Key v. Tyler ( 2024 )

Filed 5/28/24
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
SARAH PLOTT KEY, B322246
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BP131447)
v.
ELIZABETH PLOTT TYLER et al.,
Defendants and Respondents.
APPEAL from an order of the Superior Court of Los
Angeles County. Daniel Juarez, Judge. Reversed and remanded
with directions.
Oldman, Sallus & Gold, Mary-Felicia Apanius, Marshal A.
Oldman; Wershow & Cole and Jonathan A. Wershow for Plaintiff
and Appellant.
Magee & Adler, Eric R. Adler; Murphy Rosen, Paul D.
Murphy and Daniel N. Csillag for Defendant and Respondent
Elizabeth Plott Tyler.
Greenberg Glusker Fields Claman & Machtinger and Marc
M. Stern for Respondents William O. Gamble III and James W.
Sullivan.
Sarah Plott Key (Key) appeals from an order denying a
petition she filed in probate court to disinherit her sister,
Elizabeth Plott Tyler (Tyler). The petition sought to enforce a “no
contest” clause in a 1999 trust established by the sisters’ parents,
Thomas E. Plott (Thomas) and Elizabeth R. Plott (Elizabeth).1
This case has a lengthy appellate history. There have been
three prior appeals of orders concerning the same 1999 trust.2
Indeed, this is the second time we have considered the same
petition that is at issue in this appeal. In Key v. Tyler II we
reversed the probate court’s order striking Key’s petition under
the anti-SLAPP statute (Code Civ. Proc., § 425.16). We held that:
(1) the anti-SLAPP statute applies to a petition to enforce a no
contest clause; and (2) Key adequately demonstrated a likelihood
of success on her petition. With respect to this second point, we
concluded that Tyler’s judicial defense of the 2007 Amendment
that she had procured through undue influence constituted a
1 Several different trust provisions are at issue in this
appeal. We use the general term “Trust” to refer to the entire
trust that Thomas and Elizabeth created, including an
amendment that they executed in 2003. We refer to that
amendment as the “2003 Amendment,” and we refer to the Trust
as it existed prior to that amendment as the “Original Trust.”
We use the term “2007 Amendment” to refer to the purported
amendment that Elizabeth executed in 2007 and that prior
proceedings in this case have established Tyler procured through
undue influence.
2 Those three prior appeals are Key v. Tyler (June 27, 2016,
B258055, mod. June 29, 2016) [nonpub. opn.] (Key v. Tyler I); Key
v. Tyler (2019) 34 Cal.App.5th 505 (Key v. Tyler II); and Key v.
Tyler (Aug. 30, 2021, B298739, mod. Aug. 31, 2021) [nonpub.
opn.].
2
direct contest of the Trust. We also concluded that Key had
provided sufficient evidence that Tyler lacked probable cause to
defend that amendment in court. (Key v. Tyler II, supra, 34
Cal.App.5th at p. 510.)
On remand from that appeal, Tyler raised a new issue:
whether the lack of a no contest clause in the 2003 Amendment
that the parents executed to change the distribution of the
Trust’s residue means that Tyler’s share of the assets distributed
under the terms of that amendment are exempt from forfeiture.
The trial court concluded that they were. We disagree and
therefore reverse.
Our holding rests upon the plain language of the Original
Trust’s no contest provision (the No Contest Clause) in light of a
key issue of law that is now beyond dispute. Tyler cannot, and
does not, ask us to revisit our holding in Key v. Tyler II that her
defense of the 2007 Amendment in court was a direct contest of
the Trust. Under Probate Code section 21311, such a direct
contest, if “brought without probable cause,” provides a legally
sufficient basis to enforce a no contest clause. (Prob. Code,
§ 21311, subd. (a)(1).)3 Indeed, Tyler does not dispute that her
share of personal property that is expressly specified in the
Original Trust is subject to forfeiture. She claims only that her
share of the assets that the 2003 Amendment specifies is exempt
from the consequences of her direct contest.
The claim is untenable in light of the language of the No
Contest Clause. That clause requires that, if a beneficiary
contests the Trust, the Trustors shall “disinherit” that
3 Subsequent undesignated statutory references are to the
Probate Code.
