Non-Resident Trustees and Beneficiaries Beware! A Trustee’s Relocation to Idaho Did Not Escape California’s Jurisdiction Laws
In the recent appellate case Van Buskirk v. Van Buskirk,[1] the California Court of Appeal, Second District, held that the trial court’s ruling in a trust litigation matter, which approved a non-resident trustee’s motion to dismiss a claim for lack of personal jurisdiction, was erroneous, because key parties (including the trustee), who lived out of state and were opposed to personal jurisdiction in California, all had ample connections to the State of California.
Which Factors Helped Establish the Defendants’ Personal Jurisdiction in California?
Ellen Van Buskirk (“Ellen”) and her husband created a revocable living trust in California (which was subject to California law) in the year 2005. Ellen survived her husband and became the sole trustor, trustee, and beneficiary of the trust. Ellen’s son, daughters, and brother were appointed as successor trustees. Ellen administered the trust in California from 2005 to 2016, with occasional help from her brother.
According to Ellen’s son Walter Van Buskirk III (“Walter”), in September 2016, his sisters (Ellen’s daughters) conspired to kidnap Ellen from a rehabilitation facility in California and relocate her to Idaho, where they lived. When Walter tried to visit Ellen in Idaho, his sisters blocked his visits with threats of violence. Consequently, Ellen’s actions since September 2016 presumably cut Walter out of her trust by selling some of the trust’s real estate assets in California at “fire sale prices.”
Ellen, her daughters, and her brother told a different story. They claimed that Walter was a ne’er-do-well who lived off the family’s wealth and that Ellen had left California of her own free will to escape Walter and the abusive living situation in which he had placed her. Additionally, they claimed that Ellen could make independent financial decisions, including the decision to disinherit her son and sell trust property.
Notably, after moving to Idaho, Ellen filed four lawsuits in California, including an action to evict Walter from the former family home in Santa Monica.
Walter opposed Ellen’s most recent real estate transactions, filing a lawsuit in the probate department of the Los Angeles County Superior Court claiming that the transactions impaired his interest in the trust, and, consequently, constituted a breach of duty by the trustee. Walter was seeking an accounting and the removal of Ellen as trustee.
Ellen Seeks to Quash Walter’s Action by Filing a Motion to Dismiss for Lack of Personal Jurisdiction
Ellen argued that from 2016 to 2017 she had made “critical changes” to the trust, which had effectively cut all ties to California. More specifically, she had amended the trust to remove Walter as a beneficiary, registered the trust in Idaho, and sold/transferred most of the trust’s California assets, such that most of the trust’s current assets (almost 40 trust properties and all trust bank accounts) were now in Idaho, where she had been residing with her daughters.
The trial court granted the motion to dismiss for lack of personal jurisdiction filed by Ellen, her daughters, and her brother, finding that Walter had failed to establish their minimum contacts with California.
The Court of Appeal had a different opinion, ruling that Ellen, her daughters, and her brother did meet the requirements of the minimum contacts test. Despite Ellen’s concerted efforts to escape personal jurisdiction in California, the Court of Appeal had found these parties to have ample connections to California. It reversed the trial court’s dismissal, claiming that Walter’s California trust action should not have been dismissed for lack of personal jurisdiction.
California personal jurisdiction statutes are the same for civil and trust proceedings.[2] Jurisdiction is proper if a defendant has minimum contacts with the state, such that the lawsuit does not offend traditional notions of fair play and substantial justice.[3]
Personal jurisdiction in California can be all-purpose or case-linked jurisdiction. With case-linked jurisdiction, the court may adjudicate only those disputes relating to a defendant’s contacts with the forum.[4] As previously mentioned, a three-pronged minimum contacts test governs case-linked jurisdiction, so the Van Buskirk Court analyzed the facts of its case through the lens of this test. Case-linked jurisdiction is proper when: (1) defendants have purposefully availed themselves of the forum state’s benefits; (2) the controversy relates to the defendant’s contacts with the forum state; and (3) the exercise of jurisdiction comports with fair play and substantial justice.[5]
The court found that Ellen, her daughters and brother all were deeply involved with the trust, which was the epicenter of this family’s wealth. Additionally, the trust was created and administered in California for nearly 11 years.
