Stanford Law School - Robert Crown Law Library

Filed 10/29/09

IN THE SUPREME COURT OF CALIFORNIA

ROBERT L. JOHNSON, as Cotrustee, etc., )

Plaintiff and Respondent,
S166747
v.
Ct.App. 2/6 B198228
KATHRYN A. GREENELSH, as
Cotrustee, etc.,
San Luis Obispo County
Defendant and Appellant.
Super. Ct. No. PR050017
____________________________________)

Here we conclude that a challenge to a surviving spouse‟s mental capacity
to transfer trust assets and appoint a successor trustee did not violate the no contest
clause in a family trust. A proceeding contesting a settlor‟s mental competence to
exercise rights under a trust does not amount to an attack on the trust itself, unless
it seeks to thwart the estate plan established by the trust.
BACKGROUND
Spouses Walter and Florence Warren created the Warren Family Trust in
1993. Walter, Florence, and their children William Warren and Kathryn
Greenelsh (Greenelsh) were named cotrustees. Walter died in 1996. The terms of
the trust called for the creation of three subtrusts: a survivor‟s trust, including
Florence‟s interest in the community estate; a QTIP (qualified terminable interest
property) trust, calculated to qualify for the federal estate tax marital deduction
and minimize estate taxes; and a residual trust consisting of the balance of the trust
estate. William Warrren and Greenelsh were remainder beneficiaries, as was
Florence‟s son by a previous marriage, Robert Johnson.
1

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William died on July 17, 2003, leaving Florence and Greenelsh as the
cotrustees. On July 22, 2003, Florence signed a document naming Johnson as her
successor cotrustee. The trust provides for such an appointment if a trustee
“becomes unable or unwilling to act as Trustee.” Johnson executed an
“Acceptance of Appointment” on August 30, 2003. On September 5, 2003,
Florence signed a memorandum to the trustees declaring that she had exercised her
right under the trust to withdraw all the property in the survivor‟s trust for
distribution to herself. The memorandum was also signed by one Forrest Warren
as special trustee.1 On September 18, 2003, Florence executed a document by
which she resigned as cotrustee and confirmed Johnson as her successor.
The trust includes a no contest clause, barring any distribution to a
beneficiary who “seeks to obtain in any proceeding in any court or before any
arbitrator an adjudication that this Trust or any of its provisions is void, or seeks
otherwise to void, nullify, [or] set aside this Trust or any of its provisions, . . . or to
change provisions which are clearly and unambiguously expressed herein, . . . or
through other means endeavors to secure or take any part of the Trust Estate in any
manner other than as set forth herein.” In January 2005, Greenelsh filed an
application under Probate Code section 21320 to determine whether a proposed
petition to compel arbitration would violate the no contest clause.2 Under the

1
The trust requires the special trustee to approve withdrawals from the
survivor‟s trust. The record does not indicate how or when Forrest became a
special trustee, or explain his family relationship.

2 “If an instrument containing a no contest clause is or has become
irrevocable, a beneficiary may apply to the court for a determination of whether a
particular motion, petition, or other act by the beneficiary . . . would be a contest
within the terms of the no contest clause.” (Prob. Code, § 21320, subd. (a).)
Further statutory references are to the Probate Code.

We note that in 2008, the Legislature enacted a thoroughgoing revision of
the statutory scheme governing no contest clauses. Operative January 1, 2010,
and applying to instruments that became irrevocable on or after January 1, 2001,
(footnote continued on next page)
2

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arbitration clause in the trust, Greenelsh sought to resolve “various disputes . . .
between petitioner and Robert Johnson regarding his erroneous claims of authority
as a trustee or co-trustee of the Warren Family Trust.” She also referred to
“disputes as to whether or not Florence Warren made a withdrawal of trust assets
to place them into her own personal ownership; cooperation in making decisions
affecting the Warren Family Trust property; and other disputes . . . .”3
In her reply to Johnson‟s opposition, Greenelsh made it clear that her
challenge to his authority as cotrustee was based on Florence‟s alleged lack of
capacity. Greenelsh attached letters from two neurologists, one dated October 8,
2001, opining that Florence “is incompetent to handle her own affairs at this
time,” and one dated August 19, 2004, with an assessment of “[a]mnesic dementia,
likely Alzheimer‟s disease, moderate in severity, in a pleasant, well-supported, 90-
year old female, with evolving neurobehavioral disorder including hallucinosis
and generalized anxiety disorder.”
The court denied Greenelsh‟s application without prejudice. It noted that
“[t]he petition relates to a mix of disputes that may or may not trigger the no

