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Breslin Notices and Mediation in California Trust Dispute Litigation

by | Mar 21, 2023 | Trust & Estate Litigation, Trust Disputes

In last week’s Blog article we discussed private mediation as a tool for achieving closure in California trust litigation.  Buffington Law Firm’s trust litigation attorneys often use mediation in order to lessen our clients’ legal fees and to achieve their litigation objectives.  In this week’s article we will discuss what a “Breslin Notice” is, and how it affects parties to trust litigation, as well as interested parties to such litigation who may not wish to become involved in the actual ongoing lawsuit.

As discussed last week, a decision by the California Court of Appeal captioned Breslin v. Breslin [(2021) 62 Cal. App. 5th 801] allows the Probate Trial Court to require litigants to a trust dispute to engage in private mediation in an attempt to resolve the lawsuit.  Breslin, supra states that “[t]he probate court has the power to order the parties into mediation. (See Cal. Prob. Code § 17206 [“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”].)”  [Breslin, supra at 806].  That holding in and of itself is an important refinement of California law.  But Breslin goes far beyond that.  Prior California law had held that parties who chose not to participate in a Probate Court trust litigation trial were bound by the result of the trial. [Smith v. Szeyller (2019) 31 Cal.App.5th 450].  Breslin holds that non-litigants who receive notice of a court-ordered mediation but decline to participate in the mediation may have forfeited their right to object to any settlement agreement that might emerge from the mediation.  [Breslin, supra at 806].  Presumably a trial court has discretion to decline approval to a settlement agreement presented to it by stipulation or petition following a court-ordered mediation.  However, any experienced trial lawyer knows that it is very rare for courts not to approve a settlement.

The lesson here is that anyone who is an “interested person” to a court-ordered mediation, or frankly, any mediation, who receives notice of such in conformity with the parameters set forth in the Breslin decision, dare not “sit out” such mediation and decline to participate, unless that person or entity is willing to risk a settlement that might be highly unfavorable to him or her.  Gone are the days when a settlement reached in mediation only binds the parties to such written agreement.  As we discussed in last week’s Blog article, through the holding in Breslin the courts are implementing the strong public policy of fully and finally settling disputes out of court when possible.

The holding in Breslin makes it clear that for the binding nature of a Breslin mediation to apply the affected persons must have received proper notice of the mediation.  Normally the process works more or less as follows.  Generally a court will hold a first hearing on a Trust petition 90 or more days after it was filed.  The expectation is that by this time the proper “interested parties” will have received proper notice of the Trust petition, and those who intend to oppose it (“object”) will have filed with the court a formal objection to the Petition and become adverse parties (“objectors”) to the petitioner.  At this hearing (or any subsequent hearing that might occur) the Court may issue what has become known as a “Breslin Order” whereby the Probate Court orders a mandatory mediation.  Normally the Probate Court will order the Petitioner to give notice of the mediation in conformance with the parameters set forth in Breslin.  Citing from Breslin, supra at 804-805, the Court of Appeal explained with approval the precautionary nature of the notice of the mediation to all “interested parties”:

The mediation notice included the following:

“Mediation may result in a settlement of the matter that is the subject of the above-referenced cases and of any and all interested persons’ and parties’ interests therein. Settlement of the matter may result in an agreement for the distribution of assets of the above-referenced Trust and of the estate of Don F. Kirchner, Deceased, however those assets may be held. Settlement of the matter may also result in an award of attorneys’ fees to one or more parties under Smith v. Szeyller (2019) 31 Cal.App.5th 450 [242 Cal. Rptr. 3d 585]. Interested persons or parties who do not have counsel may attend the mediation and participate.

“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. Smith v. Szeyller[, supra,] 31 Cal.App.5th 450 … Rights of trust beneficiaries or prospective beneficiaries may be lost by the failure to participate in mediation.

“All represented parties (or his, her or their counsel) and all unrepresented parties that intend to participate in the mediation are requested to advise the undersigned of his, her or their intention to be present and participate by making contact via either email … or U.S. Mail. Notice to participate in mediation will not be accepted via telephone.”

[Breslin, supra at 804-805].

The lesson is clear enough.  An interested person who has rights under a trust for which a “Breslin Order” has been issued is subject to a risk of forfeiture if he or she fails to participate in the subject mediation.  Certainly a non-party to the litigation (i.e. interested persons who decide not to become “objectors” to the petition or who are not parties to the petition) can ignore the mediation. The parties who do participate in the mediation can craft a settlement which may negatively affect the rights of such persons, and the Court will not be sympathetic to later complaints about inequity.  Buffington Law Firm’s trust litigation attorneys have represented parties in Breslin-ordered mediation many times, to good effect.

If you are involved in trust litigation or a trust dispute, Buffington Law Firm invites you to contact us for a Free Legal Consultation.  All consultations are with an experienced trust litigation attorney and are fully protected by the attorney-client privilege.

Roger J. Buffington