Patrick Trolan et al., as Trustees v. Nellie Trolan

This appeal arises out of a dispute between six siblings over the interpretation of

the Trolan Family Trust (the trust), created by their parents in 1974. Upon the death of

their mother in 2015, the siblings became cotrustees of the trust, with the power to act by

majority vote. Five of the siblings, Appellants in this matter, agreed to maintain the

assets in trust, hoping they would increase in value for the next generation. The sixth

sibling, Respondent, asked for distribution of her share of the trust in cash, setting the

stage for the instant appeal. Upon a petition filed by Appellants, the trial court

interpreted the trust to require liquidation and distribution of the trust assets upon the

death of the last surviving parent, based primarily on a provision requiring distribution to

any beneficiary when he or she turned 30 years old. The court removed the siblings as

trustees and ordered the replacement trustee to liquidate and distribute the trust assets, as

all parties were over 30.

Appellants contend the trial court erred in making these findings and orders;

additionally, they argue the court erred in ordering the trust to pay Respondent’s attorney

fees and costs incurred in opposing the petition. We agree with the trial court that the

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clear, unambiguous language of the trust requires distribution of the trust assets and

termination of the trust. However, the trial court erred when it ordered liquidation of the

trust assets to accomplish that purpose, rather than deferring to the discretion of the

trustees to distribute the trust. The orders removing the parties as trustees and requiring

the trust to pay all attorney fees and costs flowed from that error. We therefore will

reverse the orders.

I. FACTUAL AND PROCEDURAL BACKGROUND

The six siblings are Patrick Trolan, Jay Trolan, Therese Trolan, William Trolan,

Tim Trolan (Appellants) and Nellie Trolan (Respondent). Their parents, Howard and

Alice Trolan, established the trust in 1974, when all of the siblings were minors. Howard

predeceased Alice, leaving her as the sole settlor and trustee.

In 2003, Alice Trolan amended the trust to name all six of her children, Appellants

and Respondent, as successor cotrustees, with the power to act by majority vote.

Alice Trolan died in July 2015; at that time the trust became irrevocable, and the

six siblings became the trustees.

A. Relevant Trust Provisions

The Fifth section of the trust is entitled “Dispositive Provisions.” Upon the death

of the later surviving of Howard and Alice Trolan, the trust provides that it shall be

apportioned into equal shares for each of the Trolans’ “then living children.”1

The trust

does not require the trustee to physically segregate or divide the trust shares, “except as

segregation or division may be required by the termination of any of the trusts . . . .” The

trustees have the ability to “distribute the remaining principal and any accumulated

income, or continue the trust for the benefit of the beneficiaries [named in the trust],

under the terms and conditions” set forth in the “Dispositive Provisions” section.



1 Additional provisions discuss distribution if any of the Trolans’ children are

deceased; as all six children were alive at the time of Alice Trolan’s death, those

provisions are not relevant to our discussion.

3

Relevant to the instant dispute, the trust provides, “Distributions of principal shall be

made as follows: [¶] . . . [¶] Whenever any beneficiary for whom a trust is then held

shall have attained the age of twenty-five (25) years the Trustee shall distribute to such

beneficiary one-half (1/2) of the principal of the trust held for him; upon having attained

the age of thirty (30) years the Trustee shall distribute to such beneficiary the balance of

his or her trust.”2

The trust further provides, “Unless sooner terminated in the manner

hereinbefore provided, each trust shall cease and terminate not later than twenty-one (21)

years from the death of the Surviving Spouse, or the death of the survivor of Co-Trustors’

children, or any of their descendants who are living at the date this trust is executed,

which ever death shall last occur.”

The trust also sets forth “Trustee’s Powers,” giving the trustee certain “powers and

discretions” in addition to those “granted to or vested in the Trustee by law or by [the

trust].” The trustee can “continue to hold any property received in trust, including

undivided interest in real property, and to operate any property or any business received

in the trust as long as the Trustee, in the Trustee’s discretion may deem advisable.” The

trustee also has the power, “[u]pon any division or distribution of the Trust Estate, to

partition, allot and distribute the Trust Estate in undivided interests or in kind, or partly in

money and partly in kind, at valuations determined by the Trustee, and to sell such

property as the Trustee may deem necessary to make division or distribution.”

B. Dispute Leading to Petition

The trust estate consists primarily of Comerica Bank stock and several parcels of

real property. Following Alice Trolan’s death, Respondent asked to receive her one-sixth

share of the estate in cash. Appellants agreed they wanted to retain the real property in

trust hoping the property would appreciate in value. As the majority, they agreed to



2 We shall hereafter refer to this provision as the Age 30 Provision.

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transfer Respondent’s share to her in cash after determining the value of her share based

on the fair market value of the real property assets.

The parties retained a probate referee to value the real properties. Based on his

appraisal, a conflict arose regarding the value, particularly of property located on Deer

Creek Road in Santa Cruz.3

Appellants contend the referee overvalued the land. They

obtained alternate appraisals that valued the land much lower than the referee.

Respondent wanted to use the referee’s valuation to determine her share of the trust.

Appellants proposed several alternatives, none of which involved the complete

liquidation of the trust assets. Respondent found the proposals unacceptable.

During these negotiations, Appellants and Respondent each retained their own

attorneys. Respondent asked that her attorney fees be paid from the trust, a request the

Appellants opposed.

C. Procedural History

Appellants then filed a Petition Regarding the Internal Affairs of a Living Trust

(the petition), asking the trial court to make findings regarding the value of the trust estate

as a whole and Respondent’s share of that estate, based on the lower appraisal the

Appellants obtained in response to the referee’s overvaluation of the Deer Creek Road

property. They further asked the court to order that, upon distribution to Respondent of

her share, all parties sign a mutual general release confirming the accuracy of the court’s

finding regarding the value of Respondent’s share, and waiving Respondent’s right to

appeal or bring any further proceedings regarding administration of the trust. The parties

each own a 3 percent interest in one of the real properties contained in the trust, called the



3 Appellants allege the dispute concerns one piece of property on Deer Creek

Road; Respondent claims the dispute involves three pieces of property, two on Deer

Creek Road and one referred to as the “small Brook Tree lot.” For purposes of our

analysis, we will refer to all of the disputed properties as the Deer Creek Road property.

