Case Number: B322246
Court: California Court of Appeal, Second Appellate District, Division Two
Date Filed: 2025‑08‑31
Holding
The court held that the no‑contest clause embedded in the 1999 Original Trust applies to all interests the beneficiary would receive under that trust—including the share of the Residual Trust specified by the 2003 Amendment—and that, because the beneficiary’s direct contest of the Original Trust was brought without probable cause, the forfeiture language of the clause disinherits the beneficiary from the entirety of those interests. Accordingly, the probate court’s order denying the petition to enforce the clause was reversed and the matter remanded for further findings on probable cause.
Narrative
Lead:
In a decisive clarification of California’s no‑contest doctrine, the Second Appellate District held that a beneficiary who directly contests a trust—regardless of whether the contested portion is later amended by an instrument lacking its own no‑contest provision—may be stripped of all benefits under the original trust. The ruling in Key v. Tyler resolves a protracted dispute over the scope of forfeiture and underscores the primacy of the trustors’ expressed intent.
Procedural backdrop:
Sarah Plott Key appealed a Los Angeles County probate court order that denied her petition to enforce a no‑contest clause in the 1999 trust created by her parents, Thomas E. Plott and Elizabeth R. Plott. The petition sought to disinherit Key’s sister, Elizabeth Plott Tyler, on the ground that Tyler’s defense of a 2007 amendment—procured through alleged undue influence—constituted a direct contest of the trust without probable cause. The trial court had struck Key’s petition under the anti‑SLAPP statute, a decision the appellate panel reversed in Key v. Tyler II (2019). On remand, the probate court ruled that the 2003 amendment, which altered the residual‑trust distribution percentages and contained no no‑contest clause, insulated Tyler’s share of the residual assets from forfeiture. Key appealed that determination.
Factual matrix:
The Original Trust (1999) divided the estate of the first‑dying parent into three sub‑trusts—Survivor’s, Marital, and Exemption—each feeding a Residual Trust for ultimate distribution among the three children: Tyler, Key, and a third sister, Jennifer Plott Potz. Article Fourteen of the Original Trust housed a broad no‑contest clause: any beneficiary who “contests” the trust or any related instrument would be “disinherited” and all interests “forfeited as though he or she had predeceased the trustors.”
In 2003 the surviving parent, Elizabeth Plott, executed a one‑page amendment that re‑allocated the Residual Trust’s shares to an equal one‑third split among the children. The amendment omitted any no‑contest language. After Thomas’s death in 2003, Tyler allegedly exerted undue influence over Elizabeth to secure a 2007 amendment that reshaped the Survivor’s Trust distribution, granting Tyler a dominant interest in the family nursing‑home business and the Beverly Hills residence, while capping Key’s share at $1 million.
Key successfully challenged the 2007 amendment on undue‑influence grounds, and the probate court invalidated it. Tyler then defended the amendment in court, prompting Key to invoke the Original Trust’s no‑contest clause. The core issue on appeal was whether Tyler’s forfeiture, triggered by her direct contest, extended to the residual‑trust share set by the 2003 amendment.
Legal issues:
- Does the Original Trust’s no‑contest clause apply to assets that the beneficiary would receive under a later amendment lacking its own no‑contest provision?
- Assuming a direct contest without probable cause, is the forfeiture limited to interests expressly governed by the instrument containing the clause, or does it encompass all interests “given under this Trust” as the clause states?
Court’s analysis:
Interpretation of the clause – The appellate panel treated the no‑contest provision as a broad, unqualified forfeiture mechanism. The clause’s language—“all interests given under this Trust shall be forfeited”—was read to cover any benefit the beneficiary would obtain through the trust’s overall scheme, not merely the specific assets enumerated in the instrument containing the clause. The court emphasized that the trustors’ intent, as expressed in the clause, was to disinherit any contestant in entirety, a purpose that “cannot be narrowed by the absence of a no‑contest clause in a subsequent amendment.”
