Filed 11/16/22 Hudson v. Hudson CA2/7

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

DANIEL HUDSON et al.,

Plaintiffs and Appellants,

v.

KENNON HUDSON,

Defendant and 

Respondent.

 B322589

 (Santa Clara County

 Super. Ct. No. 18PR184315)

APPEAL from an order of the Superior Court of 

Santa Clara County, Julie A. Emede, Judge. Affirmed.

Hopkins & Carley, Steven A. Ellenberg and Ryan D. 

Cunningham for Plaintiffs and Appellants Daniel Hudson and 

Michael Hudson.

McManis Faulkner, James McManis and Abimael Bastid 

for Defendant and Respondent.

________________________
2

Daniel Hudson and Michael Hudson appeal from the 

probate court’s order denying their petition to enforce the no 

contest clause in the 2017 Amendment and Restatement of the 

Robert B. Hudson Trust against their stepmother, Kennon 

Hudson.1 Daniel and Michael contend the probate court erred in 

finding Kennon’s creditor’s claim in the probate proceeding did 

not violate the no contest clause in the trust. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

1. The 2017 Amendment and Restatement of the Robert B. 

Hudson Trust 

In 2007 Daniel and Michael’s father, Robert Hudson, 

established the Robert B. Hudson Trust, which was amended 

several times, most recently on July 12, 2017. The trust stated 

that, upon Robert’s death, the trust assets were to be distributed 

mainly to Kennon, Daniel and Michael. After $10,000 gifts to 

two of Robert’s nephews, Kennon was to receive $350,000 cash, 

the contents of all bank and brokerage accounts, certain real and 

personal property and interests in several partnerships and 

corporations. Daniel and Michael were to receive interests in 

various corporate entities. In addition, certain real estate and 

corporate interests would be held in a qualified terminable 

interest property (QTIP) trust for Kennon’s benefit and, upon her

death, the QTIP trust property would be distributed to Daniel’s 

and Michael’s children or grandchildren. Any remaining assets 

of the trust were to be divided between Daniel and Michael. 

1 Because the parties share the same surname, we refer to 

them by their first names for clarity.
3

The trust contained a no contest clause, which stated, “If 

any beneficiary under this instrument, singularly or in 

combination with any other person or persons, directly or 

indirectly does any of the following acts, then the right of that 

person to take any interest given to him or her by this 

instrument shall be void . . . . [¶] (a) Without probable cause 

challenges the validity of this instrument, or the validity of any 

contract, . . . or other document executed by the settlor . . . . [¶] 

(b) Files a pleading to challenge the transfer of property under 

this trust or a settlor’s will . . . on the grounds that it was not the 

transferor’s property at the time of transfer; [¶] (c) Files a 

creditor’s claim or prosecutes any action against the trust for any 

debt alleged to be owed to the beneficiary-claimant.” 

2. The Last Will of Robert B. Hudson

On July 12, 2017, after signing the trust amendment, 

Robert executed a pour-over will, bequeathing the residue of his 

estate to the trustee of the Robert B. Hudson Trust to be added to 

the trust principal and distributed in accordance with the trust 

provisions. The will contained a no contest clause similar to the 

no contest clause of the trust, including a provision that the no 

contest clause would apply to any beneficiary who “[f]iles a 

creditor’s claim or prosecutes any action against my estate for 

any debt alleged to be owed to the beneficiary-claimant.” 

3. Robert’s Death and Kennon’s Creditor’s Claim

Robert died on December 20, 2017. At the time of his

death, the direct distributions to Kennon under the trust were 

estimated to be worth more than $5 million, the value of assets 

transferred to the QTIP trust were estimated to be approximately 

$15 million and the distributions to Daniel and Michael were 

valued at approximately $4.5 million each. Robert’s share of 
4

community property, valued at approximately $2 million, was 

held for Kennon’s benefit in a different trust not subject to this 

dispute. 

In the two months following Robert’s death Kennon wrote 

two checks to herself for approximately $600,000 from a checking 

account that had become trust property. Kennon later explained 

the payments were reimbursements for living expenses incurred 

by the couple in 2017 that she had paid from her separate 

property. In August 2018 the trustee filed a petition seeking 

return of the $600,000 of trust assets from Kennon. After an 

evidentiary hearing the probate court ordered Kennon to return 

the funds to the trustee, and it appears she complied with that 

order.

On December 17, 2018 Kennon filed a petition for letters of 

special administration, which stated she was “potentially a 

creditor of the decedent[,] and in order to present a proper claim, 

a formal probate proceeding must be commenced.” The probate 

court granted the petition and appointed the trustee as special 

administrator of the estate. On December 19, 2018 Kennon filed 

a creditor’s claim against Robert’s estate seeking reimbursement 

of the $600,000 she had expended for the couple’s living expenses 

in 2017. In July 2019 the special administrator rejected 

Kennon’s claim. Kennon has abandoned the claim, and it is now 

time-barred.

