Laches Bars Probate Petition; Filing, Not Service, Determines Timeliness of Petition

  Laches is an equitable defense which may be asserted when unreasonable delay in bringing a cause of action results in prejudice. While the statute of limitations specifies the outside time limit within which a cause of action must be brought, laches considers the totality of circumstances surrounding delay, and any resulting prejudice, to deny a remedy when a claimant has “slept on his rights.”

  In order to establish the defense of laches a defendant must prove “unreasonable delay plus either acquiescence in the act about which plaintiff complains or prejudice to the defendant resulting from the delay.” Delay is measured from the time the plaintiff knew, or should have known, about the facts which give rise to the claim. The prejudice may be factual in nature or compromise the presentation of a defense. Prejudice is never presumed: it must be affirmatively demonstrated by the defendant.

  Two recent probate cases illustrate how the doctrine of laches may operate to defeat an otherwise timely petition. In Drake v. Pinkham the court affirmed an order granting summary judgment to defendant based upon the equitable defense of laches. At the outset, the court summarized the rules which are applicable to all summary judgment motions as follows:

  Summary judgment is proper where an action has no merit. A motion for summary judgment will be granted where there is no triable issue as to any material fact and the moving party is entitled to judgment as a matter of law. An action has no merit if a defendant establishes an affirmative defense to each and every cause of action. Initially, defendants have the burden of proof to show that there is a complete defense to the action. The burden then shifts to plaintiff to show that a triable issue of one or more material facts exists as to that defense. On appeal, summary judgment may be affirmed on any correct legal theory, as long as the parties had an adequate opportunity to address the theory in the trial court. An appellate court reviews the grant of summary judgment de novo.

  In Drake the issue was whether a petition to invalidate two amendments to the testator’s revocable trust — based upon the testator’s mental capacity, defendant’s undue influence, and the testator’s understanding of the amendments and the estate — was timely.

  The facts established that petitioner knew, or should have known, of the facts alleged to invalidate the amendments no later than August 2006 but did not file the petition to invalidate the amendments until March 2010, after the testator’s death in October 2009. The court held that petitioner’s failure to bring the action until after the death of the testator was necessarily prejudicial because the testator was an important witness.

  Petitioner argued that under Probate Code sections 17200 and 15800 the challenge was timely because petitioner lacked standing prior to the testator’s death. Generally, only the person holding the power to revoke a revocable trust, and not a beneficiary, has standing to challenge the trust or an amendment. However, pursuant to section 15800, a beneficiary lacks standing to challenge a trust only so long as the “trust is revocable and the person holding the power to revoke the trust is competent.” The facts clearly established that the testator’s competency was questioned by petitioner as early as 2005 in earlier probate proceedings.

  Section 15800 has the effect of postponing the enjoyment of rights of beneficiaries of revocable trusts only until the death or incompetence of the trustee or other person holding the power to revoke. Petitioner, therefore, clearly had standing to bring the petition to invalidate the amendments prior to the testator’s death because she had “the usual rights of trust beneficiaries” if, as petitioner alleges, the testator was incompetent.

  In Straley v. Gamble the issue was whether a petition to determine whether trust distribution had been changed by an amendment was timely under the applicable probate statutes. The petition had been filed within the statutory time period of 120 days from the date the notification by the trustee was served. It had not, however, been served upon the trustee within that same period. The trustee argued that the petition had to be filed and served within the statutory period for it to be timely. The court held that only filing, not service, was required within the 120 day statutory period.

  The court relied on two Probate Code sections. Section 16061.8 which provides, in relevant part: “No person upon whom the notification by the trustee is served pursuant to this chapter . . . may bring an action to contest the trust more than 120 days from the date the notification by the trustee is served upon him.” And, section 17203(a) which provides: “[a]t least 30 days before the time set for the hearing on the petition, the petitioner shall cause notice of hearing to be mailed.”

  The statutory scheme, therefore, did not require petitioner to serve the petition at the time it was filed. Rather, the petition was required to be served only after the clerk set the hearing date on the petition (after it was filed) and at least 30 days before that hearing date. The petition was, therefore, timely filed and served under the applicable statutes.

  The court further concluded that, despite the deferential standard of review, i.e., abuse of discretion, the trial court erred in finding that the petition was barred by laches because there was no indication that the trustee was prejudiced by any sort of delay in the timely filing and subsequent service of the petition.

  These two cases illustrate the importance of proving resulting prejudice when the equitable defense of laches is asserted to an otherwise timely filed cause of action. The burden is on the defendant to prove resulting prejudice from the delay.

  I consult with clients and accept probate and other cases involving the statute of limitations and laches, including probate petitions which allege the invalidity of declarations of trust and amendments due to incapacity and undue influence. For other types of cases I accept, please scroll my Home and My Practice pages. If you are seeking a legal consultation or representation, please give me a call at 818.971.9409. – Michael Daymude

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