3
beneficiary, and that all interests given to that person “under this
Trust” are to be forfeited. Thus, the plain language of the No
Contest Clause requires that, if Tyler lacked probable cause to
contest the Trust, she must be disinherited. No statute limits the
scope of the forfeiture that the No Contest Clause may impose.
Tyler’s share of the Trust’s residual monetary assets is therefore
not exempt from forfeiture simply because her specific share was
specified by a subsequent amendment that does not contain a no
contest clause.
BACKGROUND
Our prior opinions discuss the background facts in detail.
We therefore only briefly summarize the key facts and the
particular Trust documents relevant to this appeal.
1. The Original Trust
Thomas and Elizabeth (together, the Trustors) created the
Original Trust in 1999. They were designated as both Trustors
and Trustees, and had the power to revoke the Trust as to their
share of the marital property during their joint lifetimes. The
Trustors had three children: Tyler; Key; and a third sister not
involved in this litigation, Jennifer Plott Potz (Potz).
Upon the death of the first trustor, the Trust estate was to
be divided into three subtrusts: (1) the Survivor’s Trust; (2) the
Marital Trust; and (3) the Exemption Trust. The Survivor’s
Trust consisted of the surviving trustor’s separate property and
the surviving trustor’s community property share of the trust
estate, along with household items. The Marital Trust was to
include the maximum permissible amount of the deceased
trustor’s estate that could pass without tax liability under the
federal marital tax deduction. The Exemption Trust included the
remainder of the Trust estate.
4
The Original Trust also created a Residual Trust, which
was created to receive assets flowing from the other three
subtrusts for distribution to the beneficiaries upon the death of
the surviving trustor.
After the first trustor’s death, the Survivor’s Trust
remained revocable, but the Marital Trust and the Exemption
Trust became irrevocable. The surviving trustor also retained
the power by will or codicil to direct the distribution of the
Survivor’s Trust upon the surviving trustor’s death. Absent such
direction, the Original Trust provided that, upon the death of the
surviving trustor, the personal effects in the Survivor’s Trust
(with the exception of a grand piano which was to be given to
Key) would be distributed in equal portions to the three children.
The remainder of the assets in the Survivor’s Trust would flow
into the Residual Trust.
The surviving trustor had the right to receive the net
income from the Marital Trust and the Exemption Trust during
the surviving trustor’s life. The surviving trustor also had the
right to change the manner in which the Trustors’ issue would
receive their shares from those sub trusts. However, the
surviving trustor could not change the amount of those shares.
Unless the surviving trustor made such a change, upon the
surviving trustor’s death the assets remaining in the Marital
Trust and the Exemption Trust were to flow into the Residual
Trust.
In Article Seven of the Original Trust, the trustors
specified the shares of the Residual Trust that the beneficiaries
were to receive from the assets flowing into that trust after the
death of the surviving trustor. Those assets were to be divided
5
and distributed in shares consisting of 50 percent to Tyler,
35 percent to Potz, and 15 percent to Key.
Article Fourteen of the Original Trust contains the No
Contest Clause. The clause provides in part that “if any devisee,
legatee or beneficiary under this Trust, or any legal heir of the
Trustors or person claiming under any of them directly or
indirectly (a) contests either Trustor’s Will, this Trust, any other
trust created by a Trustor, or in any manner attacks or seeks to
impair or invalidate any of their provisions, . . . then in that
event Trustors specifically disinherit each such person, and all
such legacies, bequests, devises, and interest given under this
Trust to that person shall be forfeited as though he or she had
predeceased the Trustors without issue, and shall augment
proportionately the shares of the Trust Estate passing under this
Trust to, or in trust for, such of Trustors’ devisees, legatees and
beneficiaries who have not participated in such acts or
proceedings.”
2. The 2003 Amendment
The 2003 Amendment, executed separately by Thomas and
Elizabeth in that year, is a one-page document that amended
Article Seven of the Original Trust governing the Residual Trust.
