Key Points

  • A California probate court has no equitable authority to award attorney fees to a trustee who incurred them solely in her individual capacity for her personal defense.
  • The equitable power recognized in Rudnick, Ivey, Hollaway and Powell allows a probate court to charge fees incurred for the benefit of the trust against the share of a beneficiary who brings an unfounded proceeding in bad faith.
  • Absent a fee statute or agreement, Code of Civil Procedure section 1021 requires each party in a probate proceeding to bear its own attorney fees.
  • The court affirmed the denial of trustee Erin B. Harris's $83,434.50 individual fee motion and awarded beneficiary Andrew P. McKinley his costs on appeal.

A California appeals court held Tuesday that probate courts cannot use their equitable powers to make a trust beneficiary pay the personal legal bills of a trustee he sued. The ruling rejected a trustee's bid to recover $83,434.50 she spent defending herself against her brother's petition over the planned sale of two family hotels.

The Fourth Appellate District, Division Three, affirmed an order by Orange County Superior Court Judge Megan Wagner denying trustee Erin B. Harris's fee motion. Acting Presiding Justice Gooding wrote the published opinion for a unanimous panel that included Justices Scott and Servino.

The decision construes a line of appellate cases holding that a probate court's equitable power lets it charge legal fees against the trust share of a beneficiary who brings a baseless case in bad faith. The panel held that power covers fees incurred for the trust's benefit. A trustee who pays to defend herself personally needs a statute or a contract to shift those fees.

"None of the cases Harris cites holds that a trustee sued in her individual capacity may recover attorney fees incurred solely in her own defense pursuant to equitable powers of the probate court," Gooding wrote.

Harris and her husband, Scott Harris, are trustees of the McKinley Family Living Trust, which Harris's late parents established in 2010. Harris and her siblings, Andrew P. McKinley and Marcus J. McKinley, are its equal beneficiaries. Its assets included two San Clemente hotels.

In May 2024, Andrew McKinley petitioned under Probate Code section 850 to recover estate assets, naming both trustees and Harris individually. He alleged the trustees "intentionally delay[ed] the administration" of the trust and that Harris told him a sale would "produce the means for her to personally invest in other opportunities that hold the potential for better financial gain." He sought a one-third interest in each hotel and double damages under section 859.

McKinley also recorded a lis pendens on each hotel. Supporting an August 2024 motion to expunge the notices, Scott Harris testified that a buyer had offered $15.5 million and that the litigation had "obstructed our ability to get finalized contracts for the sale of the Properties." McKinley withdrew the notices in September and then asked to dismiss his petition, which the court granted in December 2024.

In February 2025, the trustees jointly sought $656,929.02 in fees and costs incurred on behalf of the trust, to be charged against McKinley's share. Harris separately sought $83,434.50 in fees and $238.60 in costs she incurred personally. She argued that "[e]quity dictates that [she] recover the attorney's fees she incurred individually," because the petition was frivolous and filed in bad faith.

After an August 2025 hearing, Wagner denied both fee requests and awarded Harris only her costs. "California follows the American Rule which holds that attorney fees incurred in litigation are not recoverable unless authorized by statute or contract," the court explained. She concluded that probate courts "have equitable power to allocate and apportion any fees that may be awarded to a trustee pursuant to statute," but lack independent power to award fees to a winning party. Harris appealed only the ruling on her individual motion.

On appeal, Harris argued that "[d]ecades of California authority" let probate courts award fees "irrespective of any statutory authority." Gooding wrote that Code of Civil Procedure section 1021, which requires each party to bear its own attorney fees unless a statute or agreement provides otherwise, has long governed probate proceedings. Harris did not rely on a Probate Code fee provision, a Code of Civil Procedure provision such as section 128.5, or any term of the trust.

Quoting a 2017 decision, Gooding wrote that the precedents Harris cited, including Rudnick v. Rudnick (2009), Estate of Ivey (1994), Hollaway v. Edwards (1998) and Powell v. Tagami (2018), stand for "the unremarkable proposition that the probate 'court's equitable power includes the power to charge attorney fees against a beneficiary's share of the trust if that beneficiary, in bad faith, brings an unfounded proceeding against the trust.'"

In Rudnick, the trustee incurred fees as trustee and for the trust's benefit. Harris had called that case "squarely on point." "It is not," Gooding wrote. "Unlike the trustee in Rudnick, Harris alleges McKinley pursued frivolous litigation against her personally, not against the Trust or the trustees acting in their capacity as such." The trustees, the opinion noted, had separate lawyers and a separate fee motion.

The panel said Hollaway and Powell allowed fees because the trustee's personal legal work helped the trust. In Hollaway, a trustee's personal defense "also benefited the trust by eliminating charges raising serious questions about whether she had and could continue to administer the trust properly." Harris did not contend that defending the claims against her benefited the trust.

Quoting the 2022 decision in Bruno v. Hopkins, Gooding wrote that the probate court "has broad equitable powers to protect the trust estate," then added in the panel's own words, "not the trustee's personal assets." Because Harris's personal assets were the only thing at stake in her motion, the panel held, the probate court lacked equitable authority to award her fees.

Wagner had rejected Harris's argument that a choice-of-law clause in the trust called for Arizona law, and Harris did not challenge that ruling on appeal.

The appellate court affirmed the order and awarded McKinley his costs on appeal. The trustees' $656,929.02 request was not before the panel. In denying that request, Wagner said the trustees "might be entitled to reimbursement for attorney's fees out of trust property pursuant to Probate Code section 15684 and 16243," but that any such request "must be made by petition, not in a post-judgment [sic] motion for fees."

Michael I. Katz of Katz Ruby & Carle represented Harris. McKinley was represented by Lisa N. Neal of Rutan & Tucker.