Effect of the 2003 amendment – The court noted that the amendment merely altered the distribution percentages of the Residual Trust; it did not create a new trust or sever the residual‑trust’s connection to the Original Trust. Consequently, the assets flowing through the Residual Trust remained “interests given under this Trust,” subject to the forfeiture language. The lack of a no‑contest clause in the amendment does not immunize those interests because the statutory definition of a “protected instrument” (Probate Code § 21310(e)) limits the type of instrument that can trigger the clause, not the range of assets that may be forfeited once a protected instrument is contested.
Statutory framework – Under Probate Code § 21311(a)(1), a no‑contest clause is enforceable when a direct contest is brought without probable cause. The appellate court reiterated its earlier finding (in Key v. Tyler II) that Tyler’s defense of the 2007 amendment satisfied the definition of a direct contest. The court declined to address the separate question of probable cause on this appeal, remanding that issue to the probate court.
Law of the case – The panel rejected Tyler’s argument that the prior appellate decision barred reconsideration of the forfeiture’s scope. Citing Leider v. Lewis (2017) 2 Cal.5th 1121, the court explained that the law‑of‑the‑case doctrine applies only to issues actually decided. The earlier opinion had addressed the existence of a direct contest, not the breadth of forfeiture; thus, the present issue remained open for adjudication.
Disposition:
The appellate court reversed the probate court’s denial of Key’s petition and remanded for further proceedings, specifically to determine whether Tyler lacked probable cause for her contest. The court also awarded Key her costs on appeal.
Impact and unresolved questions:
Key v. Tyler furnishes a clear precedent that a no‑contest clause’s forfeiture language can reach all benefits derived from the original trust, even when later amendments re‑allocate those benefits without embedding their own no‑contest provisions. Practitioners should counsel clients that the presence of a no‑contest clause in the foundational instrument may expose the entire estate to forfeiture if a beneficiary initiates a direct contest without probable cause, regardless of subsequent amendments.
The decision leaves the probable‑cause inquiry unresolved. Lower courts must now apply the heightened evidentiary standard for proving lack of probable cause, distinguishing it from the undue‑influence analysis used to invalidate amendments. Additionally, the opinion does not address whether a beneficiary who contests only an unprotected amendment (as in Aviles v. Swearingen) could still trigger forfeiture of interests under the original trust—a question that may surface in future disputes involving layered amendment schemes.
Referenced Statutes and Doctrines
- Probate Code § 21310(e) – Definition of “protected instrument.”
- Probate Code § 21311(a)(1) – Enforcement of no‑contest clauses for direct contests without probable cause.
- Probate Code § 21312 – Construction of no‑contest clauses (strict construction).
- California Code of Civil Procedure § 425.16 – Anti‑SLAPP statute (relevant to prior appeal).
Key Cases Cited
- Key v. Tyler (2016) (non‑published) – First appellate decision on the 2007 amendment.
- Key v. Tyler II, 34 Cal. App.5th 505 (2019) – Anti‑SLAPP reversal and finding of direct contest.
- Donkin v. Donkin, 58 Cal.4th 412 (2013) – Legislative intent behind no‑contest clauses.
- Burch v. George, 7 Cal.4th 246 (1994) – Trust‑instrument interpretation as a matter of law.
- Leider v. Lewis, 2 Cal.5th 1121 (2017) – Law‑of‑the‑case doctrine.
- Aviles v. Swearingen, 16 Cal.App.5th 485 (2017) – Limits of no‑contest enforcement for unprotected amendments.
- Estate of Rossi, 138 Cal.App.4th 1325 (2006) – Contest of unprotected trust amendment.
- Perrin v. Lee, 164 Cal.App.4th 1239 (2008) – Scope of no‑contest clauses.
- Cory v. Toscano, 174 Cal.App.4th 1039 (2009) – Interlineations as separate instruments.
- Estate of Pittman, 63 Cal.App.4th 290 (1998) – Purpose of broad no‑contest clauses.
These authorities collectively shape the appellate court’s reasoning that the Original Trust’s no‑contest clause imposes a sweeping forfeiture on any beneficiary who directly contests the trust without probable cause, irrespective of later amendments lacking their own no‑contest language.