The 2003 Amendment changed the shares to be distributed to the
three children from the Residual Trust so that Tyler, Key, and
Potz would each receive a one-third share. The 2003 Amendment
does not contain a no contest provision.
3. The 2007 Amendment
Thomas died in 2003. Following his death, Tyler used her
influence over Elizabeth to obtain the 2007 Amendment. (Key v.
Tyler II, supra, 34 Cal.App.5th at pp. 511–512.)
6
The 2007 Amendment revised Article Four of the Original
Trust governing the Survivor’s Trust. It changed the
requirements for the distribution of property from the Survivor’s
Trust following Elizabeth’s death. (See Key v. Tyler II, supra, 34
Cal.App.5th at p. 512.)
Under the revised distribution scheme, Key was to receive
only “[a]n amount equal to the lesser of $1,000,000, or 5% of the
then Survivor’s Trust Estate less any amount owed on any
outstanding promissory note in favor of the Surviving Trustor.”
Tyler was to receive 65 percent of Elizabeth’s interest in the
family’s nursing home business entities and 50 percent of
Elizabeth’s remaining assets. Potz was to receive 35 percent of
Elizabeth’s interest in the business entities and the other
50 percent share of Elizabeth’s remaining assets. These shares
were to be distributed to Tyler and Potz through the Residual
Trust.
The 2007 Amendment also gave Tyler the Beverly Hills
home that Elizabeth owned, along with its contents.
4. Prior Proceedings
Key filed a petition to invalidate the 2007 Amendment on
the ground of undue influence. Following a trial in 2013, the
probate court granted that petition. This court affirmed the
probate court’s order in Key v. Tyler I.
Following remand from that decision, Key filed a petition to
enforce the No Contest Clause (the No Contest Petition). Tyler
responded with a motion to strike that petition under the anti-
SLAPP statute (Code Civ. Proc., § 425.16).
The probate court granted Tyler’s anti-SLAPP motion on
several grounds. As is relevant to this appeal, the court
concluded that Tyler had not directly contested the Trust because
7
she did not initiate any legal proceedings challenging the Trust,
but instead simply defended the 2007 Amendment against the
challenge that Key brought. Furthermore, the court concluded
that Key had failed to show that Tyler lacked probable cause to
defend the 2007 Amendment.
We reversed this order in Key v. Tyler II. On the issue of
whether Tyler’s defense of the 2007 Amendment constituted a
direct contest, we held that Tyler’s pleadings defending the 2007
Amendment alleged the “ ‘invalidity of a protected instrument,’ ”
and “therefore met the statutory definition of a direct contest”
under section 21310. (Key v. Tyler II, supra, 34 Cal.App.5th at
p. 524.) We also held that Key had made a sufficient showing
that Tyler lacked probable cause for her defense of the 2007
Amendment to warrant denial of Tyler’s anti-SLAPP motion.
However, we emphasized that Key’s showing did not establish
the absence of probable cause as a matter of law. (Id. at p. 539.)
We noted that the “legal standard for invalidating an instrument
based upon undue influence and the standard for finding a lack of
probable cause to believe the instrument was valid are different.”
(Ibid.) We remanded for further proceedings on Key’s No Contest
Petition. (Id. at p. 541.)
Following remand, Tyler moved to bifurcate the trial on
Key’s No Contest Petition. Tyler argued that there was a
preliminary, and potentially dispositive, issue arising from the
absence of a no contest provision in the 2003 Amendment. Tyler
claimed that the absence of such a provision means that the 2003
Amendment is not a protected instrument under section 21310,
subdivision (e), and that Tyler’s share of the assets from the
Residual Trust specified by the 2003 Amendment is therefore not
subject to forfeiture.
8
The probate court agreed and, on its own motion, denied
Key’s No Contest Petition with prejudice. The court concluded
that the 2003 Amendment is not a protected instrument because
(1) it does not itself contain a no contest provision, and (2) no
other document containing a no contest clause references the
amendment. The court rejected Key’s argument that the law of
the case doctrine foreclosed Tyler’s argument, concluding that
this court’s prior holding in Key v. Tyler II did not bind the court
“to find that the no contest clause in the original trust extends to
and subsumes the Amendment.”
