Donkin v. Donkin 3/23/12 CA2/1

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State: California

Court: 1st District Court of Appeal 1st District Court of Appeal

Docket No: B228704

Case Date: 06/13/2012

Preview:Filed 3/23/12

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION ONE

ANNEMARIE DONKIN et al., Plaintiffs and Respondents, v. RODNEY E. DONKIN, JR., et al., as Trustees, etc., Defendants and Appellants.

B228704 (Los Angeles County Super. Ct. No. BP109463)

APPEAL from an order of the Superior Court of Los Angeles County, Reva G. Goetz, Judge. Affirmed in part and reversed in part. Snow Law Corp. and Stephen L. Snow for Defendants and Appellants. Mark H. Boykin for Plaintiffs and Respondents. --------------------

Appellants Rodney E. Donkin, Jr. and Vicki Donkin are successor trustees of the Donkin Family Trust dated August 15, 1988 (Trust), which was created by Rodney Donkin, Sr. and Mary Donkin. The Trust contains a no contest clause disinheriting any beneficiary who challenges the Trust, its provisions, or its asset distribution. In 2009, two of the beneficiaries, Annemarie Donkin and Lisa Donkin Kim, filed a safe harbor petition pursuant to Probate Code section 213201 to determine if their challenge the Trustee`s administration of the Trust would constitute a contest under the Trust`s no contest provisions. While the beneficiaries` petition was pending, the Probate Code was amended to eliminate the safe harbor mechanism, and the trustees filed a petition for instructions concerning the applicability of the new law. The trial court--apparently applying the former law regarding will contests--ruled on the beneficiaries` safe harbor petition, found the beneficiaries` challenge would not constitute a will contest, and denied the trustee`s petition for instructions. The trustees contend the trial court erred in (1) failing to rule on their petition for instructions prior to the granting of the safe harbor petition; (2) failing to determine whether the new law applied to the Trust; and (3) concluding the beneficiaries` proposed challenge to the trustees did not violate the Trust`s no contest provisions. As a consequence, the trustees request that we find as a matter of law the former law applies and the proposed challenges violate the Trust`s no contest provisions. We find that the old law applies, and under the old law`s safe harbor provisions, certain of the beneficiaries` challenges to a trust amendment would constitute a prohibited contest if they were pursued by the beneficiaries. FACTUAL BACKGROUND AND PROCEDURAL HISTORY A. Factual Background

Decedents Mary E. Donkin and Rodney E. Donkin, Sr. (Settlors), husband and wife, as settlors created a revocable Trust on August 15, 1988, which by its terms became

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All statutory references herein, unless otherwise noted, are to the Probate Code. 2

irrevocable upon the death of both spouses. Mary and Rodney, Sr.2 were the original trustees of the Trust. The primary beneficiaries of the Trust under its first amendment dated May 10, 2002, were the Settlors` children Rodney E. Donkin, Jr., Lisa B. Kim, and Annemarie N. Donkin. After the death of Rodney, Sr., on August 26, 2002, Mary amended the Trust on December 17, 2004 (Second Amendment). After Rodney, Sr. died, Mary served as sole Trustee of the Trust, and Mary died on February 5, 2005. The Trust specified that with respect to Resolution of Conflict, any controversy between the trustees and any beneficiary involving the construction or application of any of the terms, provisions, or conditions of this trust shall, on the written request of either or any disagreeing party served on the other or others, be submitted to arbitration. (Arbitration Clause). The Trust further specified with respect to Litigation that the Settlors desired that this Trust, the Trust Estate and the Trust administrators and beneficiaries shall not be involved in time consuming and costly litigation concerning the function of this Trust and disbursement of the assets. Furthermore, the Settlors have taken great care to designate, through the provisions of this Trust, how they want the Trust Estate distributed. Therefore, if a beneficiary, or a representative of a beneficiary, or one claiming a beneficial interest in the Trust Estate, should legally challenge this Trust, its provisions, or asset distributions, then all asset distributions to said challenging beneficiary shall be retained in Trust and distributed to the remaining beneficiaries herein named, as if said challenging beneficiary and his or her issue had predeceased the distribution of the Trust Estate. (No Contest Clause). The Second Amendment deleted the Allocation of Trust Assets` from the original Trust and replaced it with the following, after Rodney, Sr.`s death: Allocation of Trust Assets [

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