Filed 11/20/14 Gaynor v. Buhlen CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE
STATE OF CALIFORNIA

DOROTHY W. GAYNOR et al., Plaintiffs and Respondents,

v. E.H. BULEN et al., Defendants and Appellants. D064872

(Super. Ct. No. PN16579)

APPEAL from an order of the Superior Court of Sa n Diego County, Richard G. Cline, Judge. Affirmed. Law Office of A. Daniel Bacalski, A. Daniel Bacalski, Jr.; Dube Law Office, Douglas A. Dube; Karcher Harmes and Kathryn E. Karcher for Defendants and Appellants. Jay-Allen Eisen Law Corpor ation, Jay-Allen Eisen, Aa ron S. McKinney; Witham Mahoney & Abbott, Daniel W. Abbott, Matthew M. Mahoney and Charles B. Witham for Plaintiffs and Respondents.2 INTRODUCTION E.H. Bulen and Christopher Bulen (collectively the Bule ns), the former cotrustees of a family trust, appeal an order awarding attorney fees to th eir cousins, Dorothy Gaynor, James Wilmot, Michelle Gaynor an d Max Gaynor (collectively the Gaynors) who prevailed in a probate action regarding in terpretation and administration of the Bulen Trust (Trust). The court determined the te rms of the Trust required appointment of a neutral corporate successor trustee to admini ster the Trust rather than a committee of family members serving as cotr ustees, which is what had oc curred for decades. The court then appointed a corporate trustee that assu red the court it will follow the express terms of the Trust and make income distributio ns sprinkling among the generations of beneficiaries, as opposed to the long-standing practice of the former cotrustees to only distribute income to the most senior generati on of beneficiaries. The trial court awarded the Gaynors attorney fees afte r it concluded their efforts re sulted in obtaining access to Trust fund income for younge r generations, which previous ly was unavailable. We affirm, concluding the trial court properly exer cised its equitable disc retion to award fees under the common fund doctrine.3 FACTUAL AND PROCEDUR AL BACKGROUND Background of the Trust
The Trust was established in 1968 by Edwin Bulen, 1 the ancestor of the appellants and respondents. The Trust holds several pa rcels of real estate comprising a 44-acre commercial shopping complex in Escondido, California. Te nants include Home Depot, Wal-Mart, CT Storage, AutoZone , Wells Fargo and Chase Bank. At the time of trial, the Trust's real estate hol dings were valued at approximatel y $13 million, with a net value of approximately $7.5 million. The Trust pro duces about $1.2 milli on in annual gross income, of which approximately $ 360,000 is distributed annually. Edwin was the initial trustee and he ame nded the Trust six times before his death in 1983. Edwin's heirs incl uded his three children: Willia m H. Bulen (Bill), James A. Bulen (Jim), and Mary C. Wilmot (aka Mary C. Bulen). According to the terms of the Trust, it is divided equally be tween Edwin's three children, with sub-shares set apart for each of their issue. The Trust is divided into subparts as each beneficiary di es leaving issue until 21 years after the death of the last child or grandchild living at the time of Edwin' s death. At that time, the Trust terminates and the principal is distributed. The last me mber of the family born before Edwin's death was born in 1980. The family estimates the Trust will continue to operate another 70 to 80 years.

