Autopsy of a Trusts and Estates Case: the Appellate Doctor Is in

• Jurisdiction: United States,Federal
• Author: By Allonn E. Levy, Esq.,* and Ryan D. Cunningham, Esq.*
• Publication year: 2018
• Citation: Vol. 24 No. 4

AUTOPSY OF A TRUSTS AND ESTATES CASE: THE APPELLATE DOCTOR IS IN

By Allonn E. Levy, Esq.,* and Ryan D. Cunningham, Esq.*

"It's dead Jim." By the time those words are uttered the cause is so lost that even the illustrious Dr. McCoy cannot save the patient.¹ But for front-line trusts and estates litigators, the cause is often not lost; the patient can still be saved. Trial court errors can be corrected on appeal so long as the right groundwork is laid and the right steps are taken. Of course, the opposite is also true. Even the most mundane missteps can be a death knell for a case if not properly addressed at either the trial court or appellate levels. This article discusses the appellate process for trusts and estates litigation matters by examining the steps common to such appeals and highlighting the typical pitfalls. The doctors performing this autopsy are two appellate practitioners² with extensive experience litigating trusts and estates appeals.

I. STARTING AT THE END - THE APPELLATE DECISION

Many clients—and some practitioners—believe that an appeal provides a second bite at the legal apple. But as we explain here, that is not quite right. While a direct appeal³ is an appeal of right⁴—in that the reviewing court must hear it⁵—the reviewing court's viewpoint is quite different from that of the trial court. Practitioners ignoring that reality do so at their client's peril. This concept is particularly important in the area of trusts and estates litigation where many trial court decisions involve an exercise of discretion or turn on factual determinations.

For a recent example of how not to present a trusts and estates appeal, look no further than Pizarro v. Reynoso,⁶ a particularly "acrimonious family squabble . . . over the property of [a] deceased patriarch."⁷ On appeal, the losing party sought to reverse the trial court's finding that the trustee acted properly regarding the sale of certain trust property. After three years of contentious appellate litigation, including extensive appellate motion work and full briefing,⁸ the Court of Appeal ruled that appellants had "forfeited any and all arguments on appeal as to the merits of the trial court's order."⁹ The Court of Appeal reached this seemingly harsh result—effectively ruling against the appellant on all substantive issues without ever reaching those substantive arguments—because the practitioners presenting the appeal had committed two fundamental appellate "no-nos." First, the practitioners failed to adhere to appellate brief formatting guidelines with respect to appropriate headings and presenting their supporting authorities.¹⁰ Second, they failed to accept the trial court's fact findings or prove those findings were erroneous.¹¹

As the Pizarro opinion notes, the appellant did not fail to present his case. He set forth an introduction, statement of facts, standard of review, a listing of claimed errors, and made extensive legal arguments.¹² But reviewing courts don't view their truth-seeking function in the same way as trial courts. Unlike a trial court, a reviewing court comes to the dispute with the mindset that the litigant has had his or her day in court. The reviewing court will therefore presume the trial court's order is correct unless an appellant affirmatively shows some prejudicial error has occurred.¹³ A poor presentation—or even a good one that fails to follow the myriad of appellate rules—can result in the reviewing court affirming the lower court's ruling without ever reaching the substance of the appeal. Indeed, reviewing courts often have little patience for appellants who do not follow procedural and organizational rules: "[j]udges are not like pigs, hunting for truffles buried in briefs."¹⁴

Even where practitioners follow the many appellate rules, the presumption that the trial court acted correctly permeates nearly every substantive aspect of appeals. One critical area is the standard a reviewing court will use to review claimed errors. The standard of review applied by a reviewing court is critical since the Court of Appeal will affirm an order if it is correct on any basis. "[A] ruling or decision, itself correct in law, will not be disturbed on appeal merely because given for a wrong reason."¹⁵

II. THE SURGICAL TOOLSET - STANDARDS OF REVIEW

Surgeons are taught "when you hear hoofbeats, think horses not zebras."¹⁶ But how do you discern if it is indeed a zebra, and how do you prepare differently for that reality? Whether the surgeon is operating on a horse, a zebra, or maybe just a stubborn old mule, the rules for curing the poor animal's ills are vastly different. So, too, does the analysis of distinct appellate issues differ.