We do not need to determine the specific nature of the dispute in order to decide this

appeal.

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41st Avenue property in the petition; the trust owns the remaining 82 percent of the

property. Appellants asked the trial court to allow the transfer of stock shares in

exchange for the release of Respondent’s 3 percent interest in the 41st Avenue property

to the trust. Finally, they asked the court to order that Respondent pay her own attorney

fees and costs.

Respondent filed opposition to the petition, arguing that the terms of the trust

required outright distribution of the trust assets if all beneficiaries were at least 30 years

old at Alice Trolan’s death. She asked the court to make findings regarding the value of

the trust assets, and the value of her share of the trust, based on the average of the

appraisal prepared by the referee, and an additional appraisal she obtained for the Deer

Creek Road property. She included in her proposed valuation of the trust the expenses

the Appellants incurred, if proved by documentation and receipt, as well as her own

attorney fees and costs. Respondent indicated she would release her 3 percent interest in

the 41st Avenue property for $25,000. She asked the court to direct the trustees to

liquidate the portion of the trust estate held in stocks and pay any capital gains as a trust

expense. Respondent also believed the court should order the trustees to handle all

income taxes, including capital gains taxes, at the trust level upon the transferring of trust

assets to the six beneficiaries, so that all beneficiaries receive an equal beneficiary

interest after factoring tax implications. She asked the court to order the sale of the real

properties in the trust, with the proceeds divided equally amongst the six beneficiaries,

and the trust thereafter to be terminated.

Following their initial pleadings, the parties filed several replies and trial briefs,

each of which further elaborated on the nature of the dispute between them. Throughout

her pleadings, Respondent’s proposition for how the dispute should be resolved remained

the same; in her trial brief, she confirmed her position that the trust assets should be sold,

the proceeds equally distributed between the beneficiaries, and the trust thereafter

terminated. Appellants changed their requested relief in each subsequent filing, although

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they remained steadfast in their belief the trust did not need to be liquidated but could

instead be maintained based on the decision of the majority of the cotrustees. In their

trial brief, Appellants asked the court to find that Appellants, as the majority trustees, had

the right to retain property in the trust in their discretion and had the right to decide

questions of valuation of property held in the trust, suggesting the court’s inquiry should

end there.4

If the trial court disagreed, Appellants asked the court to order Respondent to

accept their offer that the one Deer Creek Road property they believed was in dispute be

put on the market to determine the value of the lot. If the lot sold within 90 days, the sale

price would be used to determine and distribute Respondent’s share of the trust estate.

However, if after 90 days the parties did not receive an offer over $425,000, Appellants

suggested the court should use that figure to calculate Respondent’s share, to be paid

through a transfer of stock.

By stipulation of the parties, the court set an evidentiary hearing in September

2016. Each party provided exhibit and witness lists, and designated witnesses to testify

regarding the valuation of the disputed property. At the outset of the hearing, the court

issued a tentative ruling, “based on the Court’s interpretation of the language of the

Trust.” 5

It determined there was no need to hold an evidentiary hearing to interpret the

trust because, “the controlling language of the trust is specific and unambiguous,” such

that it could, “make a ruling requiring liquidation of the trust based on the trust’s plain

language.” The court found the Age 30 Provision, which it described as a “mandatory

specific provision,” prevailed over the general provision allowing the trustees to continue

to hold property in trust. After announcing the tentative decision, the court allowed

argument. It then offered the parties the opportunity to meet and confer to settle their



4 The brief references a proposed order Appellants submitted with the brief; that

proposed order is not part of the record on appeal.

5 The September 30, 2016 evidentiary hearing was not reported, as the parties did

not provide a court reporter. The court issued an Order Certifying Settled Statement on

Appeal in Lieu of Transcript on April 6, 2017.

7

dispute. After several hours, they were not able to reach a resolution, causing the court to

adopt its tentative ruling. “The Court did not hear testimony from any of the appraisers

or from the parties because the language was clear and the Court believed it must give

preference to the specific trust provisions over the general trust provisions.”

After ruling the Age 30 Provision required liquidation and distribution of the trust,

the court ordered the removal of all cotrustees and appointed a professional fiduciary to

carry out the trust terms. It did so, “Based on the Court’s belief that the failure to

distribute the trust assets was a breach of the fiduciary duties of loyalty and impartiality,

and the fact that the parties could not reach a resolution even when they were aware of

the Court’s tentative ruling, and based on the sua sponte authority provided by [Probate

Code] §15642(a).” The court then ordered the new trustee (the successor trustee) to

liquidate the trust assets, pay expenses and taxes, pay both parties’ attorney fees and costs

from the trust, and distribute the balance equally between the parties. Regarding the 41st

Avenue property, the court ordered that the 82 percent owned by the trust should be

distributed to the parties in one-sixth shares, as tenants in common. The court

memorialized these orders in a written order filed October 13, 2016; the attorney for the

successor trustee gave the parties notice of the entry of that order on the same date.