(footnote continued from preceding page)
the new scheme generally limits the enforceability of no contest clauses to (1)
direct contests brought without probable cause; (2) challenges to the transferor‟s
ownership of property at the time of the transfer, if expressly included in the no
contest clause; and (3) creditor‟s claims and actions based on them, if expressly
included in the no contest clause. The provisions of section 21320 are
discontinued. (Stats. 2008, ch. 174, § 2, adding § 21310 et seq.; see §§ 21311,
subd. (a)(1)-(3), 21314; Recommendation on Revision of No Contest Clause
Statute (Jan. 2008) 37 Cal. Law Revision Com. Rep. (2007) p. 359; Sen. Com. on
Judiciary, Analysis of Sen. Bill No. 1264 (2007–2008 Reg. Sess.) as amended
Mar. 24, 2008.)
3
The trust‟s arbitration clause is a broad one, applicable to “[a]ny and all
disputes” between trustees or beneficiaries, “concerning any property owned by
any trust(s) or the operation of any trust created herein.” The trust also authorizes
the trustees to “commence or defend such litigation with respect to the Trust or
any property of the Trust Estate as the Trustees may deem advisable.”
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contest clause. [¶] A dispute concerning Florence Warren‟s capacity to withdraw
funds from the survivor‟s trust and appoint Robert Johnson as a successor trustee
could be identified as a direct contest . . . . [¶] In any subsequent petition,
Petitioner should clearly identify all claims and relief that is sought so that the
court can make an informed determination of whether the no contest provision is
triggered.”
Greenelsh filed a second section 21320 application in June 2006. This
time, she proposed to seek a declaratory judgment that she was sole trustee of the
Warren Family Trust. She attached a power of attorney signed by Florence in
1995, naming Greenelsh and William Warren as successor attorneys-in-fact to her
husband Walter, and a document entitled “Consent to Act as Co-Attorneys-in-Fact
for Florence Warren” signed by Greenelsh and William on July 26, 2001.
Greenelsh also relied on a trust provision stating that if a trustee is unable to
participate in trust activities due to illness or disability, the other trustee or trustees
“may act as Trustee and make any and all decisions regarding the Trust Estate as if
he or she were the sole Trustee.” Her proposed petition alleged that after
Florence‟s incapacity and the deaths of Walter and William, Greenelsh was left as
the sole trustee. Johnson responded that the proposed petition violated the no
contest clause by seeking to invalidate the provisions in the trust giving the
surviving settlor the right to appoint a successor trustee.
The court agreed with Johnson and denied Greenelsh‟s application.4
Nevertheless, in November 2006 Greenelsh served a notice of arbitration on
Johnson, alleging disputes over a range of matters including Johnson‟s status as
successor trustee and Florence‟s transfer of trust property into her personal

4 Johnson notes that Greenelsh failed to appeal from either of the trial
court‟s rulings denying her section 21320 applications, but does not contend those
rulings have any preclusive effect. We express no view on that subject.
4

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ownership. Greenelsh claimed Florence lacked the capacity to take these steps.
She also challenged various actions taken by Johnson with respect to trust
property. Furthermore, she contended he should have no rights as a trust
beneficiary, apparently on the ground that he had filed court proceedings in
violation of the no contest clause. Johnson then sought to enforce the no contest
clause against Greenelsh, arguing that she had violated the clause by initiating
arbitration to set aside his appointment as cotrustee and Florence‟s withdrawal of
survivor‟s trust assets. Johnson‟s petition did not raise any other claims in the
arbitration demand as grounds for enforcing the no contest clause.
Greenelsh responded by withdrawing her notice of arbitration and arguing
that Johnson‟s petition was therefore moot. She also contended that in any event,
the arbitration notice did not violate the no contest clause because the proposed
arbitration was consistent with the provisions of the trust. The trial court granted
Johnson‟s petition.
The Court of Appeal affirmed, holding that “[t]he arbitration initiated by
Greenelsh directly attacks provisions of the Trust in an attempt to change Walter
and Florence‟s testamentary plan and, accordingly, directly contravenes the
express language of the no contest clause.” The court reasoned that Greenelsh had
“sought to nullify the unambiguous right given to a settlor by the Trust agreement
to appoint a successor trustee when he or she chooses, and to nullify the
unambiguous right given to a surviving settlor to transfer assets in the survivor‟s
trust from the Trust to the survivor individually.” She had also, according to the
court, sought to “ „secure or take‟ ” part of the trust estate in a manner contrary to
the terms of the trust, as forbidden by the no contest clause.
Greenelsh argued that her arbitration petition did not meet the statutory
definition of a “direct contest” because it did not allege “the invalidity of an
instrument.” (§ 21300, subd. (b).) Section 45 defines “instrument” as “a will,
5

