Estate of Redfield–Know What You Are Settling

New California estate case.  Estate of Redfield (Court of Appeal, Second District, B216190).  Not a particular case of note from an estate or trust law perspective, but it highlights that it is important for parties to understand the issues that they are settling when they settle a case and to then timely appeal from an appealable order with which they do not agree.

In summary, one of decedent’s three children (True) filed a petition for letters of administration, claiming that decedent died intestate.

A second of decedent’s three children (Horan) contested the petition and claimed that decedent had left a will.  One week prior to death decedent had also given the second child a blank check which the second child used to withdraw $136,000 from decedent’s account.  The other two children (True and Roan) filed contests of the will, and also filed Cal. Prob. Code §850 petitions claiming that the $136,000 was part of the estate.

The parties engaged in settlement discussions and supposedly reached settlement.  Unfortunately the appellate decision does not clearly discuss how the settlement was memorialized (i.e., in a single writing, or multiple writings, or who signed) and the important terms.  A petition for approval of the settlement was filed with the court.  Objections to the petition and requests for clarification of the terms of settlement were filed.  Again the appellate decision does not clearly discuss the background facts as to how it was determined that a binding settlement had been reached; however, terms of settlement eventually were approved by the Court.  The will contests and the §850 petitions were withdrawn, and the §850 petitions were dismissed with prejudice.  Horan became co-administrator with another person.  No appeal was filed.  If nothing else, if additional facts had been provided, this case would have been an interesting discussion about how not to go about settling a case.

The following year the co-administrators filed a petition for preliminary distribution and also filed a first account and report.  True and Roan filed objections arguing that the accounting was deficient as it did not include in the estate the pre-death money that Horan withdrew from decedent’s bank account.  True and Roan also claimed that the settlement agreement was based on fraudulent misrepresentations and was illusory and void.

The trial court ruled that the $136,000 was part of the estate. Horan was ordered to return or account for the $136,000 by offset.

The Court of Appeal reversed, holding that the settlement and the related order dismissing with prejudice the §850 petitions constituted a final judgment on the merits that included the $136,000 amount as an issue that had been resolved and adjudicated.  The court noted that the order dismissing with prejudice the §850 was a final and appealable order. No appeal was taken.  The lessons from this case: understand the issues that are being settlement; only a written settlement signed by the parties or entered into the record in court and agreed to by the parties is valid; and be sure to timely appeal from an appealable order if the matter determined is sufficiently significant.

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