Appellants subsequently filed a motion to vacate the October 13, 2016 order,

while the successor trustee filed a petition to begin enforcing the order. On December 2,

2016, the court issued an order allowing the successor trustee to marshal the assets and

pay expenses, taxes, and both parties’ attorney fees pending the court’s ruling on the

motion to vacate; the court ruled that she could not start liquidating the assets until a

determination regarding the October 13, 2016 order had been made. Appellants filed a

Notice of Appeal of the December 2, 2016 order on December 8, 2016. When the court

declined to rule on their motion to vacate based on that notice of appeal, Appellants then

amended the appeal, first to include the October 13, 2016 order, and then to include the

8

September 30, 2016 minute order.6

Appellants timely appealed each of these appealable

orders. (Code Civ. Proc., § 904.1(1); Prob. Code, §§ 1300, 1304; Cal. Rules of Court,

rules 8.104(a) and (c), 8.108(c).)7



II. DISCUSSION

A. The Trial Court Erred in Ordering the Liquidation of the Trust

At the heart of Appellants’ appeal is their contention that the trial court erred in

finding that the trust had to be liquidated and distributed based on the Age 30 Provision;

all subsequent orders flowed from that finding, including the court’s order removing the

parties as trustees and its orders instructing the successor trustee to pay both parties’

attorney fees and costs from the trust assets. Therefore, we will first consider the

propriety of the court’s interpretation of the trust to require the immediate distribution

and liquidation of the assets.

1. Standard of Review

“The interpretation of a written instrument, even though it involves what might

properly be called questions of fact [citation], is essentially a judicial function to be

exercised according to the generally accepted canons of interpretation so that the

purposes of the instrument may be given effect. [Citations.] Extrinsic evidence is

‘admissible to interpret the instrument, but not to give it a meaning to which it is not

reasonably susceptible’ [citations], and it is the instrument itself that must be given effect.



6 Although the October 13, 2016 order reflects the rulings the court made on

September 30, 2016, Appellants included the September 30, 2016 minute order in the

appeal as a “precautionary measure,” in the event the minute order stood as an

independently reviewable order under the Probate Code, as the October 13 order does not

“precisely track” the minute order.

7 On January 4, 2017, Appellants filed a petition for writ of supersedeas, mandate,

prohibition, certiorari, or other appropriate relief, and a request for immediate stay, which

we denied in an order filed June 5, 2017, after considering briefs from both parties. We

also denied Appellants’ February 2, 2017 request to take judicial notice of judicial

admissions in lieu of a settled statement.

9

[Citations.] It is therefore solely a judicial function to interpret a written instrument

unless the interpretation turns upon the credibility of extrinsic evidence.” (Parsons v.

Bristol Development Co. (1965) 62 Cal.2d 861, 865; Sanders v. Yanez (2015)

238 Cal.App.4th 1466, 1471.) As the trial court did not consider extrinsic evidence in

interpreting the subject trust, we review the matter de novo. (See Estate of Cairns (2010)

188 Cal.App.4th 937, 944 (Cairns); Ike v. Doolittle (1998) 61 Cal.App.4th 51, 73 (Ike).)

2. The Clear, Unambiguous Language of the Trust Required Distribution and

Termination of the Trust Upon Alice Trolan’s Death

Appellants argue that the trial court misinterpreted Alice Trolan’s intent,

contending she did not mean to have the trust liquidated and terminated once all of the

beneficiaries turned 30. They believe the trial court’s interpretation of the Age 30

Provision is inconsistent with the general provisions of the trust which delineate the

powers of the trustees, in particular the power to continue to hold property in trust, and

the power to act by majority vote. Based on this alleged ambiguity, Appellants argue the

trial court erred in refusing to consider extrinsic evidence.

Probate Code8

section 21102 provides: “(a) The intention of the transferor as

expressed in the instrument controls the legal effect of the dispositions made in the

instrument. [¶] (b) The rules of construction in this part apply where the intention of the

transferor is not indicated by the instrument. [¶] (c) Nothing in this section limits the use

of extrinsic evidence, to the extent otherwise authorized by law, to determine the

intention of the transferor.”

“The words of an instrument are to receive an interpretation that will give every

expression some effect, rather than one that will render any of the expressions

inoperative.” (§ 21120.) “All parts of an instrument are to be construed in relation to

each other and so as, if possible, to form a consistent whole. If the meaning of any part



8 All future statutory references are to the Probate Code unless otherwise noted.

10

of an instrument is ambiguous or doubtful, it may be explained by any reference to or

recital of that part in another part of the instrument.” (§ 21121.)

In order to first ascertain, and then, if possible, give effect to the intent of the

trustor, the court must consider the whole of the trust instrument, not just separate parts

of it. (Cairns, supra, 188 Cal.App.4th at p. 944.) If the language of the instrument

clearly sets forth the intent, the court does not consider extrinsic evidence; it only looks to

extrinsic evidence in the event of an ambiguity. (See Estate of Dodge (1971) 6 Cal.3d

311, 318 (Dodge); Estate of Avila (1948) 85 Cal.App.2d 38, 39-40 (Avila).) The trial

court can consider extrinsic evidence to reveal a latent ambiguity. (Estate of Dye (2001)

92 Cal.App.4th 966, 977-979; Estate of Russell (1968) 69 Cal.2d 200, 206-213 (Russell).)

The court can also consider extrinsic evidence regarding the circumstances under which

the trust was made, in order to interpret the trust instrument, but not to give it a meaning

to which it is not reasonably susceptible. (Russell, supra, 69 Cal.2d at p. 211; Ike, supra,

61 Cal.App.4th at pp. 73-74.) However, if the court can ascertain the testator’s intent

from the words actually used in the instrument, the inquiry ends. (Estate of Newmark

(1977) 67 Cal.App.3d 350, 355-356.) “Where the terms of [the instrument] are free from

ambiguity, the language used must be interpreted according to its ordinary meaning and

legal import and the intention of the testator ascertained thereby.” (Avila, supra,

85 Cal.App.2d at pp. 39-40.)

Considering the trust as a whole, we conclude the trust is not ambiguous on its

face; the provisions clearly require the distribution of assets and termination of the trust

upon the death of the last surviving spouse if the beneficiaries have all reached age 30.