Like our contrived animal-patients, there are three primary standards of review that dictate how a reviewing court will analyze any appeal. The appellate practitioner must determine, and then apply, the correct standard to demonstrate the existence of any error. The highly deferential "substantial evidence" test frequently arises in trusts and estates appeals because the issues faced by practitioners in these cases are often fact intensive. In those instances, any substantial evidence will support the trial court's ultimate finding. While the standard is often phrased in a deceptively concise manner, a more detailed explanation of the depth of deference associated with this standard can be found in the trust context. In challenging the trial court's factual findings regarding a trustee's accounts in an order for preliminary distribution of trust assets, the court explained the "substantial evidence" test as follows:

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The trial court was the trier of fact and the sole judge of the credibility of witnesses. We are not in a position to weigh any conflicts or disputes in the evidence. Even if different inferences can reasonably be drawn from the evidence, we may not substitute our own inferences or deductions for those of the trial court. Our authority begins and ends with a determination of whether, on the entire record, there is any substantial evidence, contradicted or uncontradicted, which will support the judgment. [citations] Therefore, we must consider all of the evidence in the light most favorable to the prevailing party, giving that party the benefit of every reasonable inference from the evidence tending to establish the correctness of the trial court's decision, and resolving conflicts in support of the trial court's decision.¹⁷

Moreover, where there can be multiple bases for a particular legal finding, the appellant must show an absence of substantial evidence for each basis. For example, the oft-litigated issue of undue influence involves a number of different potential avenues for proving the ultimate issue. As one court explains:

Appellant cannot challenge the court's finding of undue influence by showing only the weakness or absence of evidence of procurement; other factors in combination can also support this finding. To challenge the finding, she must show that the evidence as a whole does not satisfy the general standard for proof of undue influence. We consider that, as a matter of law, her arguments relying exclusively on the one factor of procurement necessarily fail to show a lack of substantial evidence supporting the finding of undue influence.
Our conclusion requires affirmance of the judgment . . . .¹⁸

The deference afforded the trial court under the substantial evidence standard even extends to the inferences deemed to support a given finding. "For, as has so often been said, when opposing inferences may reasonably be drawn from the facts in a case, the findings of the trial court will not be set aside."¹⁹ This is because the reviewing court will make only the reasonable inference that supports the judgment and ignore the equally reasonable one that does not.²⁰ Especially in the context of trusts and estates appeals, there are some related concepts that coincide with the substantial evidence test. In evaluating evidence that might support a conclusion, "[t]he weight to be accorded . . . testimony [is] a matter for the trial court to decide."²¹ Moreover, and relatedly, the heightened "clear and convincing" standard is intended to guide the trial court "and was not intended as a standard for appellate review."²² As the California Supreme Court in Crail v. Blakely noted, "the trial court reasonably could have concluded that [certain specific] testimony failed to satisfy the 'clear and convincing' standard"; but so long as some other substantial evidence supports the opposite conclusion as well (that the standard could be satisfied), the reviewing court must affirm.²³ Put another way, when a finding is made on clear and convincing evidence below, the reviewing court will still analyze the appeal using the basic substantial evidence test.²⁴ When an order is based on factual findings—as is so often the case in the trusts and estates realm—the substantial evidence standard of review makes the appellant's task quite difficult.

The most deferential "abuse of discretion" standard generally arises when a trial court has discretion to choose between two or more options. Common examples of discretionary rulings would include a court exercising its supervisory powers to surcharge trustee fees,²⁵ or the evaluation of the condition of an estate for purposes of determining the appropriateness of a preliminary distribution.²⁶ These types of discretionary decisions will enjoy the benefit of the exceedingly deferential standard on review. Under the "abuse of discretion" standard of review, a reviewing court will disturb the trial court's rulings only upon a showing of "a clear case of abuse" and "a miscarriage of justice."²⁷ The California Supreme Court recently clarified this standard noting: "[t]he discretion of a trial judge is not a whimsical, uncontrolled power, but a legal discretion, which is subject to the limitations of legal principles governing the subject of its action, and to reversal...