop (2017) 9 Cal.App.5th 1147 (Sheley), filed about seven months after
Greco. Sheley held the anti-SLAPP statute applied to breach of fiduciary duty claims
involving alleged wrongful litigation by a corporation's controlling members. (Id. at pp.
1165-1170.) Although Sheley and Greco were both decided by the Third District Court
of Appeal, and involved similar issues, Sheley did not cite or discuss Greco.
In Sheley, the decedent had owned all of the shares of a corporation. (Sheley,
supra, 9 Cal.App.5th at p. 1154.) After he died, his second wife owned 25 percent of the
shares and his two adult daughters from his first marriage owned the remaining 75
percent. (Ibid.) When the daughters assumed control of the corporation, the corporation
sued the second wife. (Id. at pp. 1154-1155.) The second wife then filed a cross-
complaint against the daughters, asserting three causes of action: (1) breach of fiduciary
duty, alleging the daughters breached duties by " 'paying themselves excessive salaries,
by wrongfully converting corporate assets, by filing and maintaining a frivolous lawsuit
against [her], and by failing to make pro-rata disbursements to [her] as a minority
shareholder of the corporation' "; (2) conversion, alleging the daughters " 'willfully,
intentionally and wrongfully converted corporate assets . . . to their own use by, among
other things, paying themselves excessive salaries, making disbursements [only] to
themselves . . . , and by wrongfully utilizing corporate assets to fund the above-captioned
frivolous lawsuit brought in bad faith against [the second wife]' "; and (3) negligence,
alleging the daughters " 'fail[ed] to make timely disbursements to [her] as a minority
shareholder . . . , wrongfully depleting and wasting corporate assets to fund the instant
27
litigation against [her] without any reasonable justification, and by paying themselves
excessive salaries as officers . . . , thereby further wasting corporate assets.' " (Id. at p.
1155.)
The daughters moved to strike the cross-complaint under the anti-SLAPP statute,
arguing the allegations relating to filing and maintaining the prior lawsuit constituted
"protected activities." (Sheley, supra, 9 Cal.App.5th at pp. 1155-1156.) The trial court
denied the motion. (Id. at p. 1159.) In reversing, the Sheley court first discussed its
finding that the litigation-related allegations constituted a "claim" subject to the anti-
SLAPP statute under the recent Baral "mixed" cause of action decision. (Sheley, at pp.
1165-1170.) The court then found the litigation allegations arose from protected activity,
reasoning these allegations were not "incidental" to the second wife's claimed injuries,
and did not merely "provide context" for the claims. (Id. at p. 1167.) In reaching these
conclusions, the Sheley court declined to follow Baharian-Mehr v. Smith (2010) 189
Cal. App. 4th 265, which held a plaintiff's claims against his corporate partners for
activities related to the hiring of attorneys and filing a lawsuit were not subject to anti-
SLAPP protection because "the gravamen of [the plaintiff's] complaint is not that [the
defendant's] petitioning activity caused him harm, but that his wasteful and unnecessary
spending on attorneys and investigators did." (Baharian-Mehr, at p. 273.) The Sheley
court criticized Baharian-Mehr's reasoning based on the Sheley court's view that the
"primary thrust" or "gravamen" approach to evaluating anti-SLAPP motions is no longer
viable after Baral, supra, 1 Cal.5th 376. (Sheley, at p. 1169.)
28
We find Sheley's analysis unpersuasive on the "arising from" element. (§ 425.16,
subd. (b).) Sheley was decided before Park, and did not have the benefit of Park's clear
admonitions regarding the need to identify the specific elements of the claim relied upon
by the defendant to invoke the anti-SLAPP statute. (Park, supra, 2 Cal.5th at pp. 1062-
1073.) Under Park, the allegations of wrongful litigation in Sheley arguably did not form
the basis for the claims, and instead were examples of the claimed breach of duties.
