Moeller v. Los Angeles County Superior Court (Sanwa Bank)

ROGER D. MOELLER Petitioner v. LOS ANGELES COUNTY SUPERIOR COURT Respondent, SANWA BANK Real Party in Interest No. S054624 C.A. 2nd, Div. 3, No. B096643 California Supreme Court Filed August 21, 1996
        Petition for review GRANTED.




[Editor's Note - The above-mentioned Court of appeal case has been granted review by the California Supreme Court. For your convenience we reprint below the Daily Journal's Ruling Column brief which summarized the earlier decision of the lower court.]


PROBATE AND TRUSTS

Trustee's Records for Administration Belong to Trust and Must Be Disclosed to Successor Trustee.         The C.A. 2nd has established that successor trustee had the right to force the former trustee to turn over all trust documents despite claims that the documents were protected by attorney-client privilege.
        In 1967 the George and Grace Moeller Trust was created and it owned several parcels of real property. One of the parcels of land was used for the operation of a chrome plating business. Both the county of Los Angeles and the federal Environmental Protection Agency later demanded that toxic substances on the property be cleaned up. The cleanup costs and the ensuing litigation largely depleted the trust assets. In 1994, Sanwa Bank, the trustee, petitioned the probate court for acceptance of its resignation as trustee. Roger Moeller, a trust beneficiary and the successor trustee, objected to Sanwa's final accounting and the petition. Moeller moved for an order compelling discovery of certain trust documents which Sanwa had refused to produce on attorney-client privilege grounds. When the trial court denied his motion, Moeller petitioned for a writ of mandate.
        The C.A. 2nd issued the writ. Moeller was entitled to review all of Sanwa's trust-related documents since the trustee files related to trust administration and belonged to the trust estate, not the trustee. Moeller, as successor trustee and a trust beneficiary, had an interest in the estate's property. A trustee cannot invoke attorney-client privilege against a trust beneficiary or successor trustee to keep trust documents protected from discovery. Further, Probate Code Section 15644 requires a previous trustee to transfer the trust property to the successor trustee, and the successor trustee has a duty to take and control trust property. The trial court was directed to compel Sanwa to turn over trust administration files.

        Roger D. Moeller, CA 2nd, Div. 3, No. B096643, 05/23/96, by Croskey, J.

        The full text of this case appears at 96 Daily Journal DAR 5981, 05/28/96.


98 Daily Appellate Report