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trust, deed, or other writing that designates a beneficiary or makes a donative
transfer of property.”
The Court of Appeal disagreed. It did not, however, explain how the
statutory definition of “direct contest” was met. Rather, it noted that a contest may
also be indirect under section 21300, subdivision (c), and decided that “[e]ven if
the documents appointing Johnson as trustee and withdrawing assets from the
survivor‟s trust are not considered „instruments,‟ the arbitration initiated by
Greenelsh necessarily includes a challenge to the provisions of the Trust
agreement pertaining to those subjects.” The court rejected Greenelsh‟s other
arguments, including her claims that the arbitration demand merely sought to
clarify ambiguous trust terms,5 was a challenge to the exercise of fiduciary power
supported by public policy, and was consistent with the terms of the trust and her
duties as a trustee.
We granted Greenelsh‟s petition for review. In this court, Greenelsh
primarily contends that (1) her challenge to Florence‟s competency was not a
“contest” under the statutory definition of “direct contest” or the case law
governing indirect contests; and (2) her request for arbitration did not violate the
no contest clause because it sought only to resolve ambiguities in the trust
provisions. We agree that the arbitration demand did not amount to a “contest,”
and thus we need not address Greenelsh‟s other claims.
Johnson not only renews the arguments that succeeded in the Court of
Appeal, but also raises another justification for the trial court‟s ruling: he asserts
that the allegations in Greenelsh‟s arbitration demand seeking to disinherit him
violated the no contest clause. Johnson did not present this argument in the trial
5
The no contest clause exempts “a petition made in good faith seeking an
interpretation or construction of an ambiguous provision of this instrument.”
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court or in his briefing before the Court of Appeal. “[N]o reason appears why we
should not apply the established rules that a party to an action may not, for the first
time on appeal, change the theory of the cause of action [citations] and that issues
not raised in the trial court cannot be raised for the first time on appeal.
[Citations.]” (Estate of Westerman (1968) 68 Cal.2d 267, 279, fn. omitted; see
Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 1350, fn. 12.) 6
DISCUSSION
There is no conflict or question of credibility in the relevant extrinsic
evidence. Accordingly, interpretation of the trust is a question of law for our
independent review. (Burch v. George (1994) 7 Cal.4th 246, 254 (Burch).)
Although no contest clauses are enforceable and favored by the public policies of
discouraging litigation and preserving the transferor‟s intent, they are nevertheless
strictly construed and may not be extended beyond their plainly intended function.
(Ibid.; §§ 21303, 21304.) “ „Whether there has been a “contest” within the
meaning of a particular no-contest clause depends upon the circumstances of the
particular case and the language used.‟ [Citations.]” (Burch, at pp. 254-255.)
Here, the Court of Appeal overstated the effect of Greenelsh‟s challenge to
Florence‟s mental capacity. Greenelsh did not propose to “void, nullify, [or] set
aside [the] Trust or any of its provisions,” or to “change provisions which are
clearly and unambiguously expressed,” as specified in the no contest clause.7 She

6 Johnson‟s counsel informs us that in oral argument before the Court of
Appeal, he urged the court to consider Greenelsh‟s attempt to disinherit his client
as a ground for finding that the no contest clause was violated. The court chose
not to address this point, and it played no part in our grant of review.
7
The clause provides, in relevant part: “In the event that any beneficiary
under this Trust or any amendments thereto . . . seeks to obtain in any proceeding
in any court or before any arbitrator an adjudication that this Trust or any of its
provisions is void, or seeks otherwise to void, nullify, [or] set aside this Trust or
any of its provisions, including amendments hereto, or to change provisions which
(footnote continued on next page)
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sought no revision of trust terms, and made no claim that the trust did not
authorize Florence to appoint a successor trustee or withdraw assets from the
survivor‟s trust. Greenelsh asserted only that Florence had become incompetent to
perform those actions, so that the appointment and withdrawal in 2003 were
ineffective. The trust provisions governing appointment of trustees and
withdrawal of assets would themselves remain unchanged and in full effect
whether or not Greenelsh succeeded in her challenge. Were Florence to be found
incompetent, her powers of appointment and withdrawal could be exercised on her
behalf by her legal representative or representatives. Nothing in the no contest
clause indicates it was intended to apply to proceedings to determine a settlor‟s
mental capacity to exercise rights conferred by the trust document.
Moreover, Greenelsh correctly argues that her challenge was not directed
at an “instrument” as contemplated by the statutory definition of “direct contest.”
(§ 21300, subd. (b).)8 Neither the document appointing Johnson as successor

