Newcomers to probate litigation are frequently surprised by how differently things work in probate court, as opposed to your more straightforward civil courts. (And how do those newcomers know how civil courts work? Law & Order, I’m guessing.) For example, in civil litigation, a plaintiff will typically pursue claims for him or herself. It is very rare for a civil plaintiff to go through the time and expense of litigation, secure a judgment, and then distribute his or her winnings to a group of separate third parties who never hired a lawyer, never took discovery, never conducted a deposition, never pursued discovery, and never even showed up to court.

In probate litigation, however, it happens all the time. That is because often, a party pursuing a claim is doing so not on behalf of him or herself, but on behalf of a trust or an estate. That trust or estate may have any number of beneficiaries. If the party is successful, the judgment he or she is awarded will go not solely to the party who did all the work, but instead will end up distributed to all the beneficiaries, even the ones who never bothered to show up.

Imagine, if you will, a baby going for a ride on Mom’s bike perched in his baby seat. The baby gets to enjoy the cool breeze, the scenery, and the thrill of high-speed travel while Mom does all the hard pedaling work. At the end of the ride, the baby enjoys all of the rewards (a trip to the park), while bearing none of the risk (like, I don’t know, a possible heart attack from overexertion? Look, the metaphor isn’t perfect.)

In probate litigation, the nonlitigating beneficiaries are the baby riding in his baby seat. They reap the rewards of success in court, while bearing none of the risks of failure – they didn’t do the work, and they never paid a dime to a lawyer.

This, obviously, creates a bit of an incentive issue. If you are the beneficiary of a trust or estate that holds a valid claim, why would you go through the time, effort, and expense of pursuing that claim when your responsible sister, Annie, could do it instead? Meanwhile, Annie is wondering why she should go through all the trouble of litigation when her best-case scenario is the exact same award that goes to her slacker brother Nate? (Apologies to my slacker brother Nate, an anesthesiologist who is definitely not reading this blog.)

The Court of Appeal recently took a big step toward resolving these existential questions via its recent holding in Asaro v. Maniscalco (2024) 103 Cal.App.5th 717. In Asaro, petitioner Anthony Asaro brought claims for breach of fiduciary duty and elder abuse against Jon Maniscalco, a former trustee of a trust of which Asaro was a beneficiary. The problem? Maniscalco was also a beneficiary of the trust, meaning that, presumably, a portion of any recovery obtained would ultimately make its way right back to Maniscalco.

“Stop right there,” said the trial court. Asaro sought damages under Probate Code section 859, which provides that where a court finds that property has been wrongfully taken from a trust, the wrongdoer is liable for “twice the value of the property recovered . . .” – i.e., a double damages penalty. The trial court chose to award the entirety of this double damages penalty to Asaro, holding that allowing any portion of it to go to Maniscalco – the guy who stole the property to begin with – would be inequitable. Maniscalco appealed, arguing that section 859 damages may only be awarded to the trust or estate from which property was wrongfully taken, and not to individual litigants.

Surprisingly enough, the Court of Appeal did not side with the elder-abusing, fiduciary-duty-breaching property thief. The Court noted that while section 859 states that the wrongdoer “shall be liable” for double damages, it does not specify which party will recover those damages. And after finding little guidance in the legislative history or precedent, the Court of Appeal held that it was perfectly reasonable for the entirety of the penalty to go solely to the beneficiary pursuing the claim, where: (1) the trust had already been made whole by the return of its misappropriated property; (2) awarding the penalty to the trust would result in a portion of it going to the wrongdoer; and (3) “none of the other beneficiaries joined Asaro in this litigation, leaving him to shoulder the burden alone.” Asaro thus reaped the rewards of his hard work, and the nonlitigating beneficiaries who were just along for the ride did not.

While the Court of Appeal stopped short of saying that section 859 double damages penalties will always be awarded exclusively to the party who takes the laboring oar, it certainly allowed for an exclusive award where the circumstances make it a just result. Freeloading babies of the world, take notice: nobody rides for free.

(Note that the Asaro court also lent its voice to the debate previously blogged about here and here concerning whether misappropriated property ordered returned to an estate or trust considered a component of the section 859 double damages penalty, or an addition to that penalty (effectively providing for treble damages). Asaro sided with Estate of Ashlock, and against Conservatorship of Ribal, in favor of the “treble damages” interpretation.)

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