The probate court’s order did not expressly address
whether Tyler’s interest in the assets distributed through the
Residual Trust is subject to forfeiture based upon her direct
contest of the Original Trust.
DISCUSSION
1. Standard of Review
The interpretation of a trust instrument is an issue of law
unless there is a conflict in extrinsic evidence. (Burch v. George
(1994) 7 Cal.4th 246, 254 (Burch).) In light of that principle, all
parties agree that this court should review the probate court’s
order de novo.
2. The Original Trust’s No Contest Clause Applies
to Assets that Tyler Would Inherit from the
Residual Trust
There is no dispute that Tyler’s defense of the 2007
Amendment in court constituted a direct contest of the Original
Trust. Our opinion in Key v. Tyler II so held. Tyler also concedes
the point, agreeing that the “Original Trust is a protected
instrument from which she could be disinherited if she did not
contest it with probable cause.”
9
Thus, the dispositive issue in this appeal is the consequence
of Tyler’s direct contest. Tyler claims that the forfeiture resulting
from her direct contest could include only her share of the assets
that is directly controlled by the body of the Original Trust. Tyler
argues that those assets are limited to her share of the personal
property identified in Article Four of the Original Trust, which
the 2007 Amendment changed. Tyler claims that she cannot be
precluded from receiving her designated portion of the financial
assets distributed through the Residual Trust because those
assets are “controlled by” the 2003 Amendment, which is not a
protected instrument.
Before discussing the merit of this argument, we consider
the effect of our prior opinion.
a. Key v. Tyler II established only the
existence of Tyler’s direct contest, not its
consequence
Key claims that the only issue left open after our opinion in
Key v. Tyler II was whether Tyler had probable cause for her
judicial defense of the 2007 Amendment. Thus, she claims, Tyler
is precluded by the law of the case doctrine from arguing now
that her share of assets controlled by the 2003 Amendment is
exempt from forfeiture. We disagree.
Under the law of the case doctrine, “ ‘[t]he decision of an
appellate court, stating a rule of law necessary to the decision of
the case, conclusively establishes that rule and makes it
determinative of the rights of the same parties in any subsequent
retrial or appeal in the same case.’ ” (Leider v. Lewis (2017) 2
Cal.5th 1121, 1127, quoting Morohoshi v. Pacific Home (2004) 34
Cal.4th 482, 491.) However, for the doctrine to apply, the prior
decision must have actually decided the point of law at issue,
10
either expressly or implicitly. (Leider, at p. 1127.) “ ‘Generally,
the doctrine of law of the case does not extend to points of law
which might have been but were not presented and determined in
the prior appeal.’ ” (Ibid., quoting Estate of Horman (1971) 5
Cal.3d 62, 73.)
The scope of the potential forfeiture resulting from Tyler’s
direct contest of the Original Trust under the language of the No
Contest Clause is an issue of law involving the interpretation of a
written instrument to which the law of the case doctrine could
apply. (Stockton Citizens for Sensible Planning v. City of
Stockton (2012) 210 Cal.App.4th 1484, 1498 [Supreme Court’s
prior construction of a city’s letter approving a project “is
obviously a question of law to which the doctrine of law of the
case applies”].) But our decision in Key v. Tyler II did not decide
that issue.
In Key v. Tyler II, we decided only that Key had provided
sufficient evidence of a probability of success on her No Contest
Petition to defeat Tyler’s anti-SLAPP motion. As mentioned, in
reaching that conclusion we also decided the legal issue that
Tyler’s defense of the 2007 Amendment in court was a direct
contest of the Original Trust. We did so because Tyler raised as a
defense to the merits of Key’s No Contest Petition that Tyler did
not initiate any judicial action challenging the trust. (Key v.
Tyler II, supra, 34 Cal.App.5th at p. 523.)
However, Tyler did not present any defense to the merits of
Key’s petition based upon the absence of a no contest clause in
the 2003 Amendment. We therefore did not decide whether the
absence of such a clause in the 2003 Amendment affected the
scope of a possible forfeiture of Tyler’s interests under the No
Contest Clause.
