July 17, 2015

Trustee Succession

There are 3 roles in a trust, (1) settlor, (2) trustee and (3) beneficiary. For purposes of this post, the focus will be on the trustee.

The trustee is the legal owner of trust property. Trust assets will be titled in the trustee's name. For example, if a property is owned by a trust, the deed should list the trustee's name and the name of the trust on it. As legal owner, the trustee has the authority to seek legal redress on behalf of trust property for any injuries. The availability of legal redress does not automatically end when the original trustee passes away. 

When a successor trustee replaces the original trustee, the successor trustee is said to "stand in the shoes" of the original trustee. Eddy v. Fields (2004) 121 Cal.App.4th 1543, 1548. This permits the successor trustee to seek recovery for damages caused to trust property that occurred while the original trustee was still alive. These facts generally entail the case of George v. Gandolfo Excavating Inc., Alameda County Superior Court case # 12628707.

Original trustee owned real property in a rural area of Livermore, CA. In 2009, neighbors of original trustee allegedly cleared an improper fence line. In 2010, original trustee passed away and successor trustee assumed the office of trustee. In 2012, successor trustee sued neighbors in Alameda County Superior Court for (1) trespass; (2) destruction of real property; (3) destruction of trees (Civ. Code, § 3346; Code Civ. Proc., § 733); (4) discomfort and annoyance as a result of trespass; (5) negligence and negligence per se; (6) indemnification; and (7) conversion. Yep, go big or go home.

Defendants moved to have the case dismissed because successor trustee lacked "standing" to sue. They argued that the real party in interest was original trustee, the person who owned the property in 2009 when the alleged torts took place. Since successor trustee did not assume that role in 2010, the alleged damage had already happened. No harm no foul you could say. The trial court agreed with this argument and dismissed the case.

Successor trustee then appealed his case to the First District Court of Appeal of California. 

The Court of Appeal reversed the lower court's ruling, finding that a successor trustee "succeed[s] to all the rights, duties, and responsibilities of his predecessors."  Moeller v. Superior Court (1997) 16 Cal.4th 1124, 1131. So if original trustee had a right to seek legal redress for alleged injuries to the property, successor trustee does as well.