While Appellants contend the trial court erred in failing to consider extrinsic evidence on

this point, nowhere in their briefs on appeal do Appellants allege that such evidence

would reveal a different intent on Alice Trolan’s part. Rather, they argue that the

provisions of the trust itself reflect her intention, as the general powers afforded to the

trustees conflict with the Age 30 Provision. But reviewing all provisions together, we

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find the Age 30 Provision to be specific and unambiguous, and consistent with the other

provisions of the trust. The Fifth section of the trust (the “Dispositive Provisions”) which

includes the Age 30 Provision, sets forth how long the trust will survive—at least through

the life of the surviving spouse, and until all beneficiaries reach the age of 30. The

remaining provisions specify the trustees’ duties during the life of the trust. These terms

are not contradictory, as it is reasonable to conclude that the trustees’ duties as specified

remain in effect until, as required under the Age 30 Provision, the trust is distributed and

terminated. The Age 30 Provision simply determines when the trust shall be distributed.

This reading of the trust is not strained and does not result in an absurd reading of the

terms of the instrument but renders it a “consistent whole” under section 21121, and

“give[s] every expression some effect, rather than one that will render any of the

expressions inoperative.” (§ 21120.) We are required to construe the trust so as to give

effect to each term it contains; the plain meaning of the Age 30 Provision when construed

with the trust instrument as a whole conveys Alice Trolan’s unambiguous intent that the

trust be distributed and terminated when all of the beneficiaries reach 30 years of age.

However, Appellants argue that the record on appeal does not include the whole

trust because the second page of the document was not presented to the trial court.

Appellants do not specify how a failure to consider page two harmed them in this case;

while they generally allege the second page contains provisions showing their parents’

intent to maintain the trust after Alice Trolan’s death, they do not specify to which

provisions they refer. “To establish prejudice, a party must show ‘a reasonable

probability that in the absence of the error, a result more favorable to [it] would have

been reached.’ [Citation.]” (Diaz v. Carcamo (2011) 51 Cal.4th 1148, 1161.)

Appellants contend Respondent had the burden of providing the trial court a complete

copy of the trust because she was the party asking the court to interpret the trust.

However, Appellants also asked the trial court to interpret the trust, insofar as they asked

the court to determine whether the trust gave them authority to maintain, rather than sell,

12

the trust assets. Nothing in the record indicates they asked the trial court to consider page

two of the trust in evaluating the issues; in their trial brief, Appellants did not cite to any

of the provisions of page two as evidence of their parents’ desire to maintain the trust

after Alice Trolan’s death. Nor does the record show Appellants objected to the court

proceeding without a complete copy of the trust.

Appellants correctly assert that this court cannot consider page two, provided by

Respondent in her appendix on appeal, as it is outside the record reviewed by the trial

court. (Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180, 184, fn. 1.) Yet,

that does not relieve Appellants of their burden to show prejudice from any purported

errors committed by the trial court. Their argument thus fails, for they do not provide any

information to show page two of the trust would alter the interpretation of Alice Trolan’s

intent, either by this court or the trial court.

Appellants next argue applying the Age 30 Provision as suggested by Respondent

would have required the distribution of the trust during Alice Trolan’s life, thus making

the provision unenforceable as drafted. The plain language of the trust shows otherwise.

The Age 30 Provision falls under Section 5(I)(3) of the trust document, which states at

the outset, “Upon the death of the Surviving Spouse, the Trustee shall distribute the

remaining principal and any accumulated income, or continue the trust for the benefit of

the beneficiaries hereinafter named, under terms and conditions as follows: . . .” (Italics

added.) The Age 30 Provision is one of the “terms and conditions,” such that it only

applied once Alice Trolan, the “Surviving Spouse,” died. It did not apply during Alice’s

life.

Appellants assert the above-quoted portion of Section 5(I)(3) gives the trustees the

ability to terminate the trust or continue the trust for the benefit of the beneficiaries, such

that they could elect to continue the trust after Alice Trolan’s death, which the majority

did. But Appellants disregard the fact the provision allowing the trustees to terminate or

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continue the trust is subject to the terms and conditions set forth in the remainder of

Section 5(I)(3). Section 5(I)(3)(d) begins, “Distributions of principal shall be made as

follows. . . .” (Italics added.) The subsequent provision, Section 5(I)(3)(d)(1) allows the

trustee to make distributions to any beneficiary entitled to income from the trust as

needed, “If the Trustee deems the net income payable hereunder not sufficient to provide

for the reasonable care, support, maintenance, and education of any beneficiary. . . .”

However, the Age 30 Provision, located in Section 5(I)(3)(d)(2), provides that there will

be a partial distribution if the beneficiary is at least 25 years old, and full distribution

once the beneficiary reaches age 30. These provisions, taken with the whole of Section 5,

and the whole of the trust, indicate the trustees could continue the trust only where the

terms and conditions required it to do so, namely if the beneficiaries were all under the

age of 30. Once all beneficiaries were 30 or over, the terms of the trust required

distribution to each of the beneficiaries upon the surviving spouse’s death.

Appellants claim the fact all of Alice Trolan’s children were over 30 at the time

she amended the trust in 2003 and 2004 shows her intent that the Age 30 Provision would

not serve to terminate the trust immediately upon her death. Respondent makes valid

arguments to the contrary. First, she contends the court is required to assume Alice

Trolan could have had more children up to her death. While the facts presented in the

instant case suggest it was unlikely Alice would have more children after signing the

amendments, the rule on this issue is clear: “On the general subject of the inheritance

and devolution of estates, it is never presumed that a woman, no matter how aged, is

incapable of bearing children.” (Fletcher v. Los Angeles Trust & Sav. Bank (1920)

182 Cal. 177, 184, internal citations omitted; see Cal. Will Drafting (Cont.Ed.Bar 3d ed.

2017) § 34.17.) The second, and arguably more likely scenario proposed by Respondent,

is that one of Alice Trolan’s children could have predeceased Alice. Under

Section 5(I)(3)(b)(2) of the trust, the deceased child’s share of the trust would have then

passed to his or her offspring, people who could have been under 30 at the time of Alice

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Trolan’s death. Therefore, we do not agree the fact the parties were over 30 at Alice

Trolan’s death reveals her intent to maintain the trust after her death.

