This blog has devoted a lot of real estate to the use of anti-SLAPP motions in California trust and estate litigation. Though the courts’ treatment of such motions is varied and oftentimes unpredictable, Californians can generally rely on the anti-SLAPP statute to strike any meritless cause of action that seeks to hold them liable for engaging in constitutionally protected activity. Traditionally, this has meant absolute protection for the pursuit of litigation, and specifically for funding litigation.
But for trustees, the Court of Appeal’s recent decision in Starr v. Ashbrook (2023) 87 Cal.App.5th 999 means that such protection may not be quite so absolute after all. It turns out that there is a fine line between “engaging in constitutionally protected activity” and “wasting and mismanaging trust assets.”
Terrible, Terrible Facts
The focus of the Starr case was Arnold Starr, a 90-year-old, retired UC Irvine neurology professor and father of three sons. Arnold had created a trust some 25 years before the relevant events, of which he was the trustee. Later in life, Arnold entered into two relationships that would prove pivotal: one with his live-in girlfriend, Sandie Steele, and another with his close friend and neighbor, Thomas Ashbrook.
As Arnold aged and his mental faculties began to decline, his sons became concerned that Steele was abusing and manipulating him. Sharing their concerns, Arnold amended his trust to make his son Jonathan the acting trustee, and further authorized his sons to assist with his legal, financial and medical affairs.
Steele found out, and began to tell others that Arnold’s sons had committed legal and financial crimes against him. She recruited Ashbrook and Arnold’s nephew to her cause and, over the ensuing months, the team engaged in a pattern of subterfuge and manipulation designed to lock Arnold’s sons out of his estate plan, and out of his life.
With the assistance of three different estate planning attorneys, Steele and Ashbrook: (1) convinced Arnold that his sons had sued him (they had not); (2) successfully persuaded Arnold to completely amend his trust and remove his sons from it; (3) ousted two successor trustees (including Comerica Bank) to install Ashbrook as trustee, with Ashbrook’s wife as the trust protector; and (4) cut off Arnold from all contact with his family and other friends.
In December 2019, Ashbrook filed a petition for instructions with the probate court asking it to confirm that a handwritten note purportedly executed by Arnold, which among other things gave Steele $200,000 and a right to live in Arnold’s Laguna Beach home rent-free for two years following his death, was a valid amendment to the Trust. (The note was almost certainly a forgery.)
Two months later, an elder abuse lawsuit was filed in civil court against Arnold’s son’s, purportedly by Arnold himself though it was later revealed that he was not even aware of this suit. Ashbrook authorized the distribution of trust money to fund the lawsuit, including the sale of a farm held in the Trust to pay the legal fees.
Trustee Gets Sued and Turns to Anti-SLAPP For Protection
As the truth underlying Steele and Ashbrook’s conduct came to light, Jonathan filed a petition against Ashbrook in probate court seeking to remove him as trustee and to surcharge him for trust monies wasted, including those expended by Ashbrook to fund the elder abuse lawsuit and the petition as to the likely-forged trust amendment.
Seeing the writing on the wall, Ashbrook dismissed his petition and resigned as trustee. The elder abuse lawsuit was also settled in short order. Ashbrook then filed an anti-SLAPP motion asking to strike Jonathan’s petition, arguing that his pursuit of the petition for instructions and funding of the elder abuse lawsuit was constitutionally protected activity under Code of Civil Procedure section 425.16(e).
The trial court denied the motion. It held that Jonathan’s suit did not arise out of protected activity, but rather out of allegations that Ashbrook had wasted trust assets. Ashbrook appealed.
Court of Appeal Offers No Comfort
The Court of Appeal affirmed the denial of Ashbrook’s anti-SLAPP motion.
There are two steps to California’s anti-SLAPP analysis: (1) whether the challenged conduct arose from protected activity; and (2) whether the claim challenging the protected conduct is “legally sufficient and factually substantiated.” Unlike in Dae v. Traver, the court never considered whether Jonathan’s petition had the “minimal merit” necessary to avoid being stricken as a Strategic Lawsuit Against Public Participation because it held that Ashbrook’s conduct was not protected activity to begin with.
The court conceded that, “[a]t first glance, those actions appear to constitute the constitutionally protected activities of filing and pursuing the Petition for Instructions and using trust assets to fund the elder abuse lawsuit.” But the true test at issue here was not the conduct’s initial appearance, but rather whether the “core injury-producing conduct upon which the claim is premised arise[s] out of protected activity.”
The root of Jonathan’s petition was the loss of trust assets. The court held that “[m]isconduct in the administration of a trust and preservation of trust assets” could not be considered protected activity under anti-SLAPP doctrine.
Ultimately, Starr does not offer a clear distinction between litigation that is constitutionally protected and therefore protected by anti-SLAPP law, and litigation that constitutes a waste of trust assets and is therefore unprotected. Indeed, it seems possible that, under Starr, anti-SLAPP may never protect a trustee’s use of trust assets to fund litigation as long the beneficiary can convince the court that it’s not the trustee’s litigation that’s the problem, but rather the use of trust funds to pay for the litigation.
Starr may have limited reach given that it arose in the context of apparently egregious conduct by the trustee. Pending subsequent clarification from the courts, however, it seems for now that the test to distinguish “protected litigation” from “wasteful litigation” may be, in the words of Justice Potter Stewart, “I know it when I see it.”