Probate Court May Order Mediation, Deem Non-Participating Beneficiary Rights Forfeit, Split Appellate Court Holds

Timothy Kowal, Esq.
  •  
April 7, 2021

In a surprising split-decision, the Second District held trust beneficiaries who voluntarily decline to participate in mediation forfeited all rights to object to the mediated settlement.

In Breslin v. Breslin (D2d6 Apr. 5, 2021) no. B301382, the settlor of a trust valued at upwards of $3 million provided for gifts to many charitable and nonprofit organizations. Those groups were listed on an exhibit that, unfortunately, was not attached to the trust. The trustee found a document elsewhere that appeared to be the attachment, listing 24 groups, including Pacific Legal Foundation. The trustee sought confirmation of the list.

Rather than decide the question, the probate court ordered mediation. Notice was given to all the interested parties. But only three of the listed charities participated in the mediation. Pacific Legal was among those who chose not to participate.

Seizing their moment, the participating parties struck a deal dividing the trust corpus amongst themselves, cutting out the non-mediating parties. The probate court approved the settlement over Pacific Legal's objections, on grounds they did not appear at the mediation.

Pacific Legal appealed. But the Second District affirmed.

The Breslin court held that Pacific Legal and the other parties who chose not to participate in mediation forfeited several procedural and substantive rights. Voluntary non-participation in court-ordered mediation forfeited the right to an evidentiary hearing. It forfeited their right to a determination of factual issues. And it forfeited their interests in the trust.

(If there were any rights that were not deemed forfeit, the majority did not mention them.)

Pacific Legal's key procedural misstep here appears to have been failing to appear at the initial probate hearing. Had they done so, "they would have had the opportunity to object to mediation." (To what effect, however, the majority does not say.)

Dissent Notes Forfeiture Offends Testator's Intent:

The opinion was first issued on January 26, 2021. Following rehearing, however, Justice Tangeman withdrew from the unanimous opinion and lodged a dissent.

Justice Tangement observed that a too-cavalier forfeiture rule offends the testator's intent, upturning the trust design merely "because [the beneficiaries] did not satisfy a requirement [the testator] did not impose: participation in mediation at their expense. In effect, the court imposed a terminating sanction against the nonappearing beneficiaries."

Moreover, Justice Tangeman noted that "[a] charitable gift must be carried into effect if it "can possibly be made good." (Estate of Tarrant(1951)38 Cal.2d 42, 46.) The majority's newfound requirement that a party participate in mediation before it can inherit ignores this command."

For my part, I agree with Justice Tangeman. And I have two additional concerns about the majority's opinion, concerns not addressed either by the majority or by the dissent:

Many Other Authorities Caution Against Involuntary Mediation:

The majority began by stating the probate court "has the power to order the parties into mediation." The court cited Probate Code 17206. But section 17206 does not refer to mediation. Section 17206 says, in its entirety: "The court in its discretion may make any orders and take any other action necessary or proper to dispose of the matters presented by the petition, including appointment of a temporary trustee to administer the trust in whole or in part." 

The Breslin majority cited no other authorities. Nor did it furnish any exposition, interpretation, or explanation how section 17206 stands for the proposition stated. Westlaw does not reveal any cases holding section 17206 authorizes orders compelling mediation, either.

This point is worth dwelling on because cases and rules in the civil context reject, rather emphatically, the concept of court-enforced mediation:

  • "[M]ediation is voluntary. (Jeld-Wen, Inc. v. Superior Court (2007)146 Cal.App.4th 536, 541.) Thus, the court cannot force parties to mediate. An order compelling mediation is antithetical to the entire concept of mediation. (Id. at p. 543.)
  • The decision to send a case to mediation "must be made by the court after consideration of the expressed views of the parties on the amenability of the case to mediation." (Cal. Rules of Court, rule 3.891(a)(1), (b).)
  • "Even after a case has been ordered to mediation, the mediator must inform the parties that participation in mediation is completely voluntary, refrain from coercing a party to continue its participation in the mediation and respect the right of each party to decide the extent of its participation or withdraw from the mediation." (Jeld-Wen, supra, 146 Cal.App.4th at p. 541; Cal. Rules of Court, rule 3.853.)
  • "Voluntary participation and self-determination are fundamental principles of mediation that apply both to mediations in which the parties voluntarily elect to mediate and to those in which the parties are required to go to mediation in a mandatory court mediation program or by court order." (Advisory Com. com., Deering’s Ann. Codes, Rules (2018 ed.) foll. rule 3.853.)" (Berkeley Cement, Inc. v. Regents of the Univ. of Cal. (2019) 30 Cal.App.5th 1133, 1141.)

None of these authorities is mentioned. Perhaps that is not particularly surprising, because Breslin is a probate case, and these are civil authorities. But the legal and equitable principles expressed in these civil cases suggest no such limitation. "Mediation is voluntary" is not the sort of proposition one expects simply to fall away simply by walking down the hall from civil to probate department. These principles deserved some sign of acknowledgement by the court. They received none.

Might Breslin Be Applied to Civil Mediation?

Presumably, the Second District supposed pegging its holding to a section of the Probate Code serves a sufficient firewall against its decision bleeding over to ordinary civil litigation.

But there may be some cause for doubt. The civil analog to section 17206 is Code of Civil Procedure section 128. Section 128 empowers the civil court "to compel obedience to its ... process ... in an action or proceeding pending therein," and "to control ... the conduct ... of all other persons in any manner connected with a judicial proceeding before it...."

This is not materially different from section 17206's language empowering the court to "make any orders and take any other action necessary or proper to dispose of the matters presented by the petition."

Breslin's vigorous deployment of section 17206 may well support a similar deployment of section 128.

Watch this space.

Tim Kowal helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes a newsletter of appellate tips for trial attorneys at www.tvalaw.com/articles. Contact Tim at tkowal@tvalaw.com or (714) 641-1232.