Appellants also argue Section 5(I)(3)(e) requires the trust to exist for 21 years after

Alice Trolan’s death. That is not what the provision requires. Rather, it states, “Unless

sooner terminated in the manner hereinbefore provided, each trust shall cease and

terminate not later than twenty-one (21) years from the death of the surviving

spouse. . . .” (Italics added.) As Respondent suggests, this provision comports with the

basic statutory rule against perpetuities. “A nonvested property interest is invalid unless

one of the following conditions is satisfied: [¶] (a) When the interest is created, it is

certain to vest or terminate no later than 21 years after the death of an individual then

alive. [¶] (b) The interest either vests or terminates within 90 years after its creation.”

(§ 21205.) Section 5(I)(3)(e) simply requires the trust to terminate after 21 years if it has

not otherwise terminated pursuant to the other provisions.

Appellants suggest Respondent concedes in her response to the appeal that the

trust contains ambiguities. They claim Respondent concedes the Age 30 Provision

cannot be enforced as drafted to require distribution when each beneficiary turned 30

because Alice Trolan was still alive when each of her children turned 30. Appellants

further believe Respondent concedes the Age 30 Provision is inconsistent with other

provisions in the trust. But Respondent does not concede either of these arguments. As

discussed above, she correctly argues the Age 30 Provision did not take effect until Alice

Trolan’s death, such that it did not require distribution while she was alive. She further

says looking only at the Age 30 Provision, without considering the trust as a whole, one

might think it is inconsistent with other provisions in the trust. However, she further

argues that taking the trust as a whole, the Age 30 Provision is “clearly consistent” with

the other provisions cited by Appellants. Respondent does not concede ambiguity in the

trust.

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Appellants further contend that application of the “specific-general rule” of

statutory and document interpretation to the trust implicitly reveals ambiguity in the trust

terms. Appellants claim, “Rules of interpretation are only applicable if a document is

unclear and requires construction,” thus arguing the trial court’s use of the specificgeneral

rule confirms the trust was ambiguous. We are not persuaded.

Code of Civil Procedure section 1859 sets forth the specific-general rule. “In the

construction of a statute the intention of the Legislature, and in the construction of the

instrument the intention of the parties, is to be pursued, if possible; and when a general

and particular provision are inconsistent, the latter is paramount to the former. So a

particular intent will control a general one that is inconsistent with it.” (Code Civ. Proc.,

§ 1859.) The rule has been applied by courts of review to trust documents. Thus, Estate

of Greenleaf (1951) 101 Cal.App.2d 658 (Greenleaf), demonstrates Code of Civil

Procedure section 1859 does apply to interpretation of trusts; however, the Court of

Appeal does not suggest the trial court must first consider extrinsic evidence or find an

ambiguity to apply the rule. Rather, this rule governing the interpretation of the intent of

the parties who drafted an instrument applies when two provisions in the document are

inconsistent. “As to the general provisions of the trust in reference to the sale or

disposition of the trust property, it appears that the trustee is vested with a wide

discretion. It does not definitely appear that the general grant of discretion applies to the

particular clause here involved, which clause specifically directs the trustee to act. Under

section 3534 of the Civil Code particular expressions qualify those which are general.

(See, also, Code Civ. Proc. § 1859.)” (Id. at pp. 664-665.) Thus, with respect to the

Trolan trust, to the extent the Age 30 Provision is inconsistent with other general

provisions of the trust, it is appropriate for the trustor’s specific intent expressed in the

Age 30 Provision to control over the general powers of the trustees pursuant to Code of

Civil Procedure section 1859, without the need to find an ambiguity in the trust.

16

The ruling in Estate of Simoncini (1991) 229 Cal.App.3d 881, 889-890 further

supports our conclusion that the specific-general rule applies even if there is no

ambiguity in the document under review. Under the rule that the court must consider the

whole of the testamentary instrument, and give ordinary interpretation to the words used

therein, the Court of Appeal in Simoncini determined the will at issue in the case was

unambiguous, despite the fact certain provisions appeared inconsistent. (Id. at p. 890.)

The court reiterated the importance of considering specific statements of intent which

may seem to conflict with more general statements, specifically a provision giving a

particular property to one person despite the general statement the entire estate property

should be equally divided. (Ibid.) “In our view, any other interpretation of the Will

would violate the principle that the words of a will must be interpreted so as to give every

expression some effect, rather than in a way that will render other language of the will

inoperative. This interpretation of the disputed language also satisfies the statutory

requirement that all parts of the Will must be construed so as to form a consistent whole.

[Citation.] Appellant’s interpretation, on the other hand, would require us either to ignore

specific language in the Will, or actually to rewrite it so as to render it entirely

inoperative. This is not the function of this court. [Citation.] We are not free to ignore

the plain meaning of the words actually used by the testatrix in her Will. [Citation.]”

(Ibid.)

The cases Appellants cite in support of their argument do not alter our analysis.

Edwards v. Arthur Anderson LLP (2008) 44 Cal.4th 937 does not explicitly concern

application of the specific-general rule; the language Appellants quote from that opinion

does not provide sufficient support for their argument.9

While In re P.A. (2012)

211 Cal.App.4th 23, a juvenile justice case, did involve the specific-general rule, it



9

“ ‘Where the language of a contract is clear and not absurd, it will be followed.

[Citations.] But if the meaning is uncertain, the general rules of interpretation are to be

applied.’ [Citations.]” (Edwards v. Arthur Anderson LLP, supra, 44 Cal.4th at p. 953.)

17

similarly does not require us to find the trial court’s application of that rule revealed an

ambiguity in the trust. Rather, the Court of Appeal held that the specific-general rule

could not be used to defeat legislative intent as between two inconsistent provisions of

the Welfare and Institutions Code. (Id. at p. 40.) Neither of these cases is factually

similar to the case before us. Nor do they reveal any error in the trial court’s application

of the specific-general rule. In the instant matter, even if the subject provisions were

inconsistent, we can apply the specific-general rule to find the specific Age 30 Provision

prevails over the other, general provisions outlining the duties of the trustees without first

needing to find an ambiguity in the trust.