(footnote continued from preceding page)
are clearly and unambiguously expressed herein, . . . or through other means
endeavors to secure or take any part of the Trust Estate in any manner other than
as set forth herein, then the right of that person to take any interest given to him or
her by this Trust shall be determined as it would have been determined had such
person predeceased the execution of the trust instrument without surviving issue.”
8
“ „Direct contest‟ in an instrument or in this chapter means a pleading in
a proceeding in any court alleging the invalidity of an instrument or one or more
of its terms based on one or more of the following grounds: [¶] . . . [¶] (2) Lack of
capacity.” (§ 21300, subd. (b).) We are here concerned only with lack of mental
capacity.

At oral argument, Greenelsh raised an additional statutory argument. She
suggested that her arbitration demand was not a contest because it was not filed in
“any court.” (§ 21300, subd. (b); see also id., subds. (c) & (d).) We decline to
consider this belated claim, but note that under section 21300, subdivision (a),
“ „[c]ontest‟ means any action identified in a „no contest clause‟ as a violation of
the clause.” Here, the trust‟s no contest clause refers to “any proceeding in any
court or before any arbitrator.”
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trustee nor the memorandum notifying the trustees of Florence‟s withdrawal of her
assets was a “writing that designates a beneficiary or makes a donative transfer of
property.” (§ 45 [defining “instrument”].) Absent any indication that the settlors
intended the no contest clause to apply to such documents, there is no reason for a
court to enlarge the scope of the clause.9
The Court of Appeal also reasoned that Greenelsh‟s arbitration demand
qualified as an “indirect contest” under section 21300, subdivision (c) and case
law. We disagree. The statutory definition of “indirect contest,” read literally,
does not include challenges based on lack of capacity. (§ 21300, subds. (b)(2) &
(c). )10 In any event, under the statute and the applicable common law,11 an
indirect contest is one that attacks the validity of an instrument by seeking relief
inconsistent with its terms. Greenelsh‟s claims did not conflict with any trust
9
In a provision applicable only to instruments executed on or after January
1, 2001, and thus not to the Warren Family Trust, the Legislature has specified
that a “challenge to the validity of an instrument, contract, agreement, beneficiary
designation, or other document, other than the instrument containing the no
contest clause” does “not constitute a contest unless expressly identified in the no
contest clause as a violation of the clause.” (§ 21305, subd. (a)(3).)
10
“ „Indirect contest‟ means a pleading in a proceeding in any court that
indirectly challenges the validity of an instrument or one or more of its terms
based on any other ground not contained in subdivision (b), and that does not
contain any of those grounds.” (§ 21300, subd. (c).) Section 21300, subdivision
(b)(2) includes the ground of “[l]ack of capacity.”

