Reported / Citable
Background
Andrew P. McKinley, one of three equal beneficiaries of the McKinley Family Living Trust, filed a Probate Code section 850 petition in May 2024 against trustees Erin B. Harris and her spouse, and against Harris individually. He alleged the trustees were intentionally delaying administration and moving to control and liquidate two San Clemente hotels instead of allocating them into separate shares. He sought transfer of a one-third interest in each hotel and double damages under section 859. He also recorded lis pendens on both properties and later filed a first amended petition with the same substance. These were allegations, and the court made no findings on them.
The trustees objected, contending the Trust authorized a sale, and moved to expunge the lis pendens, citing a $15.5 million purchase offer. McKinley withdrew the lis pendens in September 2024, reserving the right to refile, and in October 2024 asked to dismiss the petition without prejudice. The probate court granted the request in December 2024 and entered judgment for the Harrises. The record does not show how a later dispute over setting aside that judgment was resolved.
Harris then filed two fee motions. The trustees' motion for $656,929.02 was denied, with the court noting that trustees might seek reimbursement from trust property by petition under sections 15684 and 16243. That ruling was not appealed. Harris's individual motion sought $83,434.50 in fees and $238.60 in costs, relying on equitable powers and section 1002. The court granted costs but denied fees, reasoning that California follows the American Rule, that section 1002 reaches only costs, and that probate courts may allocate statutory fees but cannot award prevailing-party fees in equity. Harris appealed only the fee denial.
The Court’s Holding
The Court of Appeal affirmed. Reviewing the legal question de novo, it explained that probate proceedings are statutory, that a probate court lacks general equity jurisdiction though it may apply equitable and legal principles to assist its probate function, and that Code of Civil Procedure section 1021 requires each party to bear its own fees unless a statute or agreement provides otherwise. Harris invoked no Probate Code fee provision, no Code of Civil Procedure provision such as section 128.5, and no trust or other agreement. She also appeared to abandon section 1002, which governs only costs.
Her reliance on Rudnick, Ivey, Hollaway and Powell failed. Those cases recognize that a probate court may charge a trustee's fees against the share of a beneficiary who brings an unfounded proceeding against the trust in bad faith. They involved fees incurred for the trust's benefit or fees that incidentally benefited the trust. Harris alleged frivolous litigation against her personally and sought fees incurred in her individual capacity, independent of any benefit to the Trust. The trustees had separate counsel and a separate fee motion.
Because the probate court's equitable power protects the trust estate rather than a trustee's personal assets, it lacked authority to award the fees, and Harris offered no other source of authority. The order was affirmed, and McKinley recovers costs on appeal. The court did not decide whether McKinley's petition was in fact frivolous or filed in bad faith.
Key Takeaways
- A trustee sued in her individual capacity cannot rely on a probate court's equitable powers alone to recover personal attorney fees and must identify a statute or an agreement.
- The American Rule codified in Code of Civil Procedure section 1021 applies in probate proceedings.
- Probate Code section 1002 authorizes costs to be paid by a party or from the estate, but it does not authorize attorney fees.
- Equitable fee-charging cases involving bad-faith beneficiaries concern fees incurred for the trust's benefit, which may be charged against that beneficiary's share of the trust.
- The probate court noted that trustees seeking fees incurred on behalf of the trust might pursue reimbursement by petition rather than by post-judgment motion, a point the appeal did not decide.
Why It Matters
This published decision confirms that the American Rule governs fee requests in probate. It also confines the probate court's equitable authority to shift fees to protecting the trust estate, not reimbursing a fiduciary's personal defense costs. A trustee personally named in a beneficiary's petition should identify a specific statutory or contractual basis before seeking fees.
The ruling is narrow. It does not address the trustees' separate fee request, which was not appealed. It also does not decide whether a personal defense that actually benefits the trust could support recovery on a proper showing under the cited statutes. The October 14, 2026 modification only corrected the caption and did not change the judgment.