11
Moreover, in our prior opinion we expressly disclaimed any
intent to decide the scope of a possible forfeiture. In her
respondent’s brief in Key v. Tyler II, Tyler made the fallback
argument that, if Key’s No Contest Petition were to proceed,
Tyler’s disinheritance could not extend to subtrusts other than
the Survivor’s Trust, because that was the only subtrust affected
by the 2007 Amendment.4 We declined to consider that
argument because the issue related “to the scope of permissible
relief under Key’s No Contest Petition rather than the probate
court’s decision granting Tyler’s anti-SLAPP motion that is the
subject of this appeal.” (Key v. Tyler II, supra, 34 Cal.App.5th at
p. 541, fn. 19.)
Nor did our prior opinion decide whether the 2003
Amendment is a protected instrument. Neither Tyler nor Key
raised that issue. Moreover, it was not necessary to decide that
question to determine if Key had presented sufficient evidence to
survive Tyler’s anti-SLAPP motion.
Indeed, as discussed below, it is not necessary to decide
that issue even now. While our prior opinion did not foreclose
Tyler’s current argument about the scope of a possible forfeiture,
the absence of a no contest clause in the 2003 Amendment is not
relevant to our decision on the merits of that argument. As we
explain, Tyler’s direct contest of the provisions of the Original
Trust was sufficient to support a forfeiture even if the 2003
Amendment is a separate, unprotected instrument.
4 We previously took judicial notice of the records from the
prior appeals.
12
b. Under the language of the No Contest
Clause, Tyler’s direct contest of the
Original Trust requires forfeiture of her
inheritance if made without probable
cause
Unless limited by statute, the scope of the forfeiture
required under a trust’s no contest clause depends upon the
intent of the trustors as expressed in the language of the
instrument. (See Donkin v. Donkin (2013) 58 Cal.4th 412, 425–
426 [the current legislative scheme governing no contest clauses
incorporates the recommendation of the California Law Revision
Commission that “ ‘a no contest clause should be enforceable
unless it conflicts with public policy’ ”], quoting Recommendation:
Revision of No Contest Clause Statute (Jan. 2008) 37 Cal. Law
Revision Com. Rep. (2007) p. 391; Meiri v. Shamtoubi (2022) 81
Cal.App.5th 606, 613 [whether there has been a contest within
the meaning of a no contest clause “ ‘ “depends upon the
circumstances of the particular case and the language used” ’ ”],
quoting Burch, supra, 7 Cal.4th at pp. 254–255.) The language of
a no contest clause must be strictly construed. (§ 21312; Burch,
at p. 254.) However, “even though a no contest clause is strictly
construed to avoid forfeiture, it is the testator’s intentions that
control, and a court ‘must not rewrite the [testator’s] will in such
a way as to immunize legal proceedings plainly intended to
frustrate [the testator’s] unequivocally expressed intent from the
reach of the no-contest clause.’ ” (Burch, at p. 255, quoting Estate
of Kazian (1976) 59 Cal.App.3d 797, 802.)
Tyler contends that the assets she would inherit from the
Residual Trust are exempt from forfeiture because a separate,
unprotected instrument (the 2003 Amendment) specifies her
13
share of those assets. We therefore examine the language of the
No Contest Clause to determine if that contention is consistent
with the Trustors’ intent.
The forfeiture language in the No Contest Clause is
comprehensive. As mentioned, it requires that, in the event any
beneficiary contests “this Trust, any other Trust created by a
Trustor, or in any manner attacks or seeks to impair any of their
provisions,” the “Trustors specifically disinherit each such
person,” and all interests given “under this Trust” to that person
shall be forfeited.
The term “disinherit” is broad. Its plain meaning is that
the Trustors intended to deny any inheritance to a beneficiary
who contests the Trust. That general term is followed by the
further specific consequence that a beneficiary who contests the
Trust forfeits any interest that is “given under this Trust.”
Tyler’s interest in the assets flowing through the Residual
Trust falls within the scope of this broad forfeiture language.
The instruction that the Trustors intended to “disinherit” any
beneficiary who contests the Trust is not limited to any specific
inheritance. Tyler’s interest in assets distributed through the
Residual Trust is certainly among those that she would inherit.