4. The Petition To Enforce the No Contest Clauses in the 

Trust and the Will

On October 18, 2019 Daniel and Michael filed a petition to 

enforce the no contest clauses contained in the trust and the will. 

They contended Kennon’s creditor’s claim in the probate 

proceeding violated the prohibition against filing a creditor’s 
5

claim against Robert’s estate. Further, they argued, because 

there were no assets in the estate, a successful claim against the 

estate could be satisfied only by the personal representative 

seeking payment from the trustee of trust assets. Accordingly, 

Daniel and Michael argued, Kennon’s claim sought funds from 

the trust assets and violated the trust’s prohibition against filing 

a claim against the trust.

In her opposition Kennon argued her claim did not violate 

the no contest clauses because its payment would not affect the 

distribution of trust assets and it was Robert’s intent that she be 

reimbursed for her payment of the couple’s living expenses. 

Kennon submitted a declaration explaining that, during their 

16-year marriage, it was the couple’s practice that Kennon would 

pay their joint expenses and Robert would reimburse her at the 

end of the year. Kennon claimed she was merely acting in 

accordance with that practice when she wrote herself the checks 

after Robert’s death and she had not understood all payments at 

that point had to be made by the trustee. 

Kennon’s opposition also included two documents she 

maintained corroborated her account that Robert annually 

reimbursed her for living expenses. First, Kennon filed a copy of 

the couple’s premarital agreement, which stated Robert would 

pay all living expenses from his separate property funds and 

would not be entitled to any reimbursement from Kennon for 

those expenses. Second, Kennon filed a copy of a declaration 

signed by Robert six weeks before his death. In the declaration

Robert acknowledged that Daniel believed Kennon had been 

improperly withdrawing funds from Robert’s bank and securities 

accounts for more than 10 years. Robert stated he had reviewed 

the accounts in detail with his accountant and his attorney prior 
6

to signing the declaration, and he understood there had been a 

significant increase in yearly withdrawals during the latter 

years. However, Robert declared, “I have no issue and no 

complaint with Kennon receiving the amounts [paid]. I 

wholeheartedly approve her receipt of these funds.” Regarding 

Daniel’s claim Kennon was taking advantage or stealing from 

Robert, Robert stated, “I wholeheartedly reject that claim. I do 

not want, intend or plan to pursue any such claim during my 

lifetime, nor do I want anyone to pursue any such claim after my 

death. As noted above, the sums that went to Kennon have my 

approval and blessing.” Robert’s signing of the declaration was 

witnessed by his attorney. Daniel and Michael objected to the 

filing of the premarital agreement and Robert’s declaration on 

the ground they were inadmissible extrinsic evidence.

5. The Court’s Order and the Appeal

The probate court heard argument from the parties on 

August 19, 2020. The court found it need not consider Daniel and 

Michael’s evidentiary objections because “the information I need 

to consider is contained in the trust document itself, as well as 

the papers that have already been filed with the Court in the 

estate matter.” 

During the hearing Kennon’s counsel conceded the no 

contest clause in the will was violated by the filing of Kennon’s 

creditor’s claim in the probate matter but maintained that action 

did not trigger the no contest clause in the trust. The court

agreed, stating, “I believe the no contest provision requires the 

creditor’s claim to be made against the trust. If Ms. Hudson had 

proceeded with her creditor’s claim, obtained a judgment, and 

then went against the trust, now I think we’re having a very 

different conversation. But that is not what happened in this 
7

particular case.” Accordingly, the court entered an order finding 

Kennon had violated the no contest clause of the will but not that 

of the trust. Daniel and Michael filed a timely notice of appeal 

from the court’s order.2

DISCUSSION

1. Governing Law and Standard of Review

“No contest clauses, whether in wills or trusts, have long 

been held valid in California. [Citations.] Such clauses promote 

the public policies of honoring the intent of the donor and 

discouraging litigation by persons whose expectations are 

frustrated by the donative scheme of the instrument. [Citation.] 

[¶] In tension with these public policy interests are the policy 

interests of avoiding forfeitures and promoting full access of the 

courts to all relevant information concerning the validity and 

effect of a will, trust, or other instrument.” (Donkin v. Donkin

(2013) 58 Cal.4th 412, 422; see also Burch v. George (1994) 

7 Cal.4th 246, 255.) In light of these opposing interests both the 

statutory and common law recognize no contest clauses must be 

“‘strictly construed and may not extend beyond what plainly was 

the testator’s intent.’” (Meyer v. Meyer (2008) 162 Cal.App.4th 

983, 991; see Donkin, at p. 422 [“the common law in California 

recognized the enforceability of no contest clauses, albeit strictly 

construed”]; Burch, at p. 256 [“[f]ollowing the rule of strict 

construction [citation], we must ascertain from these provisions 

whether [the trustor] unequivocally intended that [the 

beneficiary] would forfeit the distribution provided for her under 

the trust instrument”]; Scharlin v. Superior Court (1992) 

2 Pursuant to an order of the Chief Justice on August 9, 

2022, this matter was transferred from the Sixth District Court 

of Appeal to the Second District Court of Appeal.
8

9 Cal.App.4th 162, 169 [“‘[o]nly where an act comes strictly 

within the express terms of the forfeiture clause may a breach 

thereof be declared’”]; see also Prob. Code, § 21311, subd. (a) [“[a] 

no contest clause shall only be enforced against the following 

types of contests: [¶] . . . [¶] (3) The filing of a creditor’s claim or 

prosecution of an action based on it. A no contest clause shall 

only be enforced under this paragraph if the no contest clause 

expressly provides for that application”].)

