Urick v. Urick: (re)opening the Floodgates of Trust Contests

• Publication year: 2019
• Author: By Craig S. Weinstein, Esq.

URICK V. URICK: (RE)OPENING THE FLOODGATES OF TRUST CONTESTS

By Craig S. Weinstein, Esq.^*

I. INTRODUCTION

As long as people have been able to draft testamentary instruments, heirs and beneficiaries have fought over whether those instruments are valid. As a means of protecting one's testamentary disposition, California common law has permitted the enforcement of no contest clauses for more than 100 years.¹ While the law regarding no contest clauses—or in terrorem clauses—has evolved, been codified, amended, and ratified over the years, such clauses have long remained a valid basis for disinheriting beneficiaries.²

The rationale for enforcing no contest clauses makes sense. They promote the sound policy that testators are free to dispose of their property however they see fit, while also discouraging litigation by those whose expectations are frustrated by the donative scheme in the instrument.³ Ultimately, a contestant must decide whether the fight to potentially receive more from a decedent's estate or trust outweighs the risk of losing some or all of what the contestant would have received under the estate plan.

Allowing the enforcement of no contest clauses creates tension between the policies of honoring the intent of the donor and discouraging litigation on the one hand, and the policies of "avoiding forfeitures and promoting full access to the courts to all relevant information concerning the validity and effect" of testamentary instruments on the other.⁴ After all, an instrument procured by improper means, such as fraud or undue influence, does not represent the testator's free will and disposition of his or her assets. The tension between these concepts is a key reason that no contest-clause law in California has evolved and changed significantly over the last century.⁵

However, the evolution of the law on no contest clauses likely did not contemplate the expanded scope and use of California's "anti-SLAPP" statute. Why would it be considered? "SLAPP" refers to a Strategic Lawsuit Against Public Participation, a civil lawsuit aimed at preventing one's right to petition or free speech under the United States or California Constitution in connection with a public issue.⁶ Enacted in 1992, Code of Civil Procedure section 425.16⁷ is California's anti-SLAPP statute, which on its face has no bearing on trust or will contests. Although it was initially designed to prevent lawsuits aimed at chilling one's freedom of speech, the opportunity to bring a motion under the anti-SLAPP statute appears to have increased litigation as opposed to limit it as the Legislature hoped it would.⁸ It was only a matter of time before the anti-SLAPP statute's unintended effect of increasing litigation found its way into the world of no contest clauses.

In 2017, many trust and estate lawyers were caught off guard by the Court of Appeal's opinion in Urick v. Urick.⁹ There, the court determined that a petition to enforce a no contest clause is subject to being stricken under the procedure set forth in the anti-SLAPP statute because the filing of a petition to enforce a no contest clause arises out of "protected activity."¹⁰ With that ruling, one of the key policies supporting the enforcement of no contest clauses—to discourage litigation—was turned on its head. Now probate courts, their judicial officers, and the Legislature must figure out how to reconcile these competing policies.

This article first discusses the historical application of the anti-SLAPP statute and the policy behind it. Second, the article discusses the enforcement of no contest clauses in California, and how the policies behind the law's evolution contrast with the anti-SLAPP lawsuit. Third, after discussing the Urick court's analysis regarding these competing policies and the practical impact of that ruling, the article suggests that the Legislature should intervene by passing legislation exempting trust and will contests from anti-SLAPP protection.