In fact, Ellen’s connections with California overwhelmingly satisfied the first prong of the minimum contacts test for case-linked jurisdiction – namely, Ellen’s purposeful availment of California benefits. Defendants purposefully avail themselves of a forum’s benefits if they intentionally direct their activities at a forum in such a manner that, by virtue of the benefit, the defendants receive from the forum state. When a defendant’s activities satisfy this criteria, the defendant should reasonably expect to be subject to jurisdiction in the forum state.[6]
Ellen was a longtime California resident, a California property owner, and she had administered the trust in California from 2005 to 2016. Moreover, Ellen explicitly had chosen California law to govern the trust, which held multiple interests in California real estate. Upon leaving California, Ellen continued to reap the benefits of the forum state by filing four lawsuits in California, some of which involved trust property. Finally, Ellen, while residing outside of the state, continued to engage in financial transactions to try to rid the trust of its California real estate. Ellen had purposefully availed herself of California’s benefits beyond question.
Daughters’ Connections to California
The court found the daughters’ connections to California similarly satisfied the purposeful availment prong of the minimum contacts test for case-linked jurisdiction. The daughters were successor beneficiaries and trustees of the trust, who participated in trust transactions, and who physically came to California to “move” Ellen to Idaho. The court repeatedly chose not to comment on the issue of whether Ellen’s relocation from California to Idaho was proper or in her best interest. Rather, the key point in the court’s jurisdictional analysis was simply that the daughters chose to come to California to accomplish goals that were important to them (i.e., to relocate their mother out of state) and directly related to the trust dispute that had been filed by Walter in California.
Brother’s Connections to California
Ellen’s brother’s connections to California also satisfied the purposeful availment prong of the minimum contacts test for case-linked jurisdiction. Ellen’s brother had a role in managing the trust, which originated in California, was governed by California law, and held interests in California real estate. He also participated in the trust’s real estate transactions in California and assisted in moving Ellen from California to Idaho.
Are Walter’s Claims Sufficiently Related to the Parties’ Contacts with California?
To establish personal jurisdiction in California, a substantial connection between the defendant’s forum activities and the controversy must exist.[7] Here, Walter’s claims did relate to Ellen, her daughters’ and brother’s contacts with California because these defendants were all connected to California through the trust, and the trust was the central topic of his lawsuit. For the reasons set forth above, the trust itself was inextricably tied to California.
In assessing fairness, the court considers the burden on the defendants, California’s interest in hearing the dispute, the petitioner’s interest in obtaining convenient and effective relief, judicial economy, and the states’ shared interest in furthering fundamental substantive social policies.[8] To defeat California’s jurisdiction code, Ellen would have had to successfully argue that exercising personal jurisdiction in California was unreasonable.[9]
Ellen, her daughters and brother instead argued that Ellen was elderly and suffering from several health issues, that one of her daughters was undergoing cancer treatment, and that traveling to California would have been a hardship for them. The court, however, found that it was fair to exercise personal jurisdiction in California because Walter had a valid interest in obtaining relief in California from the sale of trust real estate located in California, and because Ellen had been well enough to litigate in four previous (and recent) California lawsuits. The court also noted that the advent of remote technology allows courts considerable flexibility to hear testimony from witnesses who are unable to be physically present in the courtroom.
Let this case be a lesson to practitioners not to swiftly turn away potential clients inquiring about a trust dispute in which the trustee and other key parties reside out of state. As illustrated by the court’s holding in Van Buskirk, the question of whether a court has personal jurisdiction over certain parties to a trust dispute may require a fact-intensive analysis, including a review of the trust instrument itself and the history of past trust administration. Given the complexity of family dynamics (which often involve parties and issues that span across several states), this case offers a clear lens through which practitioners can analyze and potentially apply California’s personal jurisdiction statutes to future trust disputes.
- [1] (2020) 53 Cal.App.5th 523.
- [2] Prob. C. §17004 (the court may exercise jurisdiction in proceedings under this division on any basis permitted by Section 410.10 of the Code of Civil Procedure.)
- [3] Daimler AG v. Bauman (2014) 571 U.S. 117, 126.
- [4] Bristol Meyers Squibb Co. v. Superior Court of Cal., San Francisco Cty., et. al. (2017) 137 S.Ct. 1773.
- [5] Pavlovich v. Superior Court (2002) 29 Cal.App.4th 262, 269.
- [6] Burger King Corp. v. Rudzewicz (1985) 471 U.S. 462.
- [7] Vons Companies, Inc. v. Seabest Foods Inc. (1996)14 Cal.4th 434.
- [8] Burger King, supra, 471 U.S. at p. 477; Vons, supra, 14 Cal.4th at p. 448.
- [9] The petitioner bringing a trust action has the burden of establishing by a preponderance of the evidence the facts justifying the exercise of jurisdiction. The burden then shifts to the defendant to demonstrate that exercising jurisdiction would be unreasonable. See Jayone Foods, Inc. v. Aekyung Industrial Co. Ltd. (2019) 31 Cal.App.5th 543.