The statutory definitions of “direct” and “indirect” contest were added to
the Probate Code in 2002. (Stats. 2002, ch. 150, § 1.) Previously, the statute
defined “contest” in terms that were also directed at an “instrument”: “ „Contest‟
means an attack in a proceeding on an instrument or on a provision in an
instrument.” (Former § 21300, subd. (a); see Stats. 1990, ch. 79, § 14, p. 972.16.)
11
The Probate Code provisions governing no contest clauses are “not
intended as a complete codification of the law,” and “[t]he common law governs
enforcement of a no contest clause to the extent [the statutes do] not apply.”
(§ 21301.)
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provisions. The authorities cited by the Court of Appeal, and relied on by
Johnson, are inapposite.
In Burch, supra, 7 Cal.4th 246, a surviving spouse proposed to assert her
community property rights in corporate stock, pension plan benefits, and life
insurance policies that her husband had transferred to his family trust. She also
contemplated filing a separate action asserting her rights to the pension benefits
under federal statute. The trust made no accommodation for community property
interests, and upon the husband‟s death divided the estate into six subtrusts,
including a marital trust for the spouse. (Id. at pp. 252, 255-256.) This court held
that the spouse‟s proposed complaints were designed to evade her husband‟s
express intent to prevent her from taking under the trust while simultaneously
asserting independent claims of ownership. (Id. at p. 263.) We rejected the
spouse‟s claim that because her federal action sought no relief directly from the
trust or the estate, it would not amount to a contest. If successful, the action
“would effectively nullify or thwart the provisions in the trust instrument that
provide for the allocation of all assets placed in the trust estate to the various
subsidiary trusts.” (Id. at p. 261.)
Here, by contrast, Greenelsh‟s claims thwarted no distributive scheme
created by the trust. They did not even indirectly challenge the validity of any
trust provision allocating assets. If Greenelsh were to establish that Florence was
incompetent to appoint a successor trustee and withdraw assets, the estate plan set
out in the trust would be protected, not thwarted. Nor did Greenelsh assert an
independent claim of ownership over trust assets, as did the spouse in Burch.
In Genger v. Delsol (1997) 56 Cal.App.4th 1410, a surviving spouse
proposed an action that, under various theories, challenged the validity of a
corporate stock redemption agreement providing that shares held by a trust would
be returned to the corporation in exchange for cancellation of the husband‟s debt
10

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and transfer of the marital residence from corporate ownership to the trust estate,
for distribution to the spouse. (Id. at pp. 1417-1418.) Relying on the former
statutory definition of “contest” as “ „an attack in a proceeding on an instrument or
on a provision in an instrument,‟ ” the spouse contended her challenge to the
redemption agreement would not violate the trust‟s no contest clause. (Id. at p.
1420, & fn. 5, quoting former § 21300, subd. (a); see fn. 10, ante.)
The court disagreed, relying on Burch for the proposition that “[a] „contest‟
is not confined to a direct attack on a will or trust instrument.” (Genger v. Delsol,
supra, 56 Cal.App.4th at p. 1420, original italics.) The “complaint, if successful,
would completely unravel the decedent‟s estate plan by setting aside the core of
that plan, the corporate stock redemption agreement.” (Id. at p. 1422.) Thus, it
would nullify key trust provisions and violate the no contest clause. (Ibid.) The
Genger court also rejected the spouse‟s claim that she sought only to reform the
redemption agreement to correct her husband‟s mistake regarding the value of the
stock. “[T]he trust instrument expressly calls for transfer of the stock out of the
trust estate for redemption . . . while [the] proposed complaint seeks a contrary
result.” (Id. at p. 1423.)
Here, as noted, the proposed challenge does not disrupt an estate plan or
nullify any trust provision requiring the transfer of property. Florence was
authorized to withdraw property from the survivor‟s trust and to appoint a
successor trustee, but the trust does not require those powers to be exercised in any
particular way. Johnson contends the no contest clause is meaningless if it does
not apply to challenges to the documents by which a settlor actually exercises her
rights under a trust. However, the no contest clause remains effective against
attempts to “void, nullify, [or] set aside [the] Trust or any of its provisions, . . . or
to change provisions which are clearly and unambiguously expressed.” (See fn. 7,
ante.)
11

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The Court of Appeal also reasoned that Greenelsh‟s challenge to the
withdrawal of assets from the survivor‟s trust amounted to an “ „endeavor[] to
secure or take [a] part of the Trust Estate in [a] manner other than as set forth
herein,‟ ” under the terms of the no contest clause. It is true that the ultimate result
of a successful challenge to the withdrawal would be to preserve a large portion of
the trust estate for possible future distribution to Greenelsh and the other
beneficiaries. However, they would take their shares in the manner set forth in the
trust. It would unduly extend the no contest clause beyond its intended reach to
apply it to any action by a beneficiary seeking to restore property to the survivor‟s
trust. Surely, if Florence had withdrawn assets from the survivor‟s trust as a result
of fraud, duress, or mistake, a beneficiary could pursue an action to recover that
property after her incapacity or death without running afoul of the no contest
clause. No different reasoning applies to a challenge based on lack of capacity.
Johnson relies on Estate of Friedman (1979) 100 Cal.App.3d 810
(Friedman), in which a daughter‟s proposed complaint sought millions of dollars
in compensatory and punitive damages from her mother‟s second husband,
constructive trusts on estate assets obtained by him under two trusts and the
mother‟s will, and an order restraining his exercise of a power of appointment
under a marital trust. The complaint alleged duress by the husband in the
execution of the will and trusts. (Id. at p. 817.) The court held that the complaint
would thwart the wishes expressed in the mother‟s will, which left the daughter
$50,000, named the husband as remainder beneficiary of the marital trust, and
included a no contest clause. (Id. at p. 818.)
The scope of the proposed complaint in Friedman far exceeded Greenelsh‟s
challenge to Florence‟s capacity to appoint Johnson and withdraw assets from the
survivor‟s trust. Unlike Greenelsh‟s arbitration demand, the daughter‟s complaint
in Friedman “squarely” contested the terms of the will, and was “designed to
12

