Applicable Procedure to Approve a Probate Settlement Agreement

Some Probate related issues may rely on the Code of Civil Procedure for a vehicle to bring a matter before the court. Probate Code section 1000 states that “[e]xcept to the extent that this code provides applicable rules, the rules of practice applicable to civil actions,…apply to, and constitute the rules of practice in, proceedings under this code.”

Probate Code section 17200 is the applicable statute governing a request for Court approval of settlement terms involving a trust. Upon approval of the terms, the Court would then consequently accept the request to retain jurisdiction under Code of Civil Procedure 664.6. As such, a Court will treat a to Motion to Approve A Probate Settlement Agreement as a Petition under Probate Code section 17200.

A motion under Code of Civil Procedure section 664.6 is normally the method used to resolve disputes arising over settlement agreements. Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2019) ¶ 12:951. The Court may adjudicate terms of the settlement, under such a motion. Id. at 12:955.8.

Role of the Court in Approval

Pursuant to Probate Code section 17200, upon Petition by the trustee or beneficiary of a trust, the court may pass on the internal affairs of the trust. Probate Code section 17200 provides a non-exclusive list of items the Court may address. This list includes the ability for the Court to pass on the acts of the Trustees, including the exercise of discretionary powers, such as entering a settlement agreement. Probate Code, § 17200(b)(5). It also allows the Court to instruct the Trustee. Probate Code, §17200(b)(6).

Multiple Trustees

Probate Code section 15620. That section states “[u]nless otherwise provided in the trust instrument, a power vested in two or more trustees may only be exercised by their unanimous action.”

While trustees must act unanimously when taking actions on behalf of the trust, they each owe an individual fiduciary duty to act in accordance with the duties set forth in Probate Code section 15000, et seq. (Prob. Code, § 16000.) “Tort liability arises where a fiduciary owes a duty to another, breaches the duty, and that breach proximately causes damage.” Gaab v. Reese, Cal. Practice Guide: Civ. Proc. Before Trial Claims and Defenses (The Rutter Group 2018) ¶ 3:500; see also Meister v. Mensinger (2014) 230 Cal.App.4th 381, 395.

“Where a breach of fiduciary duties results in liability to more than one co-trustee, the liability is joint and several.” Cagnolatti v. Guinn (1983) 140 Cal.App.3d 42, 49. Thus, Co-Trustees may be joint tortfeasors. Id.

Objecting Parties

Objecting parties forfeit their right to object to the approval of the settlement by failing to appear and file responses/objections to the initial trustee’s petition and by failing to participate in the mediation. Smith v. Szeyller (2019) 31 Cal.App.5th 450.