Trust and Estate Litigation: Property Disputes Attorneys in Orange County

In cases involving real property, it’s important to note that either party has the option to file a notice of the pendency of the proceeding, also known as a “lis pendens.” These procedures are the same as those governing lis pendens in civil actions in general.

While filing and recording a lis pendens is not mandatory, it is generally advisable to do so. This is because, once the notice is properly recorded in the county where the subject real property is located, it serves as constructive notice to the public regarding the pending proceeding. In essence, it alerts “the world” to the ongoing legal action, effectively preventing subsequent claims by bona fide purchasers.

In Section 850 proceedings, notice of the hearing on the petition must be provided to specific parties in the following manner:

i. Minimum 30 Days’ Notice by CCP § 413.10 et seq. Service:

At least 30 days before the hearing, the petitioner is required to serve notice and a copy of the petition according to the procedures outlined for the service of a civil summons under CCP § 413.10 et seq. This service must extend to the personal representative and anyone asserting an interest in or claiming title to or possession of the property, except for those who are also petitioners themselves.

ii. Notice under Probate Code Section 1220:

In addition to those individuals who must be served under Section 851(a) (as described above), a minimum 15 days’ notice of the hearing along with a copy of the petition must be provided in accordance with Probate Code Section 1220. This notice should be delivered personally, electronically, or by mail as specified in Probate Code Section 1215 to the persons listed in Probate Code Section 1220 and to each “known” heir and devisee whose interests in the estate would be impacted.

iii. No Shortening of Notice:

Unlike most probate matters where the court has the authority to shorten the minimum notice period with a showing of “good cause,” Section 850 proceedings are an exception. The court is explicitly prohibited from shortening the time for giving notice of the hearing under Section 851.

iv. Content Requirements:

The notice must contain the following essential elements:

a) A description of the property in question, providing sufficient details to notify any party with an interest in the property. For real property, the notice must include the street address, or if unavailable, a description of the property’s location and assessor’s parcel number.

b) A description of the relief being sought under Probate Code Section 859, adequately informing the party against whom relief is requested.

c) A statement advising any person interested in the property that they have the option to file a response to the petition.

v. Proof of Notice Given:

As with all probate petitions that require a noticed hearing, proof of proper service and the required mailed notice in accordance with Section 851 must be provided to the court’s satisfaction before or during the hearing.

It’s essential to ensure compliance with these notice requirements as they play a critical role in the Section 850 proceedings. However, keep in mind that California Superior Court’s local rules may impose additional content requirements.

To initiate a Section 850 action in probate proceedings, a verified petition must be filed with the court where the probate is being administered, as per Probate Code Section 850(a)(2) and (b). This petition must provide a clear presentation of the facts supporting the claim. The filing of the petition can be done by the personal representative or any “interested person,” which includes heirs, beneficiaries, or creditors. If the personal representative fails to file the action, another interested party can take the initiative. There is no statutory time limit for filing the petition, and it can be initiated until the final distribution and closure of the estate. Notably, the court retains authority to consider a Section 850(a)(2) petition even after the subject property has been sold to a bona fide purchaser, in which case the petition may relate to the sale proceeds held by the estate.

The statute of limitations that applies to the underlying claim in the Section 850 petition corresponds to the limitations period that would be applicable in a standard civil suit. However, it’s uncertain whether this period is further constrained by the provisions of CCP Sections 366.2 or 366.3, which prescribe one-year limitations periods triggered by the decedent’s death. The outcome may depend on the nature of the claim underlying the Section 850 action.

While the statutory framework does not mandate a specific form or content for the petition, California Superior Courts have local court rules impose particular requirements that should be followed to avoid dismissal or a request for amendment. At the very least, the petition should provide sufficient details to enable the court to establish jurisdiction over the dispute and to reveal the basis for the petitioner’s superior claim to title or possession.

In a Section 850 proceeding, double damages equivalent to twice the value of the property recovered for the estate may be awarded, along with reasonable attorney fees and costs, if the defendant is found to have acted in bad faith by wrongfully taking, concealing, or disposing of the property. This applies not only to bad faith actions but also to cases involving undue influence in bad faith or elder or dependent adult financial abuse.

In probate proceedings, it’s crucial to establish that the decedent had a valid claim to the property in question at the time of their passing, as Section 850 jurisdiction is only applicable in such cases. If the claim was still in an incomplete or “inchoate” state when the decedent passed away, it may not be sufficient to entitle the estate to initiate legal action. For instance, in the case of an attorney’s contingency fee contract with a company, if the contract’s claim for fees depended on an event occurring after the attorney’s death, it could not be litigated in a Section 850 proceeding.

In third-party actions, unrecorded security interests typically do not provide a basis for a Section 850 petition, as the courts have consistently limited standing to third-party claimants seeking declarations of title, ownership, or possession. For instance, the beneficiary of a trust deed securing a promissory note may not bring a Section 850 action against the estate, as their interest is often too remote to claim the property itself. However, a third-party judgment creditor claiming under a judgment lien may utilize a Section 850 proceeding to address whether the subject property is properly part of the probate estate, particularly if the property was owned as a joint tenant, which would exclude it from the estate.

It’s important to note that the scope of standing in Section 850 proceedings may have evolved over time, with certain earlier cases having less persuasive effect in determining current standing parameters. Today, a creditor of the estate is often presumed to qualify for initiating a Section 850 proceeding. Additionally, the probate court’s general jurisdiction, as established by Probate Code Section 800, has expanded, rendering some prior law no longer applicable.

In the past, superior courts presiding over probate matters did not have the authority to adjudicate disputes related to property titles. Their jurisdiction was limited to assets that unequivocally belonged to the deceased individual or their estate. Importantly, third-party claimants were not allowed to be involved in these proceedings, as they did not have a direct legal connection (“privity”) with the estate.

Over time, exceptions emerged to allow individuals who could demonstrate a legal connection (“privity”) with the estate, such as heirs, beneficiaries, or appointed representatives acting on behalf of the estate, to address their property title disputes within probate proceedings.

Recognizing the efficiency of resolving entire disputes within a single legal process, the Legislature expanded these exceptions, effectively eliminating the historical limitations. Now, all title disputes and adverse claims, including those involving parties unrelated to the estate, can be addressed within the probate proceeding as per Probate Code Section 850(a)(2). Indeed, a petition under Probate Code Section 850 is so versatile that many other claims relating to property can also be brought within probate proceedings.

Notwithstanding, property disputes relating to trust and estate property still can be filed in civil court, but there are many benefits to filing the same disputes in probate court. Filing a property dispute in probate court can be beneficial due to its specialization in estate and trust matters, streamlined procedures, and expertise in fiduciary duties. Probate courts have jurisdiction over property disputes related to estates and can ensure a more efficient and knowledgeable resolution. This specialized approach can be advantageous for cases where the primary concern is estate-related property issues and the protection of heirs and beneficiaries.