1 Where necessary for clarity, we refer to Edwin and his descendants by first names. We intend no disrespect.4 Paragraph 2.8 of the second amendm ent to the Trust declaration directs distribution of the net income of the Trust: "T rustee shall from time to time pay all of the net income, in such amounts and proportions (whether equal or unequal) as the Trustee may, in the Trustee's discretion determine, to such one or more members of a class consisting of such beneficiar y and such beneficiary's issu e, of whatever degree and whenever born, livi ng from time to time during the lifetime of such beneficiary." Edwin's sons, Bill and Jim, disclaimed thei r beneficial interests in the Trust, so their shares were divided between their children. Mary retained her beneficial interest. The sixth amendment modified paragraph 4.1 of the Trust regarding the trustee succession. After Edwin, Bill was to serve as successor trustee, followed by Edwin's accountant, William Stevenson, and finally by San Diego Trust & Savings Bank (San Diego Trust). Paragraph 4. 4 of the second amendment, which was not amended, provided any subsequent successor trustee af ter San Diego Trust "m ust be a corporation authorized under the laws of the United States or of the State of California or any other state to administer trusts and have total cap ital, surplus and undivi ded profits of not less than $20 million." Family Agreement Regard ing Successor Cotrustees When Bill resigned as trustee in 1990, he asked Edwin's accoun tant and San Diego Trust, to decline to serve as successor cotrustees. The fa mily agreed to a proposal whereby a committee of three fa mily members, one each from each branch of the family, would act jointly as successor cotrustees. Each branch's representative trustee had5 exclusive control over distribu tions within his or her bran ch; no trustee could distribute his or her branch's share to family members who were not in the same branch. Bill filed an unopposed petition, which the court granted, appoin ting the first three cotrustees to serve "together, but not alone . . . ." Initially, the three cotrustees were Bill's son, Neal B. Bulen; Jim's daughter, Ann E. Dechairo; and Mary's daughter, Dorothy W. Gaynor

 one trustee from each branch of the family. Over the next 20 years, wh en one of the cotrustees resigned or died, the remaining cotrustees filed unopposed pe titions with the court to appoi nt a replacement cotrustee, maintaining representation from each branch of the family. With only one or two exceptions, the cotrustees distributed the annu al Trust income to the senior class, or generation, of beneficiaries. Litigation Regarding Trust Administration In 2011, the cotrustees were Jim's son, Edwin H. Bulen (E.H.), Bill's grandson, Christopher Bulen (Chris) and Mary. E.H., Chris, and Mary, filed a petition to modify the Trust under Probate Code section 15409. They asked the court to: (1) eliminate paragraph 4.4, which requires ap pointment of a corporate trus tee; (2) modify the process by which cotrustee vacanci es are filled to permit a majority of the senior generation to appoint a person to fill the vacancy rather than require court approval; (3) add a new paragraph to require three fam ily members to serve as cotrus tees; and (4) clarify no bond is required for family cotrustees. Mary's daughter, Dorothy, opposed the pe tition to modify the Trust contending the petition did not meet the require ments for modification, the pr oposal did not comply with6 the original agreement among the fam ily members, and the proposal would disenfranchise contingent beneficiaries of the Trust. Mary resi gned as cotrustee and withdrew her participation in the petition for modification. 2 Dorothy's brother, James Wilmot, along with Dorothy's son, Max Gaynor, and daughter, Michelle Gaynor, joined Doro thy's objection and amended opposition contending the conditions for modification u nder Probate Code se ction 15409 did not exist and the petition for modification was file d based on the personal motives of the cotrustees and did not benefit the trust. After a bench trial, the trial court gran ted a motion for judgment in favor of the Gaynors on the petition to modify the trust, th ereby denying the pet ition to modify. The court stated, "Article 4 of the trust govern s appointment of successor trustees. [¶] Paragraph 4.4 requires appointment of a su ccessor corporate trustee. That provision applies to the present circumstance. This pa ragraph has never been modified; it has been artfully avoided. [¶] While adherence to what we call 'a family agreement' may have been beneficial, the court makes no findings as to its merits or its de ficiencies. [¶] For about 20 years the family ha s appointed individual successor trustees pursuant to an informal agreement that is cont rary to the plain terms of the trust. [¶] The procedures followed and the orders issued did not perman ently repeal, modify, or render ineffectual the provisions of paragraph 4.4. To hold otherwise wo uld, among other things, be a violation of the rights of unborn and unrepresented beneficiaries."

