The Viability of Your Mediation Settlement Depends on You: The Roth Versus Jelley Case

A recent decision from the California Court of Appeals from a trial court decision in Contra Costa County (Roth v. Jelley, A155742 filed February 24, 2020), stresses the importance of the absolute necessity to make sure that the proper parties are either part of the mediation agreement or received notice of the settlement.

 1/Essential Facts Pertaining to the Case

The husband died leaving a surviving wife.  They did not have children together. The husband had three children by a prior marriage and the wife had one child by a prior marriage.

The husband’s will created a trust for his wife for her life and stipulated that on the wife’s death the trust assets would be distributed among the husband’s three children and the wife’s one child — each child receiving ¼ of the estate.  If a child were to die before the wife, his/her share would be distributed to his/her children.

A dispute ensured and a settlement agreement was reached among the surviving wife, the husband’s three children and the wife’s child.  Pursuant to the terms of the agreement, the husband’s three children disclaimed their interest in their father’s estate.  The probate court issued a decree of final distribution in 1991 (the 1991 decree) based on the settlement agreement that upon wife's death the trust would be distributed to the wife's son.

Before the wife passed away, one of husband’s son died survived by one child, Mark. Upon the wife’s death in 2016, Mark filed a lawsuit against the 1991 decree arguing that the order was void for lack of notice and that, as a result, it did not eliminate him as a beneficiary of his grandfather’ trust. The probate court denied Mark’s petition and he appealed.

2/ The Court of Appeals Decision

The Court of Appeals reversed the decision finding that the 1991 decree was binding on Mark, even though he received no notice of the settlement agreement. As a result, Mark had a due process right to notice and to be given the chance to be heard before the 1991 decree that eliminated his interest in the trust. In other words, the Appeals court stated that Mark had a property interest in the trust that was adversely affected by the 1991 order, and that he was therefore entitled to notice of the proceeding and to be given the opportunity to object.

When entering into settlement agreement it is crucial to always make sure that the rights of all parties affected by the settlement are respected either by having these parties included in the settlement agreement, or by giving them a notice of the proposed agreement.

3/ Take Away from the Court of Appeals Decision

a/ Based on the above decision of the Court of Appeals, If you are a participant to a mediation, whether you are assisted by a lawyer or not, it is your duty to disclose at least the name of any person and/or entities that might be impacted by a settlement.

b/ Based on the above decision of the Court of Appeal, if you are a lawyer or a mediator working on a settlement, it should become good practice:

b-1/ Before you start the mediation process, to use any means possible, to identify all the persons and/or entities potentially affected by an agreement.

b-2/ Once a settlement has been reached, you will also need to make sure that all the persons and/or entities potentially affected by the agreement have received notice of such agreement.

Please contact us if we can be of assistance in working with a family you know to help resolve or manage conflict. At Mediation Path Silicon Valley, we have the passion and the experience to assist families in distress.