A California Trust Beneficiary May Sue an Out of State Trustee in California Court
In general, trust litigation must be brought in the jurisdiction in which the trustee resides. However, in some situations a trust beneficiary may bring a lawsuit in a California court even though the trustee lives out of state. A recent California case, Buskirk v. Buskirk (2020) (“Buskirk”), has made this easier to do. Buskirk extends the application of California’s “long-arm” statute, so called because it allows California courts to assert jurisdiction over residents of other states based on certain “minimum contacts” with California.
In Buskirk, a California beneficiary sued an out of state trustee who had significant ties to California. The facts in Buskirk are disputed and volatile, but this much is agreed on: the trustee had deep roots in California and had litigated in California courts after leaving the state, and the subject of the trust litigation was primarily California real estate owned by the trust. Ultimately, the appellate court found that the three prongs of the test for specific personal jurisdiction in a California court had been satisfied. The Buskirk ruling opens the door for other California trust beneficiaries to bring suit in California courts against out of state trustees and trust beneficiaries.
A “Blazing Family Dispute” – The Facts
Ellen Van Buskirk (“Ellen”) and her husband executed a revocable trust in 2005, shortly before he died. Both settlors were California residents, the trust was created in California, and the document specified that California law was to control. After Ellen’s husband died, Ellen amended the trust to name successor trustees. She named her son, Walter Van Buskirk III, (“Walter”) a California resident, as first successor trustee, and her twin daughters (“the Twins”), both long-term Idaho residents, as second successor trustees. At some point Ellen’s brother, Charles Bluth (“Charles”), began unofficially assisting Ellen to carry out her duties as trustee. Charles was a Nevada resident.
The rest of the facts in Buskirk are hotly disputed and highly divergent: Walter states that the Twins came to California and “kidnapped” Ellen, taking her to Idaho against medical advice. He goes on to state that the Twins blocked his subsequent attempts to visit Ellen in Idaho, doing so by “threats of violence.” The Twins’ story is entirely different, painting Walter as a degenerate ne’er-do-well who lived off the family wealth and physically abused Ellen in an attempt to speed her demise in order that he might receive his inheritance faster. The Twins claim that they “rescued” Ellen by taking her with them to Idaho. Ellen states that she left the medical facility and went with the Twins to Idaho of her own free will.
All of the parties agree that after the rescue/kidnapping Ellen permanently moved to Idaho and registered the trust there. Also undisputed is the fact that Ellen subsequently sold several pieces of trust-owned real estate located in California, and that she filed at least three separate lawsuits in California court related to trust-owned real estate, including an unlawful detainer action against Walter. Finally, Ellen’s actions as trustee after her move to Idaho effectively cut Walter out of the trust as a beneficiary.
Walter brought suit against Ellen, the Twins, and Charles in California court, seeking the removal of Ellen as trustee and of the Twins and Charles as participants with Ellen in her mismanagement of the trust. Ellen and the other parties moved to quash Walter’s petition for lack of personal jurisdiction, and sought dismissal of his petition. They argued that any trust litigation should be brought in Idaho because the trustee was an Idaho resident, the trust was registered in Idaho, and the Twins were Idaho residents.
Where is Jurisdiction Proper?
The court set aside what it described as a “blazing family dispute” and focused only on the question of proper jurisdiction. The trial court granted Ellen’s motion to quash and stated that Walter had failed to establish the required “minimum contacts” with California for a California court to have jurisdiction over the parties. The appellate court reversed.
The foundational rule, stated in a nutshell, is this: Jurisdiction over an out of state individual is proper if that individual has minimum contacts with the state such that the lawsuit does not offend traditional notions of fair play and substantial justice. There is a three-pronged test to determine if a court has proper jurisdiction. Jurisdiction is proper where: (1) defendants have purposefully availed themselves of forum benefits; (2) the controversy relates to the defendants’ contacts with the forum; and (3) the exercise of jurisdiction comports with fair play and substantial justice. (Pavlovich v. Super. Ct. (2002) 29 Cal.4th 262, 269.) Each of these three prongs are discussed below. If each of the three prongs are satisfied, the court will have jurisdiction over the out of state individual and may properly hear the case.
- Did the Parties Purposefully Avail Themselves of the Forum Benefits?
As trustee in the Buskirk trust, Ellen was a life-long California resident who purposefully took advantage of California laws by forming a California trust and becoming the trustee of that trust. She was the central figure in the trust and chose California law to govern the trust. Ellen funded the trust with California real property. Even after she moved to Idaho, Ellen availed herself of the benefits of the California court system, filing three separate lawsuits in California courts while residing in Idaho.
Similarly, the Twins were successor beneficiaries and successor trustees of a trust which originated in California, was governed by California Law, and was funded by and continued to own California real property. Further, the Twins openly acknowledged their own significant involvement in the trust transactions, despite their residence in Idaho. Finally, the Twins – or their agents – physically traveled to California to bring Ellen to Idaho; this move was what triggered the subsequent trust changes disinheriting Walter. Charles was similarly engaged in the process of the trust management as well as in assisting in moving Ellen from California to Idaho.
Ultimately the appellate court found that the trust in Buskirk was “embedded in California” and was managed by the out of state parties in such a way as to avail themselves of the benefits and obligations of the California legal system.
- Is the Controversy Related to the Parties’ Contacts with Forum?
Walter’s cause of action related to the parties’ contacts with California because he claimed that their actions relative to the California trust assets were harmful to the trust and to himself as a beneficiary.
- Is the Proposed Exercise of Jurisdiction Just and Reasonable?
This prong of the test is the most subjective. Here, the appellate court held that litigating the matter in California was fair. In weighing the justice and reasonableness of litigating this action in California, the appellate court considered the following factors: the burden on the defendants, California’s interests in hearing the dispute, Walter’s interest in obtaining convenient and effective relief, judicial economy, and the states’ shared interest in furthering fundamental substantive social policies. The court noted that Ellen had litigated multiple matters in California after moving to Idaho, and that the Twins or their agents had physically traveled to California to move Ellen to Idaho. Further, the litigation centered on a California trust, governed by California law, with California assets.
Ellen argued that litigating in California was unduly burdensome due to her age and the fact that one of the Twins was battling cancer. The court disagreed, holding that these factors did not outweigh the natural ties to California and interests in litigating here. The court emphasized the fact that trial judges and attorneys regularly make accommodations for parties as needed, and that technology has reduced and in some cases even eliminated the burden of travel. These factors “soften” the burdens of age and illness. The court also noted that Walter’s counsel had agreed during oral argument to enter into “reasonable and loving stipulations” to minimize the burdens of the litigation on Ellen and the Twins.
The Impact of Buskirk on the Trust Litigation Landscape
Buskirk broadly interprets the California long-arm statute, effectively allowing a California resident trust beneficiary to sue an out of state trustee in California court in a broader range of situations. Before you run off to the courthouse to file papers, however, this is not a wide-open door. A petitioner must still satisfy the three prongs of the test for personal jurisdiction, proving that the sued parties have had the “minimum contacts” with California required to be subject to jurisdiction here.
Litigating a trust dispute is a long process even without fighting over jurisdiction questions, and it is worth being sure you are in the proper court before filing suit. Our California litigation attorneys regularly litigate trust disputes. Call us at (916) 603-2607 to schedule a consultation today – we will make sure your case is filed in the proper court, provide a streamlined and effective litigation process, and pursue justice on your behalf.