2 Mary, apparently, was in ill health.7 The court found the Bulens did not estab lish they are entitled to modify paragraph 4.4 to eliminate the requirement of a corporat e trustee under Probate Code section 15409. The court observed the change in circumstance is "a direct result of the deviation from the provisions of the trust by th e family. [¶] The use of a provision contrary to the terms of the trust has now resulted in dissension within the family. The trust contains specific provisions designed to avoid dissension of the type present here; that is, over the selection of a successor trustee. [¶] The pr esent controversy, while unfortunate and not necessarily anticipated by the fa mily, was specifically contem plated by the trustor. What the trustor did not anticipate was the failu re to follow the trust terms." The court concluded there was insufficient evidence the selection contr oversy substantially impaired the operation of the Trust and the ci rcumstances were not the type contemplated by Probate Code section 15409 fo r modification of the Trust. Prior to trial, the Gaynors filed a petition to remove the Bulens as cotrustees and to appoint a corporate trustee in accordance with the Trust lang uage. The Gaynors provided documents from two financial institutions cons enting to act as a successor trustee, First American Trust, FSB (First American), a nd First Foundation Bank (F irst Foundation). Both indicated they would open eligibility for annual Trust distributions to beneficiaries of all generations rather than limiting distributions to the se nior generation. The petition for appointment of corporate trustee pr ayed for attorney fees and costs. The Bulens objected to court appointmen t of a corporate trustee arguing the Trust allowed a "majority of the income beneficiarie s of the trust . . . to change the corporate trustee." The Bulens stated they would resi gn once the beneficiar ies voted to appoint a8 corporate trustee. The Bulens sent a lette r to the beneficiaries providing options for corporate trustees and asking the beneficiaries to vote. The Gaynors objected to th e Bulens' proposal. They contended the terms of the Trust required the court to ap point the first corporate trus tee and the language relied upon by the Bulens applies to subsequent changes. The Gaynors also objected to the corporate trustee proposed by the Bulens as unqualified to serve under the terms of the Trust. The Gaynors argued the Bulens should be surcharg ed to pay the attorn ey fees and costs incurred by the Trust and the Gaynors. After months of hearings and several r ounds of briefing, including consideration of a report by a guardian ad litem for the minor and unborn beneficiaries of the Trust, the court issued an order indicating the terms of the Trust required the court to appoint the first successor corporate trust ee. The court also determined distribution of income by the trustee is to be made in the trustee's discre tion. The court appointed First American as the initial successor corporate trustee with Fi rst Foundation appointe d as the alternative initial successor corporate trus tee. Because First Americ an declined to act, First Foundation accepted the appointment and cons ented to act upon the resignation of the Bulens as cotrustees. Gaynors' Motions for Attorney Fees Shortly after the court granted the Gay nors' motion for judgment, but before the court appointed the corporate trustee, the Gay nors filed a motion for attorney fees arguing their efforts created a common fund or benefit for the other beneficiaries of the Trust by ending the "senior generation on ly" distribution, making Trus t funds available to junior9 generations and installing a neut ral and professional trustee to protect and preserve Trust assets. Dorothy's brother, Ja mes, submitted a declaration stating he was unaware he could receive distributions from the Trust ev en though he had medical conditions which caused him to have financial hardships. Dorothy submitted a declaration and evidence showing nine or 10 individua ls received distributions of approximately $4. 7 million since 1995 whereas the beneficiarie s from the younger generations received nothing. And in 1999 more than half of the distributions went to the cotrustees them selves. According to Dorothy's analysis, an appointment of a corporate trustee and ending the "seniorgeneration-only" distribution policy could make availabl e about $1 million more per branch to younger generations than would have been available under the prior policy. The Bulens opposed the motion arguing th e Gaynors are not entitled to fees under the common fund theory because the availability of funds to other generations is speculative. The Bulens submitted form de clarations from various beneficiaries, primarily from Jim's branch, indicating they were comfortable with how the family cotrustees administered the Trust in the past , including distributing Trust income to the senior generation, and di d not believe the Gaynors should recover fees. The court denied the