Even if the application of the specific-general rule did not implicitly reveal the

existence of an ambiguity in the trust, Appellants argue the court was required to admit

extrinsic evidence to determine whether there existed any ambiguities in the document.

Citing Russell, supra, 69 Cal.2d 200, Appellants contend the trial court had to undertake

a two-step process to determine whether an ambiguity existed in the trust. They believe

the trial court first had to provisionally admit extrinsic evidence to determine whether

there was an ambiguity, and then, if the trust was ambiguous, admit extrinsic evidence to

interpret the settlor’s intent. However, the Supreme Court in Russell indicates this twostep

process only applies if there exists a latent ambiguity that does not appear on the face

of the testamentary document (a will in that case). (Id. at p. 207.) On appeal, Appellants

do not argue a latent ambiguity exists in the trust; they contend the ambiguity appears on

the face of the trust instrument, citing to other provisions of the trust to argue the trial

court incorrectly interpreted the Age 30 Provision. Nor does anything in the record

presented to the trial court indicate Appellants intended to argue a latent ambiguity had

the trial court held an evidentiary hearing.

Moreover, because Appellants have not identified the extrinsic evidence they

would have offered to prove a latent ambiguity, they have not met their burden to show

they suffered prejudice as a result of the alleged error. (Grail Semiconductor, Inc. v.

18

Mitsubishi Electric & Electronics USA, Inc. (2014) 225 Cal.App.4th 786, 799.) We

agree with Respondent that the only evidence offered by Appellants regarding Alice

Trolan’s intent is that which can be “inferred from the trust instrument.” In reply to this,

Appellants suggest, “[t]he fact that the court denied an evidentiary hearing is exactly the

point,” yet they do not specify the extrinsic evidence the court could or should have

considered if it held such a hearing.

Based on the above, we find the clear, unambiguous terms of the trust express

Alice Trolan’s intent that the trust terminate, and thus that the trustees must distribute the

trust assets, as she is deceased and all of the beneficiaries are now 30 years or more at

this time.

3. The Trust Does Not Require Liquidation of the Assets

Appellants assert that the trial court erred when it ordered liquidation of the trust

assets. We agree. Having found the trust clearly and unambiguously requires

distribution of the trust assets, we also conclude that the language of the trust clearly and

unambiguously grants the trustees discretion regarding the method of distribution of the

trust assets. Under Section 6(H) of the trust, the trustees have the power, “[u]pon any

division or distribution of the Trust Estate, to partition, allot and distribute the Trust

Estate in undivided interests or in kind, or partly in money and partly in kind, at

valuations determined by the Trustee, and to sell such property as the Trustee may deem

necessary to make division or distribution.” Based on this language, we conclude that

Appellants were not required to liquidate the assets to accomplish distribution of the trust

under its terms; rather, liquidation is one of several possible options allowed by Section

6(H).

Absent language in the trust explicitly mandating the liquidation of the trust, the

sole authority, if any, for the trial court’s order was the trial court’s overarching authority

to administer trusts. The court can alter administrative provisions of the trust under

“ ‘peculiar’ or ‘exceptional’ circumstances” where necessary to accomplish the purpose

19

of the trustor. (Ike, supra, 61 Cal.App.4th at p. 83.) The court cannot substitute its

judgment and discretion for that of the trustees’ if the trustees are acting within proper

limits, unless there is a complete failure or refusal to perform the duties of the trustees.

(Greenleaf, supra, 101 Cal.App.2d at p. 662.) While the trustees’ discretion is not

unlimited or arbitrary, “. . .[t]he judgment of the trustees, exercised in good faith, shall

control. . . .” (Copley v. Copley (1981) 126 Cal.App.3d 248, 284 (Copley).)

Based on our construction of the trust, and the record before us, we conclude the

trial court exceeded its authority when it ordered immediate liquidation of the trust assets

and substituted its judgment regarding the method of distribution of the trust assets for

that of the trustees. Nothing in the record before us suggests the trial court considered

whether the Appellants, as majority trustees, were exercising their discretion to value and

distribute the trust assets in good faith. Rather, it appears the trial court relied on an

erroneous determination that the language of the trust instrument itself required the

immediate liquidation of the assets and thus concluded the trustees had failed or refused

to perform the duties of the trust.

However, we note that the trustees could accomplish the purpose of the trust—the

distribution of equivalent shares of the trust assets to each of the beneficiaries—without

liquidating the trust assets. Moreover, under the terms of the trust, Appellants were

properly attempting to distribute Respondent’s share of the assets to her at the pendency

of this litigation, although they were doing so under the mistaken belief they could keep

their own shares in the trust. Appellants filed the petition to obtain the trial court’s

assistance with the distribution of assets to Respondent, asking the trial court to resolve

the dispute over the valuation of the real property so that they could complete their

distribution obligation with respect to Respondent. The filing of the petition for this

purpose falls within the parameters of section 17200, which, among other things,

authorizes trustees to petition the court to determine questions of construction of a trust

instrument, to determine the existence or nonexistence of a duty or right, and to pass

20

upon the acts of the trustee, including the exercise of discretionary powers. (§ 17200,

subd. (b)(1), (2), and (5).) Appellants’ proper application for a judicial determination of

the value of assets and guidance on the construction of the trust did not provide a basis

for the trial court to order immediate liquidation of the assets. The record does not

demonstrate that Appellants completely failed or refused to comply with the terms of the

trust such that the trial court could, under its administrative power, substitute its

discretion for that of the trustees and order liquidation of the assets. The trial court should

have deferred to the trustees’ determination regarding how to distribute the trust assets, in

accord with Section 6(H) of the trust.10

B. Removal of Trustees

According to the settled statement, the trial court removed the parties as

cotrustees, and appointed a professional fiduciary to serve as successor trustee, “[b]ased

on the Court’s belief that the failure to distribute the trust assets was a breach of the

fiduciary duties of loyalty and impartiality, and the fact that the parties could not reach a

resolution even when they were aware of the court’s tentative ruling, and based on the

sua sponte authority provided by PC §15642(a). . . .” Appellants argue the trial court

abused its discretion in doing so, as they believe the court misconstrued the trust to

require the immediate liquidation of the trust assets, and thus lacked statutory grounds for

removal. Respondent contends the court correctly removed the trustees, as they failed to

comply with the Age 30 Provision, and because there was hostility between the

Appellants and herself. We agree with Appellants that the trial court abused its discretion

when it ordered the parties removed as trustees.