But we need not decide whether this general term would be
sufficient to “disinherit” Tyler from some interest in assets
distributed through a completely different trust or through some
other instrument that is separate from the Original Trust. That
is not the case here. Tyler’s interest in assets distributed
through the Residual Trust also comes within the more specific
scope of assets that are subject to forfeiture if they are “given
under” the Original Trust.
14
The 2003 Amendment changed the percentage of assets
that each beneficiary would inherit from the Residual Trust, but
that is all that it did. It did not displace the structure of the
subsidiary trusts, nor did it change how assets would flow into
the Residual Trust. The provisions of the Original Trust that
created and governed the Survivor’s Trust, the Marital Trust,
and the Exemption Trust remained unaffected by the 2003
Amendment. Under the terms of the Original Trust, each of
those subtrusts would contribute assets to the Residual Trust.
Each of the beneficiaries was to receive her specific individual
share of the assets flowing into the Residual Trust under the
terms specified in the 2003 Amendment. But those assets were
also “given under” the overall structure of the Original Trust.
Critically, there is also nothing in the language of the No
Contest Clause suggesting that the Trustors intended to limit the
forfeiture that would result from particular kinds of contests. To
the contrary: The language of the No Contest Clause shows that
the Trustors intended for it to reach as broadly as possible in
imposing consequences for the decision to contest the Trust in
any manner. The Trustors specified that all manner of conduct
challenging the Trust would trigger the No Contest Clause,
including a contest of “either Trustors’ Will, this Trust, any other
trust created by a Trustor,” or conduct that “in any manner
attacks or seeks to impair or invalidate any of their provisions.”
Under the No Contest Clause, the consequences of each of these
challenges is the same: The challenger is to be disinherited and
must forfeit all interests she otherwise would receive “under this
Trust.” This broad language contradicts any argument that the
Trustors intended to limit the scope of a forfeiture only to the
15
specific assets controlled by the particular trust provision that a
beneficiary chooses to challenge.
Tyler points out that the forfeiture language in the No
Contest Clause does not specifically refer to a contest of a trust
amendment. However, the absence of such a specific reference
does not support the conclusion that the Trustors intended to
limit the forfeiture that would apply to Tyler’s challenge here. It
would make no sense for the Trustors to state that a beneficiary’s
contest of “any other trust created by a Trustor” (italics added)
would result in forfeiture, but not a contest of an amendment to
the same trust. In any event, what the Trustors might have
intended as a consequence for a contest directed solely against a
subsequent amendment is ultimately not the issue here. Tyler’s
contest was not limited to the 2003 Amendment. As discussed
above, there is no dispute here that Tyler also directly contested
the Original Trust itself. The relevant question is therefore
whether the Trustors intended to limit the forfeiture that would
result from such a contest only to the share of assets directly
specified in the Original Trust instrument. Nothing in the
language of the No Contest Clause supports that conclusion.
Moreover, Tyler’s contest of the Original Trust directly
affected the assets that she now argues should be exempt from
forfeiture. As we explained in Key v. Tyler II, Tyler’s defense of
the 2007 Amendment, had it been successful, would have had the
effect of revoking paragraph C of Article Four (governing the
Survivor’s Trust), “which the 2007 Amendment purported to
replace.” (Key v. Tyler II, supra, 34 Cal.App.5th at p. 524.) The
2007 Amendment would have replaced that portion of the
Survivor’s Trust with detailed instructions for the distribution of
16
the balance of the Survivor’s Trust, limiting Key’s share to
$1 million at most.
In contrast, the 2007 Amendment specified that Tyler
would receive 65 percent of the Surviving Trustor’s interest in the
Trustors’ business entities and 50 percent of the remaining
assets, and Potz would receive 35 percent of the business entities
and the other 50 percent of the remaining assets.5 Because the
Trustors’ business assets that produce revenue had all been
allocated to the Survivor’s Trust, this provision had the effect of
depriving Key of any share of the business assets (as well as any
share of the remaining assets allocated to the Survivor’s Trust).