Additionally, we have some concern with Sheley's criticism of the "primary thrust" or
gravamen" analysis. The "principal thrust" or "gravamen" is a shorthand way of
describing the need to show—with respect to each targeted claim—that the alleged
wrongful and injury-producing conduct was not incidental and fell within one of the four
categories enumerated in section 426.16, subdivision (e). (See Castleman, supra, 216
Cal.App.4th at pp. 490-492.) This form of analysis is consistent with recent California
Supreme Court authority. In Baral, the high court held that claims (rather than technical
"causes of action") may be subject to a strike motion, but reiterated that the statute is not
triggered by " 'incidental' " allegations. (Baral, supra, 1 Cal.5th at pp. 394-395.) Park
reaffirmed the defendant's burden to establish a nexus between the protected act and the
core basis for the alleged injury. (Park, supra, 2 Cal.5th at pp. 1062-1064.) Thus, under
Park and Baral, a court must continue to analyze whether the allegations of protected
activity within each "claim" are incidental or whether the principal thrust of the claim
triggers anti-SLAPP protection. (See Okorie v. Los Angeles Unified School Dist. (2017)
14 Cal.App.5th 574, 588-590 [rejecting Sheley's view on anti-SLAPP "gravamen"
analysis].)
29
Citing our recent decision in San Diegans for Open Government v. San Diego
State University Research Foundation (2017) 13 Cal.App.5th 76 (San Diegans), James
argues the funding of litigation is "clearly protected conduct."7 In the cited portion of the
opinion, the court was referring to section 425.16, subdivision (e)(4), which is not at issue
here. (San Diegans, at pp. 93-94.) James also cites Tuszynska v. Cunningham (2011)
199 Cal. App. 4th 257, a gender discrimination case, for the proposition that litigation
funding " 'decisions' " are protected communications under section 425.16, subdivision
(e)(2). However, the Park court disapproved of Tuszynska to the extent it held the
plaintiff's claims arose from communications rather than from the alleged discriminatory
actions. (Park, supra, 2 Cal.5th at p. 1071.)
Even assuming the funding of litigation is an act protected under section 425.16,
subdivision (e)(2), the fact that the Gaynor beneficiaries challenged James's involvement
in the funding of the probate litigation does not alter our conclusions. The critical point
is that even assuming James allegedly engaged in protected activities by his litigation
actions, he still has the burden to show the Gaynor beneficiaries' breach of fiduciary
claim arose from these activities. We have concluded he did not make this showing.
Also relying on San Diegans, supra, 13 Cal.App.5th 76, James argues the trial
court failed to distinguish " 'allegations of conduct on which liability is based from
allegations of motives for such conduct.' " We agree these two concepts must be
7 After briefing was completed, the California Supreme Court granted a petition for
review in the San Diegans case. (San Diegans, supra, 13 Cal.App.5th 76, review granted
Aug. 16, 2017, S242529.)
30
distinguished, and that the anti-SLAPP statute is triggered only when the alleged injury-
producing conduct is protected activity, not merely the motivating conduct for that
activity. But we disagree with James that the allegations of breach of loyalty and self-
dealing constituted only the motive for the protected conduct (filing of the lawsuits).
James is describing a malicious prosecution claim, which the Gaynor beneficiaries did
not assert. The allegations of breach of loyalty and self-dealing (the improper use of
Trust assets on matters detrimental to the beneficiaries) is the alleged injury-producing
conduct, and the filing of the lawsuits is evidence to show the breach and the resulting
harm to the beneficiaries.
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, 2 Cal.5th at p. 1067.) Similar
concerns arise in analyzing a probate petition challenging a fiduciary's actions that
allegedly improperly depleted trust assets. Holding that a trust beneficiary's surcharge
petition is subject to an anti-SLAPP petition whenever a beneficiary challenges the
trustee's use of trust assets to fund self-serving litigation would significantly deter
beneficiaries from bringing such actions. If a fiduciary could strike breach of duty claims
at the pleading stage before discovery and subject the beneficiaries to attorney fee
awards, this would substantially burden a beneficiary's constitutional petition rights and
undermine the Probate Code protections for beneficiaries, thereby reducing the probate
court's ability to monitor trustee activities. Park instructed the courts to look closely at
31
the allegations of the pleading when ruling on an anti-SLAPP motion, and to "respect the
distinction" between protected activity that provides the basis for liability and protected
activity that provides evidence of liability. (Park, at p. 1064.) Here, the allegations of
protected activity do not form the basis for liability.
DISPOSITION
Order affirmed. Appellant to bear respondents' costs on appeal.
HALLER, J.
WE CONCUR:
BENKE, Acting P. J.
DATO, J.
32