motion for fees as pr emature. The court noted it had not yet appointed the corporate trustee. The court fo und there is a fund consisting of assets of the Trust and all beneficiaries of the Trust are affected by the judgment. However, the court stated it was unable "at this point in time to determine which beneficiaries will benefit from the appointment of a corporate tr ustee" and, therefore, the "effect of the judgment upon the [T]rust assets , entitlement to distribution, or distribution is at this time10 speculative and collateral to the judgment. " The court concluded the common fund doctrine did not currently apply, but indica ted it was possible the motion for fees should be granted at a later date if it determined the petition resu lted in preserving, creating or increasing the common fund. Once the court appointed the corporate tr ustee, the Gaynors again filed a motion for attorney fees. The Gaynors argued en titlement to fees base d on both the court's equitable powers and the common fund doctrine on the basis th ey had created a benefit to the Trust by (1) ending the "senior genera tion only" income dist ribution policy, (2) removing the opportunity fo r self-dealing by individual trustees, and (3) securing professional oversight and mana gement of the Trust assets. Dorothy again submitted a declaration with analysis showing an end to the "senior genera tion only" policy could make more than $1 million in Trust fund s available to the second through sixth generations of Bulen descendants who were not previously eligible to receive these funds under the prior family policy. The Bulens opposed the motion contending attorney fees are not available under the common fund theory because it is specul ative whether a common fund will ever be created or preserved. They also disputed the reasonableness of the fees requested. Court's Order Awarding Fees After consideration of th e motion and the evidence, th e trial court awarded the Gaynors $260,948.34 in attorney fees. The court found the Gaynors were the prevailing parties. It noted the Gaynors successfully opposed the Bulens' a ttempt to modify the Trust and obtained an order appointing a cor porate trustee, as required by the Trust.11 They also obtained appointment of one of their nominees as corporate trustee. "In short, they obtained the favorable results that they sought." The court found "the necessary effect of the relief granted was to preserve or create a fund not previously av ailable to certain trust beneficiaries." The court noted the Trust beneficiaries had for more than 20 ye ars followed a practice of appointing only senior generation beneficiaries to act as successor cotrustees in conflict with the language of the Trust. These cotrustees engaged in a distribution practice that benefited almost exclusively the senior generation beneficiarie s. While not specifically interpreting the distribution provisions of the Trust, the cour t found the practice was contrary to a clear reading of the Trust and the cotrustees "s hould not have excluded younger beneficiaries and beneficiaries having fi nancial needs." As a result of the Gaynors' efforts, the court appointed the firs t corporate trustee, as required by the terms of the Trust. The ne w trustee stated it would not follow the past practice of distributing income to only seni or generation beneficiaries. Rather, all beneficiaries are now eligible for a distributio n. The court stated, "[t]hese facts convince the court that, as a result of the success of [the Gaynors] in obtaining the current appointment, younger beneficiaries and need y beneficiaries now have a probability of benefitting from the [T]rust. That is, ther e will be funds available that were not previously available that the current corporate trustee can di stribute to them." Although the court noted the specific amount of the dist ributions and identities of the beneficiaries12 are unknown, "the fact is that there are funds available for distribution that were
otherwise not available." 3
The court observed more than $3 million had been di stributed to the senior generation over the past 20 years while none of the younger generation had been offered or received anything and so me, including "one having se vere financial needs had no knowledge of their rights under the [T]rust." The court concluded its order stating, "[t] his is one of those most meritorious of cases justifying an award of attorneys' fees" un der both equitable principles and the common fund theory stating it wo uld be "unfair if [the Gayn ors] had to shoulder the entire burden of the fees incu rred for the benefit of about [40] other beneficiaries." The court denied the Gaynors' request fo r more than $30,000 in fees the court determined were not incurred for the purpose of protecting, pres erving or increasing a common fund, such as fees in curred when Dorothy advocate d for "adhering to the socalled 'family arrangement' for selection of an individual trustee" and before the Gaynors raised the issue of the need for a corporate trustee.

