Trusts, Due Process, and Mediated Settlements

You have to love an appellate decision that starts off like this: “The legal historian Frederic William Maitland is reputed to have said, ‘The law is a seamless web.’ He didn’t.” Breslin v. Breslin, 62 Cal. App. 5th 801 (Cal. Ct. App. 2021)(footnote omitted). For a copy of the decision: https://casetext.com/case/breslin-v-breslin-3

The Breslin case is alarming. In Breslin, a decedent, Don Kirshner (not the Rock Concert guy, who died in Florida with his own messy estate), left an estate valued at $3 to $4 million, no surviving spouse or children, and a bungled estate plan. The charities were named on an Exhibit A to the trust which couldn’t be found. However, there were notes in the estate planning binder listing 24 charities and what appeared to be handwritten percentages. The trustee, Breslin, filed a petition to determine beneficiaries of the trust, providing notice to each of the charities. Only a few of the charities filed responses to the petition. The probate court ordered all interested parties (including Kirshner’s intestate heirs) to mediation and issued a notice of mediation, which was served (by one of the charities) upon all of the interested parties. The notice included a warning: “Mediation may result in settlement of the matter …. Non-participating persons or parties who receive notice of the date, time and place of the mediation may be bound by the terms of any agreement reached at mediation without further action by the Court or further hearing.”

Only five of the charities and the intestate heirs attended the mediation. A settlement was reached which excluded the non-participating charities from receiving any portion of the trust. One of the charities filed a petition for court approval of the settlement, which was served on all interested parties. The non-participating charities objected.

The probate court approved the settlement over the excluded charities’ objection, and the Second Appellate District in Ventura County affirmed. The court also rejected claims that Breslin, as trustee, breached a duty to the excluded charities and that the order approving settlement was void due to extrinsic fraud.

So what is the takeaway? If you’re an attorney, you should make sure that your beneficiary or claimant client’s rights are protected and that legal proceedings which may impact those rights are closely monitored. Don’t assume that someone else with the same or similar standing will cover it for you or your client. As a mediator I have handled plenty of mediations where one or more interested parties sit it out; it appears that decision could have major consequences. You can’t win it if you’re not in it.