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frustrate th[e] testamentary plan” by securing a recovery that was plainly
inconsistent with the terms of the will and the related trusts. (Friedman, supra,
100 Cal.App.3d at p. 818.) Moreover, the daughter attempted to restrain the
husband from exercising his power of appointment under the marital trust.
Greenelsh did not seek to restrain Florence‟s powers under the trust, but only to
determine whether she was mentally competent to exercise them herself.
Scharlin v. Superior Court (1992) 9 Cal.App.4th 162 (Scharlin), is more on
point. There, a son (Joseph) sought to challenge the validity of an amendment to a
survivor‟s trust depriving him of his share of the trust estate, based on duress or
undue influence by his sister (Jacqueline) over their mother. (Id. at pp. 165-166.)
The relevant part of the Scharlin court‟s analysis came in response to Jacqueline‟s
claim that the proposed petition violated no contest clauses in the original trust and
the amendment, by attacking the surviving settlor‟s power to amend the trust and
her power of appointment over survivor‟s trust assets. Jacqueline argued that the
power to amend was built into the structure of the estate plan, and that an
unrestricted power of appointment was essential to preserve the marital deduction
under federal estate tax law. (Id. at pp. 169-170.) The court was not persuaded.
“What Jacqueline fails to recognize . . . is that Joseph‟s proposed challenge
is not on the surviving settlors‟ power to amend or revoke the surviv[or‟s] trust.
Rather it amounts to an attack on how the amendment occurred, namely, by the
alleged exercise of duress or undue influence upon the settlor. Joseph does not
contend the surviving settlor lacked the right or power to amend. Rather, he
argues the surviving settlor did not in fact amend the trust, and any so-called
amendment was the result of duress or undue influence, not the free will of the
settlor. Accordingly, we hold Joseph‟s proposed contest of the amendment . . . is
13

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not a challenge to the power to amend the surviv[or‟s] trust or to the general
power of appointment.” (Scharlin, supra, 9 Cal.App.4th at p. 170.)12
Similarly, Greenelsh‟s proposed challenge here was directed not at the
powers of appointment and withdrawal conferred by the trust provisions, but at
whether Florence was mentally competent to exercise those powers. There is
merit in Greenelsh‟s claim that her challenge was consistent with her fiduciary
obligations as a trustee. (See §§ 16000, 16002, 16006; 13 Witkin, Summary of
Cal. Law (10th ed. 2005) Trusts, § 63 et seq., p. 637 et seq.) Certainly, under the
case law reviewed above, a trustee who is also a beneficiary might violate a no
contest clause by taking action to reverse a settlor‟s exercise of rights conferred by
the trust, if the action would effectively nullify or alter the estate plan set out in the
trust. This, however, is not such a case.

12 Johnson attempts to distinguish Scharlin by noting that there, the
original trust‟s no contest clause did not refer to amendments, whereas the no
contest clause in the survivor‟s trust amendment did include challenges to
amendments. However, the Scharlin court considered this point only in response
to Jacqueline‟s claim that Joseph would be barred from recovering under a
separate decedent‟s trust if he failed to invalidate the survivor‟s trust amendment.
The court reasoned that because the mother could not amend the original no
contest clause insofar as it applied to the irrevocable decedent‟s trust, Jacqueline
could not apply the no contest clause in the survivor‟s trust amendment to
Joseph‟s rights under the decedent‟s trust. (Scharlin, supra, 9 Cal.App.4th at pp.
170-171.) This aspect of the court‟s holding does not apply to the case before us.
14

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DISPOSITION
We reverse the Court of Appeal‟s judgment.
CORRIGAN, J.