3 At oral argument on the fee motion, counsel for the newly appointed corporate trustee, First Foundation, assured the court First Foundation, as trustee, "will distribute income sprinkling among the generations. Th e Trust clearly calls for that. There's no support in the Trust . . . for an older genera tion only policy of dist ributions." The court found this important to "solidify the finding that there's a common fu nd." "[A]s I have concluded . . . the [Gaynors] have brought about a benefit to a whole class of people that were previously deprived of the possibility of that benefit by individual trus tees who had an interest in the situation a nd on a prima facie basis may have had a conflict of interest."13 DISCUSSION
I The Bulens challenge the trial court's aw ard of attorney fees based on the common fund doctrine, or its outgrowth, the substan tial benefit doctrine. These are nonstatutory equitable exceptions to the Am erican rule requiring parties bear their own fees. ( Pipefitters Local No. 636 Define d Benefit Plan v. Oakley, Inc. (2010) 180 Cal.App.4th 1542, 1547 ( Pipefitters ).) Both theories are based upon th e "inherent equitable powers of the court." ( Serrano v. Priest (1977) 20 Cal.3d 25, 34 ( Serrano III ).) The common fund doctrine "is grounded in 'the historic power of equity to permit . . . a party preserving or recovering a fund for the bene fit of others in addition to [himself or herself], to recover [his or her] costs, incl uding [his or her] attorneys' fees, from the fund of property itself or directly fro m the other parties enjoying the benefit.' " ( Serrano III , supra , 20 Cal.3d at p. 35.) Similarly, the principal purpose of the substantial benefit theory "is to avoid enriching one party w hose legal action has substantially benefitted the ot her. Exercising its equitable discretion, the trial court determines whether the intere sts of justice require those who received a benefit to contribute to the legal expenses of those who secured the benefit." ( Pipefitters , supra , 180 Cal.App.4th at p. 1547.) "We independently review any legal issu e regarding the appropriate criteria for a fee award. But once those criteria are identified, we defer to the tria l court's discretion in determining how they are to be exercised. [Citation.] In fashioni ng an equitable remedy, the trial court is in the best position to dete rmine whether the criteri a for a fee award have14 been met. We will not disturb its judgment on this issue unless we are convinced the court abused its discretion. [Citation.] A tr ial court abuses its discretion only where its action is clearly wrong and without reasonable basis." ( Pipefitters , supra , 180 Cal.App.4th at pp. 1547-1548.)
II The Bulens contend the common fund theo ry does not apply in this case because there was no actual pecuniary benefit from th e litigation in terms of an increase or preservation of Trust assets as a whole. We do not agree. Under the common fund theory, "whe n a number of persons are entitled in common to a specific fund, and an action [by a pa rty] for the benefit of all results in the creation or preservation of that fund, such [p arty] may be awarded a ttorney's fees out of the fund." ( Serrano III , supra , 20 Cal.3d at p. 34.) "By this means all of the beneficiaries of the fund pay their share of th e expenses necessary to make it available to them." ( Winslow v. Harold G. Ferguson Corp. (1944) 25 Cal.2d 274, 277 ( Winslow ).) A review of authorities applying the common fund doctrine in estate matters is helpful.
In Winslow , when the corporate en tity responsible for administering the trust became insolvent, beneficiaries of a trust co mmenced judicial action to protect the trust assets and to bring them within judicial ad ministration. The Supreme Court upheld an award of attorney fees stating, "[w]here a lawyer has rendered such valuable service as to make available a fund for a cl ass, even though he appeared for only one claimant, it is equitable that his compensation and expenses should come from the entire fund saved for all classes concerned before it is distributed." ( Winslow , supra , 25 Cal.2d at p. 284.)15 In Estate of Reade (1948) 31 Cal.2d 669, 672, the Supreme Court affirmed the trial court's exercise of discretion