“‘“Whether there has been a ‘contest’ within the meaning of 

a particular no-contest clause depends upon the circumstances of 

the particular case and the language used.”’” (Meyer v. Meyer, 

supra, 162 Cal.App.4th at p. 991.) We review the language of the 

trust de novo unless its interpretation depends upon the 

credibility of extrinsic evidence or a conflict therein. (Burch v. 

George, supra, 7 Cal.4th at pp. 254-255; Key v. Tyler (2019) 

34 Cal.App.5th 505, 540.)

2. The Trial Court Did Not Err in Concluding Kennon’s 

Creditor’s Claim Against the Estate Did Not Constitute a 

Claim Against the Trust

As discussed, the no contest clause in the 2017 Amendment 

and Restatement of the Robert B. Hudson Trust applies to a 

beneficiary who files a creditor’s claim “against the trust.” Daniel 

and Michael acknowledge Kennon’s claim was filed only in the 

probate proceeding rather than directly against the trust, but 

argue it nonetheless triggered the clause because “the purpose 

and effect of the creditor’s claim [was] to initiate a legal process 

for the recovery of trust assets.” While this may have been the 

purpose and effect of the creditor’s claim if successful, the plain 

meaning of the phrase “against the trust” is not reasonably 

susceptible to the expansive definition proposed by Robert’s sons, 

nor is there any indication Robert intended the provision to 
9

disinherit anyone who filed a creditor’s claim that had the 

potential to impair the trust. 

This common sense interpretation of the no contest clause 

is reinforced by the fact that Robert, had he intended to void the 

trust distribution to any beneficiary who filed a creditor’s claim 

against the estate or a claim that could ultimately be satisfied by 

trust assets, could have easily, and explicitly, done so. In fact, 

unlike the prohibition on creditor’s claims, other sections of the 

no contest clause include language expanding their prohibitions 

beyond challenges to the trust itself. The paragraph prohibiting 

challenges to the validity of the trust states a beneficiary may 

not, without probable cause, challenge “the validity of this 

instrument, or the validity of any contract, agreement (including 

any trust agreement), declaration of trust, beneficiary 

designation, or other document executed by the settlor.” The 

next paragraph states a beneficiary may not file a pleading to 

challenge the transfer of property “under this trust or a settlor’s 

will.” Robert, however, did not use similar expansive language in 

the paragraph concerning creditor’s claims. 

Daniel and Michael’s reliance on the no contest clause’s 

prohibition on a beneficiary “directly or indirectly do[ing] any of 

the following acts” is unavailing. They argue this language is 

triggered by any creditor’s claim that indirectly sought the assets 

of the trust. However, the words “directly or indirectly” do not 

modify the phrase “against the trust,” they modify the act of 

filing the claim. In other words, a beneficiary who indirectly files

a creditor’s claim against the trust, perhaps through a guardian 

ad litem or a corporate entity, would trigger the no contest 

clause. However, a claim that is indirectly against the trust, 

perhaps filed against the estate or a business entity associated 
10

with the decedent, even if it may ultimately be paid by trust 

assets, would not trigger the no contest clause here.

Finally, Daniel and Michael argue that failing to find 

forfeiture here creates a loophole allowing beneficiaries to file 

creditor’s claims against empty probate estates and then seek 

payment from trust assets as a way to avoid triggering the no 

contest clause of a decedent’s trust. This argument is not 

compelling. First, as discussed, trust settlors can easily avoid 

this hypothetical result by including more expansive language in 

their trust documents. Second, a beneficiary who follows this 

procedure would still be required to seek recourse against the 

trust for payment of the claim. Such a demand for payment, 

whether made through the trust claims procedures set forth in 

the Probate Code (see Prob. Code, § 19000 et seq.) or by a request 

for payment from the estate’s personal representative pursuant 

to the applicable provisions of the trust document, would 

constitute a creditor’s claim against the trust and would trigger 

the no contest clause.

In sum, the plain meaning of the trust language in this 

case does not demonstrate an unequivocal intent on Robert’s part 

to disinherit a beneficiary who files a creditor’s claim against the 

probate estate. 
11

DISPOSITION

The order of the probate court is affirmed. Kennon is to 

recover her costs on appeal.

PERLUSS, P. J.

We concur:

SEGAL, J.

FEUER, J.