Litigation Alert

• Publication year: 2021
• Author: By Jeremiah J. Moffit, Esq.,* Courtney A. Sorensen, Esq.* Craig S. Weinstein, Esq.*, and Sara Z. May, Esq.*

LITIGATION ALERT

By Jeremiah J. Moffit, Esq.,* Courtney A. Sorensen, Esq.* Craig S. Weinstein, Esq.*, and Sara Z. May, Esq.*

I. A COURT HAS POWER TO ORDER PARTIES TO MEDIATION AND A TRUST BENEFICIARY WHO RECEIVES NOTICE OF COURT-ORDERED MEDIATION BUT DOES NOT PARTICIPATE IS BOUND BY THE RESULT OF THE MEDIATION

Breslin v. Breslin (2021) 62 Cal.App.5th 801

The Second District Court of Appeal held that a trust beneficiary, who receives notice of court-ordered mediation but fails to participate in the mediation, is bound by the result.

The trustee of a decedent's trust petitioned the probate court to determine the trust beneficiaries. The trustee then served each potential beneficiary, including the appellants, with notice of the petition. The probate court confirmed the successor trustee and ordered mediation among the interested parties. The notice of mediation served on the potential beneficiaries included a warning that any non-participating persons or parties may nevertheless be bound by the terms of any agreement reached. The appellants received notice of the mediation, but did not participate. The participating parties then reached a settlement that excluded the nonparticipating parties as beneficiaries. The probate court approved the settlement. The non-participating parties appealed.

The Court of Appeal affirmed. Probate Code section 17206 gives the probate court the power to order the parties into mediation. The power conferred to the probate court under section 17206 is an exception to the rules governing orders for mediation stated in Jeld-Wen, Inc. v. Superior Court (2007) 146 Cal.App.4th 536. A party who chooses not to participate in the trial of a probate matter cannot thereafter complain about a settlement reached by the participating parties. Although a mediation is not a trial, it is an essential part of the probate proceedings. Accordingly, a party may not ignore the probate court's order to participate in mediation and then challenge the result.

II. A PERSON WHO IS A TRUSTEE, SETTLOR, AND BENEFICIARY OF A REVOCABLE TRUST QUALIFIES AS A LANDLORD FOR PURPOSES OF RENT CONTROL ORDINANCES

Boshernitsan v. Bach (2021) 61 Cal.App.5th 883

The First District Court of Appeal held that natural persons who are acting as trustees of a revocable living trust and are also the trust's settlors and beneficiaries qualify as a "landlord" under San Francisco's rent control ordinance.

After transferring title to their revocable living trust, owners of a two-unit building in San Francisco served the tenants with a notice of termination. The owners sought to move their mother into the tenants' unit under the family move-in provision of the San Francisco rent control ordinance, which provides a "landlord" may evict renters from a unit to make the unit available for a close relative of the landlord. Following the tenants' refusal to vacate the premises, the owners brought an unlawful detainer action. The tenants argued that the owners were not the "landlord" because a trust is not a "natural person." The owners claimed that they, as trustees, not the trust itself, hold title in the property and therefore were the landlord. The trial court sustained the demurrer without leave to amend and entered a judgment for the tenants. The owners appealed.

The Court of Appeal reversed...