Moeller v. Superior Court

947 P.2d 279, 16 Cal. 4th 1124, 97 Daily Journal DAR 14679, 69 Cal. Rptr. 2d 317, 97 Cal. Daily Op. Serv. 9085, 1997 Cal. LEXIS 7904
CourtCalifornia Supreme Court
DecidedDecember 4, 1997
DocketNo. S054624
StatusPublished
Cited by88 cases

This text of 947 P.2d 279 (Moeller v. Superior Court) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Moeller v. Superior Court, 947 P.2d 279, 16 Cal. 4th 1124, 97 Daily Journal DAR 14679, 69 Cal. Rptr. 2d 317, 97 Cal. Daily Op. Serv. 9085, 1997 Cal. LEXIS 7904 (Cal. 1997).

Opinions

[1127]*1127Opinion

WERDEGAR, J.

In this proceeding for an accounting, the successor trustee of a private express trust seeks to discover from the predecessor trustee documents reflecting confidential communications between the predecessor and an attorney on matters of trust administration. The question before us is whether the predecessor trustee may assert the attorney-client privilege as to such documents and thereby withhold them from the successor. We conclude the answer is no. Upon taking office, a successor trustee assumes all of the powers of trustee, including the power to assert the attorney-client privilege as to confidential communications on the subject of trust administration. Therefore, we affirm the judgment of the Court of Appeal.

Factual and Procedural Background

George J. Moeller and his wife, Grace Todd Moeller, as trustors, established a trust. Initially George was trustee; later, real party in interest Sanwa Bank (hereafter Sanwa) succeeded to this position. Among the beneficiaries of the trust is the Moellers’s son, petitioner Roger D. Moeller (hereafter Moeller). The trust property consisted of certain interests in real estate in Southern California, including an undivided one-quarter interest in certain real property in the City of Los Angeles. Sanwa’s management of this interest is the subject matter underlying the instant dispute.

For many years, a chrome plating business was operated on the property in Los Angeles. The Environmental Protection Agency eventually ordered the removal of certain toxins that had been deposited on the property as a result of the business. The costs of this cleanup and associated litigation depleted the trust of assets.

Subsequently Sanwa resigned as trustee, and Moeller succeeded to that position. Upon its resignation, Sanwa submitted a final accounting, petitioned for settlement, and sought to recover from the trust the expenses it had incurred in the cleanup of the Los Angeles property, a trustee’s fee, and attorney fees.

Moeller objected to Sanwa’s accounting and petition on several grounds. He complained that the accounting contained errors and omissions and lacked supporting evidence for alleged commitments, the assets and liabilities of the trust were not enumerated properly or described adequately, major contingent obligations that were alleged exceeded the trust resources and were not disclosed adequately to the beneficiaries or the successor trustee, and certain expenditures and advances had resulted from imprudent decisions by Sanwa.

[1128]*1128Soon thereafter, Moeller formally demanded production and inspection of certain documents and records related to Sanwa’s administration of the trust. The requested papers included: (1) engagement letters, agreements, letters, notes, memoranda, files, telephone notes, invoices, and billings pertaining to legal services provided to the trust; (2) files, memoranda, notes, accountings, billings, and invoices pertaining to any entity that performed services for the trust, including Sanwa, environmental consulting firms, accounting firms, contractors, and subcontractors; and (3) communications, notes, and memoranda between Sanwa and any governmental agency pertaining to trust assets.

Sanwa responded it had already produced many of the documents and records Moeller demanded. Sanwa also claimed those it had not produced were protected from disclosure by the attorney-client privilege. Sanwa asserted the privilege as to all the demanded documents and records except those containing communications between Sanwa and any governmental agency pertaining to trust assets.

Moeller moved for an order to compel full compliance with his demand for production and inspection. He contended Sanwa could not invoke the attorney-client privilege because that privilege belongs to the office of trustee, not to any particular person who at one time or another serves as the trustee. In opposition, Sanwa argued that when a trustee retains counsel, the client for purposes of the attorney-client privilege is the trustee personally and not the trust or the office of trustee. The trial court agreed with Sanwa and ruled that “Sanwa Bank, as former trustee, held and properly asserted an attorney-client privilege and that said privilege neither inured nor transferred to Sanwa’s successor, [Moeller].”

Moeller petitioned the Court of Appeal to issue a writ of mandate to compel the trial court to order the production and inspection of the documents and records he had demanded. That court held, “Because the predecessor trustee has a duty to transfer the trust property to the successor trustee, because the successor trustee has a duty to take and keep control of the trust property, and if necessary, to take reasonable steps to compel a previous trustee to deliver the trust property to the successor trustee, and because Strauss [v. Superior Court (1950) 36 Cal.2d 396 [224 P.2d 726]] holds that trust property includes a trustee’s records regarding the administration of the trust, it is clear that petitioner, in his capacity as trustee, has the right and duty to compel Sanwa to transfer its Trust records to him.” Accordingly, the Court of Appeal issued the writ.

We granted Sanwa’s petition for review.

[1129]*1129Discussion

This case presents the following question: Does the attorney-client privilege permit a predecessor trustee to withhold from a successor trustee documents related to trust administration? Both settled law and practical considerations lead us to conclude the answer is no.

Before addressing the dispute between the predecessor trustee and the successor, however, we address a threshold issue: Can a trustee be a holder of the attorney-client privilege? In other words, does a trustee generally have the power to assert the attorney-client privilege to prevent disclosure of confidential communications between the trustee and an attorney consulted on behalf of the trust? As common sense suggests, the answer is yes.

Evidentiary privileges are creatures of statute. (Evid. Code, § 911; Roberts v. City of Palmdale (1993) 5 Cal.4th 363, 373 [20 Cal.Rptr.2d 330, 853 P.2d 496].) Consequently, whether a trustee can claim the attorney-client privilege, and thereby prevent discovery of confidential communications it has had with an attorney, depends upon statute. A “client” ordinarily has a privilege to refuse to disclose confidential communications the client has had with an attorney. (Evid. Code, § 954.) For purposes of the attorney-client privilege, the term “ ‘client’ means a person who, directly or through an authorized representative, consults a lawyer for the purpose of retaining the lawyer or securing legal service or advice from him in his professional capacity. . . .” (Evid. Code, §951.) A trustee therefore can claim the attorney-client privilege if the trustee, qua trustee, has the power to become an attorney’s client.

A trustee’s powers include those specified in the trust instrument, those conferred by statute, and those needed to satisfy the reasonable person and prudent investor standards of care in managing the trust. (Prob. Code, §§ 16200, 16040, subd. (a), 16047, subd. (a).)1

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947 P.2d 279, 16 Cal. 4th 1124, 97 Daily Journal DAR 14679, 69 Cal. Rptr. 2d 317, 97 Cal. Daily Op. Serv. 9085, 1997 Cal. LEXIS 7904, Counsel Stack Legal Research, https://law.counselstack.com/opinion/moeller-v-superior-court-cal-1997.