WE CONCUR:

GEORGE, C.J.
KENNARD, J.
BAXTER, J.
WERDEGAR, J.
CHIN, J.
MORENO, J.
15

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See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Johnson v. Greenelsh
__________________________________________________________________________________

Unpublished Opinion

XXX NP opn. filed 8/5/08 – 2d Dist., Div. 6
Original Appeal
Original Proceeding
Review Granted
Rehearing Granted

__________________________________________________________________________________

Opinion No.

S166747
Date Filed: October 29, 2009
__________________________________________________________________________________

Court:

Superior
County: San Luis Obispo
Judge: Martin J. Tangeman

__________________________________________________________________________________

Attorneys for Appellant:

Sandra Waite and David P. Weilbacher for Defendant and Appellant.

__________________________________________________________________________________

Attorneys for Respondent:

George ♦ Cyr, J. Keith George and Anne C. Cyr for Plaintiff and Respondent.

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Counsel who argued in Supreme Court (not intended for publication with opinion):

David P. Weilbacher
1670 Noyes Road, Post Office Box 51
Arroyo Grande, CA 93421
(805) 481-8121

J. Keith George
George ♦ Cyr
P.O. Box 6129
Los Osos, CA 93412
(805) 528-3394

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Petition for review after the Court of Appeal affirmed an order in a probate proceeding. This case presents the following issue: Does a proceeding to determine the competence of an individual to act under the terms of a trust trigger a no contest clause in the trust?

Opinion Information

Date:	Citation:	Docket Number:	Category:	Status:	Cross Referenced Cases:
Thu, 10/29/2009	47 Cal. 4th 598, 217 P.3d 1194, 100 Cal. Rptr. 3d 622	S166747	Review - Civil Appeal	submitted/opinion due	Scharlin v. Superior Court (1992) 9 Cal.App.4th 162

Opinion Authors
Opinion	Justice Carol A. Corrigan

Dockets
Sep 16 2008	Petition for review filed   Kathryn Greenelsh, appellant by David P. Weilbacher, counsel crc.8.25(b)
Sep 16 2008	Record requested
Sep 19 2008	Received Court of Appeal record   two doghouses ( volume 1 & 2 )
Nov 12 2008	Petition for review granted (civil case)   Votes: George, C.J. Kennard, Baxter, Werdegar, Chin, Moreno, and Corrigan, JJ.
Nov 12 2008	Letter sent to:   counsel re: Certification of Interested Entities or Persons & Form. The completed form and seven copies should be returned to us within 15 days.
Nov 21 2008	Certification of interested entities or persons filed   Robert Johnson, Defendant and Respondent. J. Keith George, counsel
Dec 1 2008	Certification of interested entities or persons filed   KATHRYN A. GREENELSH, as Co-trustee, etc., Plaintiff and Appellant David P. Weilbacher, counsel
Dec 15 2008	Opening brief on the merits filed   Kathryn Greenelsh, Appellant David P. Weilbacher, Attorney CRC 8.25 (b)
Jan 12 2009	Answer brief on the merits filed   Robert L. Johnson, as Co-trustee etc., Defendant and Respondent. J. K. George, counsel
Jan 29 2009	Request for extension of time filed   David Weilbacher counsel for appellant Greenelsh requesting to February 17 to file reply brief on the merits (to court for permission)
Jan 30 2009	Extension of time granted   On application of appellant and good cause appearing, it is ordered that the time to serve and file the reply brief on the merits is extended to and including February 17, 2009.
Feb 17 2009	Reply brief filed (case fully briefed)   Kathryn A. Greenelsh, appellant by David P. Weilbacher, Counsel
Feb 17 2009	Request for judicial notice filed (granted case)   Kathryn A. Greenelsh, appellant by David P. Weilbacher, Counsel Request for judicial notice of court appointed attorney in conservatorship
Feb 17 2009	Request for judicial notice filed (granted case)   Kathryn A. Greenelsh, Appellant by David P. Weilbacher, Counsel Request for judicial notice of record in the San Luis Obispo Superior Court Probate matter, Estate of Florence v. Warren.
Feb 17 2009	Request for judicial notice filed (granted case)   Kathryn A. Greenelsh, appellant by David P. Weilbacher, Counsel Request for judicial notice of court order recusing attorney
Jul 31 2009	Case ordered on calendar   to be argued Wednesday, September 2, 2009, at 1:30 p.m., in San Francisco
Sep 2 2009	Cause argued and submitted
Oct 28 2009	Notice of forthcoming opinion posted   To be filed on Thursday, October 29, 2009 at 10 a.m.
Oct 28 2009	Request for judicial notice denied   The requests for judicial notice filed on February 17, 2009, are denied.