(See Key v. Tyler II, supra, 34 Cal.App.5th at p. 512.) In short,
the 2007 Amendment cut off the flow of business assets that Key
would otherwise have inherited through the Residual Trust
before they ever reached the Residual Trust, making the one-
third share of the Residual Trust that the 2003 Amendment
allocated to Key irrelevant with respect to those assets.
This was hardly a minor change. Nor was it limited to
personal property. Rather, it affected the entirety of assets
distributed through the Survivor’s Trust, amounting to an attack
on both the Original Trust and the beneficiaries’ shares specified
in the 2003 Amendment. Indeed, Tyler concedes that the 2007
Amendment “would have altered the distribution schemes for
5 As mentioned, the 2007 Amendment instructed that the
shares of the Survivor’s Trust allocated to Tyler and Potz were to
be distributed to each through the Residual Trust. In contrast,
the effect of the 2007 Amendment was to preclude Key from
inheriting any portion of the Survivor’s Trust through her
interest in the Residual Trust.
17
both the Original Trust and the 2003 Amendment, which would
have reduced Key’s share in the survival trust to $1 million.”
This significant change amounted to the type of contest
that the Trustors clearly intended to trigger the full scope of the
forfeitures identified in the No Contest Clause. (Cf. Burch,
supra, 7 Cal.4th at pp. 260–261 [proposed litigation would have
frustrated the trustor’s intent and amounted to a contest because
it would have nullified or thwarted the “provisions in the trust
instrument that provide for the allocation of all assets placed in
the trust estate to the various subsidiary trusts”]; Estate of
Pittman (1998) 63 Cal.App.4th 290, 301 [the evident purpose of a
broad no contest clause was “to expansively prohibit any attempt
to set aside any provision of the trust”].)
c. The scope of the forfeiture that the
Trustors intended is not limited by law
Having concluded that the language of the No Contest
Clause supports forfeiture of all Tyler’s assets distributed
through the Trust, including the Residual Trust, the only
remaining issue is whether the law somehow limits the effect
that we must otherwise give to the Trustors’ intent as expressed
in that language. It does not.
The Probate Code carefully circumscribes the types of
contests that can support the enforcement of a no contest clause.
Under section 21311, a no contest clause may be enforced only
against three types of contests, including, as relevant here, a
“direct contest that is brought without probable cause.” (§ 21311,
subd. (a)(1).) As our Supreme Court has explained, this careful
definition is a result of the Legislature’s attempt to simplify and
eliminate uncertainty in the application of the law on no contest
clauses. (Donkin v. Donkin, supra, 58 Cal.4th at pp. 424–426.)
18
The current legislative scheme represents a balance between
competing policy interests. On the one hand, no contest clauses
help in respecting a transferor’s wishes and reducing conflict
among beneficiaries. On the other hand, they can restrict access
to the courts to protect important rights and, if wrongly applied,
can result in a forfeiture that the transferor did not intend.
(Ibid.)
Careful adherence to the Legislature’s definition of the
types of contests that can support the application of no contest
clauses is therefore important to respect the Legislature’s balance
of policy interests, including the desire to avoid unwarranted
forfeitures. (See Aviles v. Swearingen (2017) 16 Cal.App.5th 485,
491–492 (Aviles).) This includes a strict application of the
Legislature’s definition of a “protected instrument,” which
includes only two categories of documents: (1) the “instrument
that contains the no contest clause,” and (2) an instrument “that
is in existence on the date that the instrument containing the no
contest clause is executed and is expressly identified in the no
contest clause.” (§ 21310, subd. (e).) This means that, if a party
contests an instrument that does not belong to one of these
categories, a no contest clause will not apply, even if it appears
that the transferors intended that it would. Giving effect to the
transferors’ intent in that situation would violate the directive in
section 21314 that “[t]his part applies notwithstanding a contrary
provision in the instrument.” (See Aviles, at p. 492.)
