Waiver of Objection

In law, phrases can be similar but nonetheless distinct. For example, in the probate context, Letters of Administration can be issued as well as Letters of Special Administration. The former typically permits a person to administer an estate with general powers. The latter permits a person to administer an estate with limited powers. Therefore both grant the ability to administer an estate albeit to a different degree.

The uniqueness of legal terminology can ensnare the unsuspecting litigant. A recent unpublished appellate opinion involved a litigant who erroneously thought they had properly objected when in fact they had not.   

"Sister filed an ex parte application seeking suspension of Brother's trustee powers in February 2024, though the application itself is not in the record. Brother opposed the ex parte, arguing his parents did not want the house to be sold, that he needed to live in the home to care for the parties' disabled sister (not a party to this case),^[2] that the underlying settlement should be set aside, that Sister violated the settlement agreement, and that there was no emergency justifying ex parte relief. The trial court granted the application and suspended Brother's cotrustee powers.

At a May 2024 initial hearing on the petition, the trial court noted no written objections to the petition had yet been filed and warned Brother that 'if he fail[ed] to serve and file a timely objection or response by 08/01/2024, the Court may deem such objection or response waived.' The court continued the hearing for nearly three months.

At the August 2024 hearing, the trial court found Brother failed to file a written objection. The court told the parties it had previously set a deadline for written objections and had not received a written objection. Brother asked for a continuance, explaining he believed he had filed objections in the body of a separate petition he had previously filed against Sister, describing it as "excusable neglect" on his part. He denied understanding that there was a deadline for the filing of written objections. The trial court then placed Brother under oath and asked him why he did not file timely written objections. Brother responded that he was overwhelmed by his various responsibilities relating to the trust and the parties' disabled sister. The trial court found there was no mistake, inadvertence, surprise, or excusable neglect, and deemed the objections waived.

Accordingly, the trial court granted Sister's petition, removed Brother as cotrustee of the trust, permitted Sister to evict any remaining occupants of the parents' former home, and awarded attorney fees to Sister in an amount to be determined." 

On appeal, the appellate court upheld the trial court's ruling finding that objecting to an ex parte application does not constitute an objection to the underlying petition. 

Brown v. Mansueto, San Diego County Superior Court case no. 37-2008-00152252

Objecting to a Trustee's Accounting

“Don’t throw good money after bad.” 

This idiom can commonly be used in the litigation context. It basically means that a reasonable person would not invest their time, energy and money on an endeavor in which the potential output is outstripped by the input. For example, it would be illogical to invest a substantial sum of money in trying to fix a very old car.   

The following excerpt is from a recently decided unpublished appellate opinion: 

"In 2010, Dorothy resigned as trustee of the Survivor's trust and appointed her accountant, Terry Hinricher, as successor trustee. The trust provides that upon Dorothy's death, its assets shall be equally divided among her children, Jack Goulden, Laurie Goulden, and Elliot Goulden. Dorothy died in 2014.

In 2012, Jack petitioned to compel Hinricher to prepare an accounting of the trust. (Prob. Code, § 17200, subds. (a), (b)(6) & (7)(C).) Hinricher filed the first account, to which Jack objected. The probate court referred the matter to mediation. In 2014, the parties settled the first account, and the court approved the settlement. The same year, the probate court approved the second account. In 2015, Jack signed a written approval of the third through fifth accounts, and those approvals were filed with the court.

In 2016, Hinricher petitioned for approval of the sixth account, which included trustee fees of $78,398.57 and attorney fees and costs of $9,969.23. Jack objected to the sixth account on the grounds that (1) the trustee fees were excessive, and (2) checks from the trust account were missing or out of sequence. Hinricher filed a supplement to the sixth account, which explained that the missing checks were voided.

In 2017, Hinricher petitioned for approval of the seventh account. The account showed that the entire trust estate had been distributed to the beneficiaries. Hinricher requested an order approving trustee fees of $45,065.70 for the seventh account period. He also requested an order approving attorney fees and costs of $21,916.31 incurred as a result of the ongoing litigation with Jack and Laurie. Hinricher had set aside reserve funds for final expenses, but they only covered a portion of the fees and costs. Hinricher requested that the beneficiaries be "personally charged" with the outstanding balance of the fees and costs. Elliot objected on the grounds that only Jack and Laurie should be personally charged for fees and costs because only they were involved in the litigation. No other objections were filed.

After an evidentiary hearing, the probate court approved the sixth and seventh accounts and the trustee and attorney fees. The court sustained Elliot's objection, and it ordered that the trustee fees incurred from defending the first through fifth account be charged only to Jack and Laurie. The court ordered the remaining balance of fees and costs be "charged" equally among all beneficiaries."

Here the beneficiary challenged the trustee's accounting numerous times. Each time the trustee's accounting was approved by the court. One wonders why the beneficiary consistently challenged the trustee's accounting when no wrongdoing was exposed. It is understandable if the trustee botched a prior accounting which engendered mistrust between the trustee and beneficiary. However, that was not the case here. The trustee complied with their fiduciary duties by submitting an appropriate accounting every time. Hence, one wonders why the beneficiary challenged the latest accounting when the trustee had no track record of mismanaging trust assets. In other words, it appears the beneficiary was throwing good money after bad. 

Goulden v. Hinricher, Ventura County Superior Court, Case # 56-2012-00425329-PR-TR-OXN.