Briefs
Dec 15 2008	Opening brief on the merits filed
Jan 12 2009	Answer brief on the merits filed
Feb 17 2009	Reply brief filed (case fully briefed)

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May 4, 2010 Annotated by jdearmas

FACTS In 1993, Walter and Florence Warren created the Warren Family Trust naming themselves trustees along with their children, William and Katheryn (Greenelsh). They also named William and Greenelsh remainder beneficiaries along with Florence’s child from a previous marriage, Robert Johnson (Johnson). The trust contains a no contest clause that states, in relevant part, that a person will lose their interest if they 1) try to “void, or seek[] to otherwise void, nullify, [or] set aside” the “Trust or any of its provisions” 2) “change provisions” or 3) “endeavor[] to secure or take part of the Trust Estate in a manner other than the right of that person”. Following the death of Walter and then William, Florence and Katheryn became the surviving cotrustees. In 2003, shortly after the death of William, Florence named Johnson her successor under the stipulation that she “bec[ame] unwilling or unable to act as Trustee” provided for in the Trust. Florence then withdrew all of her assets, with the approval of one Forrest Warren, into a survivor’s trust in compliance with her rights. Quickly thereafter, she affirmed Johnson as her successor. Greenelsh proceeded to challenge Florence’s capacity to make these determinations providing a neurologist’s determination that Florence had been “incompetent to handle her own affairs” since 2001. PROCEDURAL POSTURE Greenelsh first challenged Johnson’s authority under Probate Code Section 21320 – a “safe harbor” provision – that allows for the court to make a determination whether the no contest clause was violated. (Available at: http://law.justia.com/california/codes/prob/21300-21308.html) Greenelsh’s application was denied without prejudice. She filed a second section 2130 application seeking declaratory judgment that she was the sole trustee and the court again denied her application. Greenelch then served a notice of arbitration on Johnson who promptly tried to enforce the no contest clause divesting Greenelsh of her interest. Greenelsh withdrew the notice claiming the case was moot, but Johnson proceeded to seek enforcement of the clause, granted by the trial court. The Court of Appeals affirmed, finding the arbitration “directly attacks provisions” of the Trust’s no contest clause reasoning both that Greenelsh had first, “sought to nullify” the right for Florence to choose a successor and transfer assets to that successor, and, second, Greenelsh sought to “secure or take” part of the trust contrary to the Trust's terms. ISSUE Does a proceeding to determine the competence of an individual to act under the terms of a trust trigger a no contest clause in the trust? HOLDING “The arbitration demand [challenging mental capacity] did not amount to a ‘contest,’” under the no contest clause. REASONING In a unanimous decision, authored by Judge Corrigan, the court first affirmed and plainly stated that a no contest clauses should be strictly construed. It then rejected the Court of Appeal’s claim that the arbitration either nullified or changed the terms of the Trust or its provisions. Rather, the court reasoned that even if Florence were found to be incompetent, “[t]he trust provisions governing appointment of trustees and withdrawal of assets would themselves remain unchanged and in full effect . . . .” As such, the challenge would more properly be characterized as “intend[ing] to apply to proceedings to determine a settlor’s mental capacity to exercise rights conferred by the trust doctrine” – not intending to apply to the terms of the no contest clause. The court also found the arbitration was not directed at an “instrument” as required by the definition of “direct contest” under Probate Code Section 21300, subd. (b). (Available at: http://law.justia.com/california/codes/prob/21300-21308.html). To find such, the court found, would “enlarge the scope of the clause” and they declined to do so. Finally, the court rejected the Court of Appeal’s characterization that the arbitration was an “indirect contest” under Probate Code Section 21300, subd. (c). (Available at: http://law.justia.com/california/codes/prob/21300-21308.html). It offered a definition of an indirect challenge based on both the statute and common law as “one that attacks the validity of an instrument by seeking relief inconsistent with its terms.” It found the arbitration was not in conflict with the Trust. After rejecting the Court of Appeal’s common law authority, it then analogized the present case to Scharlin v. Superior Court (1992) 9 Cal.App.4th 162 (Sharlin) (Available at: http://scholar.google.com/scholar_case?case=14910542740010902465&hl=en&a...) where a son brought a challenge based on duress or undue influence of the mother. Here, like Sharlin, the court found the challenge did not bear on the terms of the trust.

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