10 By this same measure, the trial court erred in ordering the trust’s share of the

41st Avenue property distributed to the parties in one-sixth shares to be held as tenants in

common. The trustees should decide how to distribute that property, along with the other

trust assets.

21

1. Standard of Review

Although Appellants argue the standard of review is de novo, all relevant legal

authority indicates we must review the trial court’s removal of the parties as trustees for

abuse of discretion. (See Estate of Gilmaker (1962) 57 Cal.2d 627, 633; Tevis v. Butler

(1894) 103 Cal. 249, 250-251.) The trial court’s power to remove trustees “is a power

that the court should not lightly exercise, and whether or not such action should be

taken . . . rests largely in the discretion of the trial court. Furthermore, the court will not

ordinarily remove a trustee appointed by the creator of the trust. [Citation.]” (Estate of

Bixby (1961) 55 Cal.2d 819, 826 (Bixby).)

We measure the trial court’s exercise of discretion against the legal principles

governing the subject of its action. (Sargon Enterprises, Inc. v. University of Southern

Calif. (2012) 55 Cal.4th 747, 773 (Sargon); Horsford v. Board of Trustees of Calif. State

Univ. (2005) 132 Cal.App.4th 359, 393-394.) “ ‘The scope of discretion always resides

in the particular law being applied, i.e., in the “legal principles governing the subject of

[the] action. . . .” Action that transgresses the confines of the applicable principles of law

is outside the scope of discretion and we call such action an “abuse” of discretion. . . . [¶]

The legal principles that govern the subject of discretionary action vary greatly with

context. They are derived from the common law or statutes under which discretion is

conferred.’ To determine if a court abused its discretion, we must thus consider ‘the legal

principles and policies that should have guided the court’s actions.’ ” (Sargon, supra,

55 Cal.4th at p. 773, internal citations omitted.)

2. The Trial Court Abused Its Discretion When It Removed the Trustees

“A trustee may be removed in accordance with the trust instrument, by the court

on its own motion, or on petition of a settlor, cotrustee, or beneficiary under

Section 17200.” (§ 15642, subd. (a).) Section 15642, subdivision (b) sets forth grounds

for removal of a trustee, including: “(1) Where the trustee has committed a breach of the

trust. [¶] . . . [¶] (3) Where hostility or lack of cooperation among cotrustees impairs the

22

administration of the trust. [¶] (4) Where the trustee fails or declines to act . . . .”

Because Alice Trolan appointed her six children as cotrustees, we look to whether “a

disqualification clearly appears” in the record.11

(Bixby, supra, 55 Cal.2d at p. 826.)

Based on its finding that the Age 30 Provision required immediate liquidation and

termination of the trust, the trial court determined the trustees breached their duties of

loyalty and impartiality to the trust. However, as discussed ante, the trust did not require

liquidation of the assets, but distribution of them. Appellants argue they were making

appropriate efforts to distribute Respondent’s share of the trust assets to her, such that

there was no statutory basis to remove the parties as trustees. It does not appear from the

record that the trial court considered whether Appellants breached their fiduciary duties if

they were not, in fact, required by the terms of the trust to liquidate the assets.

Under section 16000, “On acceptance of the trust, the trustee has a duty to

administer the trust according to the trust instrument and, except to the extent the trust

instrument provides otherwise, according to this division [§ 15000 et seq.].” Section

16040 provides, “The trustee shall administer the trust with reasonable care, skill, and

caution under the circumstances then prevailing that a prudent person acting in a like

capacity would use in the conduct of an enterprise of like character and with like aims to

accomplish the purposes of the trust as determined from the trust instrument.” Trustees

must “reasonably” exercise any discretionary powers authorized by the trust instrument.

(§ 16080.) Even if given “absolute,” “sole,” or “uncontrolled” discretion by the trust



11 Appellants suggest the law requires a heightened showing of cause when the

trial court removes a trustee on its own motion. Section 15642 does not include a

separate standard for sua sponte motions compared to a request made by a settlor,

cotrustee, or beneficiary. Appellants do not cite any legal authority indicating such a

higher standard exists for a sua sponte motion; nor are we aware of any such authority.

We evaluate the issue under the law applicable to all orders removing trustees appointed

by the settlor.

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instrument, “the trustee shall act in accordance with fiduciary principles and shall not act

in bad faith or in disregard of the purposes of the trust.” (§ 16081, subd. (a).)

The duty of loyalty is set forth in section 16002, subdivision (a), providing, “The

trustee has a duty to administer the trust solely in the interest of the beneficiaries.” As a

fiduciary, the trustee “is bound to act in the highest good faith toward his beneficiary and

may not obtain any advantage therein over the latter by the slightest misrepresentation,

concealment, threat, or adverse pressure of any kind.” (Estate of McLaughlin (1954)

43 Cal.2d 462, 469-470.) Where there are two or more beneficiaries, the duty of

impartiality, memorialized in section 16003, provides, “the trustee has a duty to deal

impartially with them and shall act impartially in investing and managing the trust

property, taking into account any differing interests of the beneficiaries.” (See Penny v.

Wilson (2004) 123 Cal.App.4th 596, 604 [“The purpose of the trust is paramount, and the

trustee must act impartially toward all beneficiaries.”]; Werschkull v. United California

Bank (1978) 85 Cal.App.3d 981, 998-999.)