However, unlike the legislative restrictions on the types of
contests that can support application of a no contest clause, if a
prohibited contest does occur the governing statutes do not place
any restriction on the scope of the forfeiture that may result. In
the event of a direct contest brought without probable cause, the
19
Legislature has already balanced the various policy interests to
permit a forfeiture. The governing statutes do not place any
further limit on the scope of the forfeiture that the transferors
are permitted to impose.
Tyler does not cite any authority to the contrary. Tyler
relies on Aviles, supra, 16 Cal.App.5th 485, but that case is
inapposite. In Aviles, unlike here, there was no direct contest of a
protected instrument. In that case, a beneficiary challenged only
an unprotected trust amendment on the ground that it was
procured through undue influence.6 (Id. at p. 489.) Because that
amendment did not itself contain a no contest provision, the court
concluded that it was not a protected instrument and held that
no direct contest had occurred. (Id. at pp. 491–492.) Thus, the
court’s holding was simply an application of the statutes
discussed above that narrow the types of contests that will
support application of a no contest clause. The holding did not
address the pertinent issue here, which is the permissible scope
of forfeiture when a direct contest has occurred.
Other cases that Tyler cites similarly concern the issue of
whether a no contest clause in one instrument can apply to the
contest of a separate, unprotected instrument. Those cases do
not address the permissible scope of forfeiture from an actual
direct contest of a protected instrument. (See Estate of Rossi
(2006) 138 Cal.App.4th 1325, 1329, 1338 [proposed challenge to
an unprotected trust amendment on the ground of undue
influence]; Perrin v. Lee (2008) 164 Cal.App.4th 1239, 1247
6 This case would be similar to Aviles if, for example, Tyler
had directly contested only the 2003 Amendment. But her attack
on the Trust was not so limited, as discussed above.
20
[proposed challenge to several unprotected trust amendments];
Cory v. Toscano (2009) 174 Cal.App.4th 1039, 1044–1045
[challenge to the validity of interlineations on a trust document,
which the court held constituted a separate, unprotected
amendment].)
Tyler also cites the language of section 21311, which
provides in part that a no contest clause “shall only be enforced
against . . . [¶] [a] direct contest that is brought without probable
cause.” (§ 21311, subd. (a)(1), italics added.) Tyler argues that
this language means that a no contest clause may only be
enforced “against” the particular instrument that was directly
contested.
The language of the statute does not support that
interpretation. The statute identifies the types of contests that a
no contest clause may be enforced against, not the types of
instruments to which a forfeiture may be applied. This is
consistent with the Legislature’s purpose to clearly designate the
categories of contests that may support the application of a no
contest clause. (See Donkin v. Donkin, supra, 58 Cal.4th at pp.
424–426.) The statute does not address the scope of forfeiture
that is permissible once a contest that falls within one of these
categories has occurred.
Thus, Tyler does not identify any legislative limitation on
the scope of forfeiture that trustors may impose as a penalty for a
direct contest brought without probable cause. Tyler’s position
ultimately depends upon such a limitation. Tyler argues, in
essence, that her direct contest of the Original Trust may result
only in the forfeiture of her share of assets that is directly
specified by the particular provisions that she challenged. There
21
is no support for that argument in the language of the No Contest
Clause or in the law, and we therefore reject it.
In light of this analysis, we reverse. Key requests that, in
doing so, we also conclude that Tyler lacked probable cause for
her direct contest of the Trust. However, we cannot decide the
issue of probable cause as a matter of law on this appeal. As we
explained in Key v. Tyler II, the “legal standard for invalidating
an instrument based upon undue influence and the standard for
finding a lack of probable cause to believe the instrument was
valid are different.” (Key v. Tyler II, supra, 34 Cal.App.5th at p.
539.) The probate court has not yet considered whether the facts
show that Tyler lacked probable cause. We therefore remand for
the probate court to make such findings.
22
DISPOSITION
The probate court’s order denying Key’s petition to enforce
the No Contest Clause is reversed. The matter is remanded for
further proceedings on that petition, including findings as to
whether Tyler lacked probable cause for her direct contest of the
Trust. Key is entitled to her costs on appeal.
CERTIFIED FOR PUBLICATION.
LUI, P. J.
We concur:
ASHMANN-GERST, J.
HOFFSTADT, J.
23