II. COMPETING POLICIES OF CALIFORNIA'S ANTI-SLAPP STATUTE AND NO CONTEST LAW

A. The Anti-SLAPP Statute 1. Historical Policy Behind the Anti-SLAPP Statute

In 1992, the California Legislature enacted the anti-SLAPP statute to protect the constitutional right of freedom of speech. Concerned that overly zealous litigants were using the courts to chill the valid exercise of this right, the California Legislature found and declared that "it is in the public interest to encourage continued participation in matters of public significance, and that this participation should not be chilled through abuse of the judicial process."¹¹ With that proclamation and the enactment of the anti-SLAPP statute, the Legislature established a civil remedy for people who faced lawsuits arising out of their First Amendment rights. In essence, the anti-SLAPP statute permits a litigant to bring a special motion to strike to dispose of claims or entire lawsuits that arise out of the defendant's exercise of his or her freedom of speech.¹² The anti-SLAPP statute's far-reaching protections were expanded five years later when the Legislature amended the statute to specifically state that it is to be construed broadly, thereby greatly expanding the types of "speech" that are protected.¹³ With this instruction to California courts, the anti-SLAPP statute permitted litigants and judicial officers to utilize the statute as the expansive procedural shield (and sword) that it is today.

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The anti-SLAPP statute disposes of claims that are brought "to interfere with the defendant's ability to pursue his or her interests."¹⁴ By infringing on a person's right to petition or right of free speech, a SLAPP suit, if allowed to progress, "achieve[s] its objective if it depletes defendant's resources or energy. The aim [of a SLAPP plaintiff] is not to win the lawsuit but to detract the defendant from his or her objective which is adverse to the plaintiff."¹⁵ To remedy this, Section 425.16 allows litigants to bring a special motion to strike as a procedural remedy to resolve a lawsuit aimed at chilling a party's free speech, early and expeditiously.¹⁶ The special motion to strike will be granted if the proponent, typically a defendant, can show that the lawsuit is within the statute's ambit (i.e., arises out of protected activity) and the plaintiff cannot establish a probability that he or she will prevail on the claims asserted.¹⁷

Four specifically delineated categories of petitioning activity are protected under the statute: "(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law, (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest, or (4) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest."¹⁸ An "issue of public interest" does not need to be "significant" for the related activity to be protected by the anti-SLAPP statute.¹⁹ Even more, the categories enumerated in the anti-SLAPP statute are not all-inclusive. Indeed, the statute specifically states the "speech" identified in subdivision (e) "includes" the four identified areas. By using this language, the Legislature indicated that other petitioning activity or expressions of free speech could be protected under the statute.²⁰ Courts have held that numerous other expressions of free speech not specifically identified in the statute are protected.

Since the initial passing of the anti-SLAPP statute, as well as the amendment instructing courts to interpret the statute "broadly," California courts have done as they were told. Indeed, many of the reported California SLAPP cases involve the typical right to petition or free speech scenarios. For example, the filing of a lawsuit undoubtedly falls within the anti-SLAPP statute's protection.²¹ Section 425.16 also protects statements made before regulatory bodies,²² malicious prosecution claims against attorneys and their clients,²³ and statements made by an alleged victim of child abuse to the victim's parents and police.²⁴ Beyond that, the anti-SLAPP statute has been used to protect a person against a claim for libel based on his political contributions,²⁵ and to protect a politician from a libel claim based on mailers that contained allegedly defamatory statements about his opponent.²⁶ Indeed, most lawyers would recognize that these activities are protected under a plain reading of the statute.

But courts have found less obvious conduct to be protected "petitioning activity." This protected activity includes statements and writings by a city port district commissioner regarding a corporate development plan that were the basis of the developer's claims for inducing breach of contract and tort,²⁷ a former insurance agent's comments on her website regarding an insurance broker's business practices,²⁸ and a publication synthesizing information on a stress medication.²⁹ In fact, even when a plaintiff alleges wrongdoing that arises out of both protected and unprotected activity, anti-SLAPP protection may be available to strike some or all of the causes of action.³⁰

These examples illustrate how the anti-SLAPP statute "can and does apply to suits bearing very little relationship to SLAPP litigation."³¹ Just as their civil litigator colleagues have done, probate court practitioners have also used the anti-SLAPP statute to fend off claims arising out of petitioning activity.³² While the anti-SLAPP statute has been applied in probate cases for years,³³ it was not until Urick that the contrast between the competing policies behind the anti-SLAPP...