It's a "Nefarious" & "Murky" Case of First Impression

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In an unprecedented legal maneuver, David Paice, the Trustee and grandson-in-law of his 87 year old grandmother's trust, initiated preemptive litigation AGAINST grandma and the beneficiaries of her irrevocable Trust, his aunts and uncles, to get his 12 year retroactive accounting of trust approved by the Court. Paice had one little problem though, his accounting didn't balance and his own accountant called it a "compilation" not an accounting! What makes this case extraordinary is that Paice, represented by Lane Powell (Ballard Spahr), financed this legal action using 120k of grandma's Trust money, the money she needed for her health and well being.

This case creates a paradoxical and ethically questionable scenario where, in effect, the Trust is litigating against itself. By using Trust assets to fund the lawsuit, Paice's actions are resulting in the Trust cannibalizing its own resources, through substantial legal fees Paice paid to Lane Powell (Ballard Spahr). Could this have anything to do with what David's wife told her aunt? "They’re checking out my fucking house? I will tie up every penny of that trust and no one will get anything.”  You decide.

David Paice's legal strategy is not only highly unusual in trust litigation but also raises significant ethical and legal concerns. It essentially places the Trust in conflict with its own interests and those of its beneficiaries, including Grandma, violating numerous duties such as;  Duty of Loyalty (Cal. Prob. Code § 16002, Duty of Impartiality (Cal. Prob. Code § 16003), Duty to Avoid Conflict of Interest (Cal. Prob. Code § 16004), Duty of Prudent Administration (Cal. Prob. Code § 16040), Duty to Control and Preserve Trust Property (Cal. Prob. Code § 16006)Duty to Keep Beneficiaries Reasonably Informed (Cal. Prob. Code § 16060).

The seizing of Trust funds by Lane Powell (Ballard Spahr) to finance litigation against the Trust's own beneficiaries is a stark departure from standard fiduciary practices.  This Rule of Professional Conduct, prohibits a lawyer from accepting compensation for representing a client from someone other than the client (in this case grandma's Trust) unless the client gives informed consent (she didn't) and there is no interference with the lawyer's independence of professional judgment or with the client-lawyer relationship (there is). The Trust paying Lane Powell's fees for representing the trustee David's "murky" behavior violates RPC 1.8(f). 

The Estate of Gump (1991) 1 Cal.App.4th 582, established precedents for beneficiaries seeking redress against trustees for mismanagement or breach of fiduciary duty. In a typical trust litigation scenario, beneficiaries sue trustees for failing to meet their fiduciary responsibilities. However, this case presents a stark reversal of those established roles. Instead of defending against beneficiary legal claims, (there were none) Trustee David Paice initiated legal action against the Grantor beneficiaries to cover up his "nefarious" deeds. Traditional roles in trust litigation are inverted in this case, creating a complex legal and ethical quandary that challenges established norms in trust administration and fiduciary responsibility. 

During a VAPO hearing in 2023, the Court declared Grantor, grandmother, Sharon M. Harold, a vulnerable adult due to serious health issues at that time. Recently, Granny suffered rapid kidney failure resulting in cognitive impairment. Despite this, Lane Powell (Ballard Spahr) keept attempting to obtain her signature on a release  altering the terms of her irrevocable Trust., someting not permitted under probate code.

The use of Trust funds against the Grantor's wishes, especially given her vulnerable status, constitutes elder financial exploitation under California and Washington law.  Learn more.

This case presents a unique situation where a trustee launched a first strike LAWFARE using trust funds to litigate against the beneficiaries and trust's interests, creating a precedent-setting scenario in trust law. Judge Yip has characterized the Trustee's behavior as "nefarious," and "murky" and there have been several attempts to circumvent Yip's court orders through "confidential" (NOT confidential) settlement agreements.