A contentious legal battle over a revocable trust has emerged, capturing the attention of the California probate courts. The dispute involves a trustee's duty to defend a trust amendment against challenges from disinherited beneficiaries. Manijeh Sheila Koski, the trustee and sister of the deceased Kiomars Fiazi, filed a petition in Santa Cruz County on July 25, 2024, seeking court instructions to remain neutral in litigation initiated by Schuyler Campbell.
The case centers around amendments made to Fiazi's trust before his death in October 2022. The last amendment, executed in September 2020, excluded Campbell—a nephew—and added Dinora Figueroa as a beneficiary. This amendment also included a directive for the trustee to defend any contest against the trust at its expense. Campbell challenged this amendment in February 2023, alleging that it was invalid due to Fiazi's lack of mental capacity and undue influence exerted by Figueroa, who he claimed was Fiazi’s caretaker.
Koski sought court instructions to stay neutral and not file any responsive pleadings to Campbell’s petition. She argued that defending the amendment would place her in an untenable position given her dual role as both trustee and beneficiary. Additionally, she contended that using trust resources for this purpose would be inappropriate since Campbell’s challenge did not threaten the existence of the trust itself but only its specific provisions.
Figueroa opposed Koski’s petition, asserting that Koski had an obligation under the Second Amendment to defend it against Campbell’s attack. She argued that Koski had personal incentives aligned with Campbell due to familial ties and potential financial gain if the Second Amendment were invalidated. During an August 4 hearing, despite receiving written objections from Figueroa and hearing oral arguments from all parties involved, the probate court sided with Koski and instructed her to remain neutral.
On appeal, however, this decision was reversed. The appellate court emphasized that the directive within the Second Amendment required Koski to defend it unless it was judicially invalidated. The court noted that failing to enforce this directive would undermine Fiazi’s clear intent expressed in his amendments and certifications before his death. Moreover, they found no sufficient showing by Koski or Campbell that justified preliminary relief allowing neutrality.
The plaintiffs are seeking reversal of instructions for neutrality and are pushing for active defense of the Second Amendment by Koski using trust resources. They argue this is necessary to uphold Fiazi's final wishes and ensure fair administration of his estate.
Representing Manijeh Sheila Koski is attorney BAMATTRE-MANOUKIAN J., while Schuyler Campbell is represented by attorneys GREENWOOD P.J., WILSON J., and others involved in various capacities throughout these proceedings under Case ID H051453.