in awarding attorney fees to an heir who challenged the administratrix of an estate for failing to list a death benefit she collect ed as an asset of the estate. The court stated, "a [party] who has succeeded in protecting, preserving or increasing a fund for the bene fit of [himself or herself] and others may be awarded compensation from the fund for th e services of [his or her] a ttorney. This is to compel those for whose benefit the action or proceed ing was taken to bear their share of the expenses of the litigation; and this rule is equitable and just." ( Id . at pp. 671-672.) The successful challenge resulted in charging the ad ministratrix for the benefit she collected, which then became available fo r distribution to the remaining heirs. Since a fund was created or preserved for the benefit of all of the heirs, the court concluded "equitable principles would seem to require that the othe r heirs bear their proportionate share of the expense of the litigation." ( Id . at p. 672.)
In Estate of Lundell (1951) 107 Cal.App.2d 463, a minor beneficiary of a will objected to the probate court's award of atto rney fees for the executors of the will and obtained a reversal of the fee award. Th e court concluded the minor beneficiary was entitled to her fees based on the common fund doctrine. The court rejected the contention she should not be en titled to fees under the common fund doctrine because the litigation did not increase the fund available to the heirs. The court stated "[t]he important feature is that in both Estate of Reade , supra , [31 Cal.2d 669] and the present case the fund was preserved whereby each beneficiary received more th an he would otherwise have16 received because of the services rendered by the attorneys for [the minor]." ( Id . at p. 465.) In this case, although the overall Tr ust fund was not increased or preserved through this litigation, the Gaynors made the fund available to a class of beneficiaries who otherwise would not have had access to the fund under the "senior generation only" policy applied by the individual trustees. As a result of bringing administration of the Trust into conformity with th e express terms of the Trust a nd obtaining appointment of a neutral corporate trustee, whic h will follow the instructions of the Trust for distributions, the court concluded the Gaynors "have brought about a benefit to a whole class of people that were previously deprived of the possibility of that be nefit by individual trustees who had an interest in the situation and on a pr ima facie basis may have had a conflict of interest." For the first time in decades, "younger benefi ciaries and needy beneficiaries now have a probability of benef itting from the trust. That is , there will be funds available that were not previously available that the current corporate trustee can distribute to them." We conclude the court's finding is en tirely consistent with the holdings in Winslow , supra , 25 Cal.2d 274, Estate of Read , supra , 31 Cal.2d 669, and Estate of Lundell , supra , 107 Cal.App.2d 463 applying the common fund theory . It is also consistent with authorities holdi ng the probate court "enjoys broad equitable powers over the trusts within its jurisdicti on." When litigation benefits th e trust, the probate court has discretion to award attorney fees. ( Hollaway v. Edwards (1998) 68 Cal.App.4th 94, 99 [attorney fees awarded to trustee for succe ssfully defending agai nst removal petition and17 clarifying her role]; see Rudnick v. Rudnick (2009) 179 Cal.App.4th 1328, 1334, fn. 2 ["based on the probate court's e quitable powers alone, it has been held that beneficiaries who have incurred attorney f ees, either to vindicate their position as beneficiaries [citation] or for the benefit of the trust [cita tion], are entitled to have those fees paid by the trust"].) Under the circumstances of this case, the trial court acted well within its equitable discretion to award fees from the Trust. Gi ven our conclusion, we need not reach the issue of whether or not fees are also appr opriate under the substantial benefit doctrine.18 DISPOSITION The order awarding attorney fees is affi rmed. Respondents ar e awarded their costs on appeal.

M C CONNELL, P. J.
WE CONCUR:

O'ROURKE, J.

AARON, J.