In Re The Shaheen Trust (CA2 1/16/15)

This case holds that the probable-cause  exception applies to in terrorem clauses in trusts. The result itself is reasonable but the way the court gets there gives us an opportunity to complain.

The Shaheen Trust contained a clause invalidating the interests of those who challenged it. Certain beneficiaries did challenge it. They lost but the trial court refused to enforce the clause. The trustee appealed, arguing that it should have.

The trial court essentially concluded that 14-2517 (you can challenge a will if you have probable cause despite a will provision to the contrary) applied to trusts as well (by applying a case – Stewart (2012) – that was based on the statute). So there were three possible issues: does the statute apply, what’s the law if it doesn’t, and, if necessary, was there probable cause?

The court first says that Stewart held that the statute applies only to wills. Actually, though, Stewart dealt with a “Will and Trust,” which is presumably why the trial court thought the case could apply, and it isn’t entirely easy to tell in Stewart where or whether that court meant to limit the statute.

But the court then says that, although the statute doesn’t apply, the Restatement of Property – which “suggests treating no-contest provisions in wills and trusts the same” – does, and therefore no-contest provisions in wills and trusts will be treated the same. This is abrupt and conclusory. The court relies on a comment in the Restatement, not even the black letter; since when have the comments  — this one written by a law professor thirty years ago – become the presumptive law of Arizona? Does the comment reflect the common law or the majority of jurisdictions, or was it just the Reporter’s opinion? Does the court know? Does it care? And the comment (which the court doesn’t quote, though if you look carefully at the cite you can at least spot that its a comment) says simply that there’s no reason to treat wills and trusts differently. What about expressio unius est exclusio alterius? The statute doesn’t say “trusts”; had the legislature thought of a reason to treat them differently? We doubt it, and it doesn’t look like the parties raised the issue. But doesn’t a proper respect for statutory law demand that the issue at least be acknowledged?

Regarding probable cause, the court first concludes that “when a single petition alleges multiple challenges to a will or trust . . . probable cause must exist as to each challenge.” On this point the court then reverses, since the trial court found one of the several challenges here to be without merit. That court found that the challenging beneficiaries had thought it subjectively reasonable but the test is objective reasonableness, for which there was no evidence in the record.

So the court remands for an order invalidating these beneficiaries’ interests.

But wait, there’s more. On another issue entirely, there’s a footnote. The beneficiaries argued that the appeal should be dismissed because the trustee failed to follow ARCAP 13(a)(3) (the brief must indicate the basis of the appellate court’s jurisdiction.) The trustee didn’t cite any statute, she simply said, according to the court, that she was “appealing from a judgment of the superior court [sic].” Then the court says “we believe [that] is sufficient.” The court suggests the beneficiaries’ argument is “hyper-technical” and that it has an independent duty to examine its jurisdiction.

So remember that, at least in Tucson, you don’t have to follow the rule any more unless you happen to have an appeal from something other than a complete and final judgment. The court won’t do anything except to chastise your opponent for raising the issue. Some rules, its seems, are binding and others are hyper-technicalities that can be ignored.

(No, the court shouldn’t dismiss an appeal where jurisdiction exists just because the appellant failed to point out specifically why it exists. And we do question the usefulness of the rule for most appeals. But annulling it by footnote isn’t the answer. We’ve seen briefs kicked back for failing to follow it – for failing to do exactly what this brief didn’t: cite a statute. That’s what the court should have done here. When the beneficiaries faced it with its mistake this court made another – writing something that makes a joke either of its footnote or of the rule.)

(link to opinion)