In the instant matter, if we agreed the trust required complete liquidation of the

trust assets, we would easily find the trial court properly exercised its discretion to find

Appellants breached the duties set forth above by failing to liquidate the trust assets and

distribute the profits accordingly. However, that is not what the trust required. Although

Appellants erroneously believed the instrument allowed them to maintain the trust

beyond Alice’s death, the fact remains they were trying to distribute Respondent’s share

to her upon her demand. A dispute arose as to the valuation of trust property. Under the

terms of the trust, the majority of cotrustees had broad discretion as to the method of

distribution, “at valuations determined by the Trustee. . . .”

Nothing in the trial court’s settled statement suggests the court considered whether

the Appellants were taking reasonable steps to distribute the trust; the court focused only

on their failure to liquidate the assets. The record reveals Appellants made appropriate

efforts to value the property and distribute Respondent’s share accordingly, as authorized

24

by the trust. The parties jointly retained counsel to start administering the trust shortly

after Alice Trolan’s death in July 2015. In September 2015, Respondent notified the

attorney she wanted to receive her share of the trust in cash, a request repeated once she

retained her own counsel. A residential property broker valued the Deer Creek property

at $425,000 in September 2015. Unable to negotiate an agreement, the jointly retained

attorney started proceedings with a probate referee to value the trust assets and move the

matter forward; the referee valued the Deer Creek property at $625,000. Given the

disparity between the two evaluations, Appellants reasonably obtained a further report on

the condition of the property, and an additional evaluation of the property’s value, which

came back at $355,000. As the parties could not resolve the dispute regarding the value

of the Deer Creek property, Appellants filed the petition to seek the trial court’s

assistance. During the proceedings, each party obtained further valuations of the

property; Respondent obtained an appraisal valuing the property at $625,000, while

Appellants next appraisal returned a value of $425,000.

While, as cotrustees, Appellants owed a duty of loyalty and impartiality to all

beneficiaries, including Respondent, Respondent cites no legal authority, nor are we

aware of any, requiring trustees to acquiesce to the demands of one beneficiary when

doing so potentially undervalues the shares distributed to the other beneficiaries.

Appellants took reasonable steps to attempt to resolve the dispute and distribute

Respondent’s share to her. Based on its incorrect reading of the trust, the trial court

erroneously determined the trustees breached the duties of loyalty and impartiality by not

liquidating the trust assets.

The alleged breach of duties was not the sole reason the trial court removed the

trustees and appointed a professional fiduciary. In the settled statement, the court said it

did so because “the parties could not reach a resolution even when they were aware of the

court’s tentative ruling.” While hostility or lack of cooperation among cotrustees can be

a basis to remove the trustees under section 15642, subdivision (b)(3), removal is only

25

appropriate if the hostility impairs the administration of the trust. (IFS Industries, Inc. v.

Stephens (1984) 159 Cal.App.3d 740, 754; Copley, supra, 126 Cal.App.3d at p. 288.)

There is no evidence the hostility between Appellants and Respondent impaired the

administration of the trust under its clear and unambiguous terms. Alice Trolan elected

to appoint her children as cotrustees, allowing them to act by majority vote. The trust

allows the trustees, in this case, the majority of the cotrustees, to determine the method of

distribution and value of assets at the time of a distribution. If the cotrustees could not

reach a consensus as to the value, such that there was no majority, that would constitute

an impairment of the administration of the trust. However, the fact Respondent does not

agree to the majority cotrustees’ valuation of the trust assets does nothing to impair them

from administering the trust according to the trust instrument.

Having found no statutory basis for the trial court to remove the parties as trustees,

we will reverse the trial court’s order accordingly.

C. Attorney Fees and Costs

Appellants contend Respondent challenged their petition in her role as a

beneficiary, not as a trustee, such that the trial court erred in ordering the trust to pay her

attorney fees and costs. Respondent argues her actions were for the benefit of the trust, in

her role as a successor cotrustee.

“We apply an abuse of discretion standard to the trial court’s decision granting . . .

fee requests payable from the trust’s assets. There are limits to the scope of our

deference, however, ‘When the record is unclear whether the trial court’s award of

attorney fees is consistent with the applicable legal principles, we may reverse the award

and remand the case to the trial court for further consideration and amplification of its

reasoning.’ ‘[D]iscretion must not be exercised whimsically, and reversal is appropriate

where there is no reasonable basis for the ruling or the trial court has applied the “wrong

test” or standard in reaching its result.’ ‘A trial court’s award of attorney fees must be

26

able to be rationalized to be affirmed on appeal.’ ” (Donahue v. Donahue (2010)

182 Cal.App.4th 259, 268-269, internal citations omitted.)

The record on appeal does not provide detailed information about the trial court’s

reasons for ordering the trust to pay both Appellants’ and Respondent’s attorney fees and

costs. “If litigation is necessary for the preservation of the trust, the trustee is entitled to

reimbursement for his or her expenditures from the trust; however, if the litigation is

specifically for the benefit of the trustee, the trustee must bear his or her own costs

incurred, and is not entitled to reimbursement from the trust. [Citation.]” (Terry v.

Conlan (2005) 131 Cal.App.4th 1445, 1461.) The court’s rulings that the trust required

immediate liquidation and that a failure to distribute the trust accordingly constituted

breaches in the trustee’s fiduciary duties would, if correct, support a finding that

Respondent undertook litigation for the benefit of the trust. However, given the trial

court’s erroneous application of the relevant legal principles, we are compelled to remand

the issue to the trial court for further consideration. Our reversal on this issue is without

prejudice to the trial court’s further findings in this regard.

We reverse the trial court’s September 30, 2016, October 13, 2016 and December 2, 2016 orders, and remand the matter to the trial court with instructions to remove the successor trustee, to reinstate Appellants and Respondent as trustees, and to

order the trustees to distribute the trust assets pursuant to Section 6(H) of the trust. The trial court shall then reconsider de novo Respondent’s request that the trust pay her attorney fees and costs. Each side shall bear its own costs on appeal.