USA – CALIFORNIA Trends and Developments Contributed by: Jennifer J. McCall, Paul Fraidenburgh, Alexandria Marx and Maria Williams, Pillsbury Winthrop Shaw Pittman LLP
pay their share of the arbitration fees, and submitted several pieces of evidence demonstrating this, includ- ing that the decedent’s only source of income was USD826 per month in Social Security benefits and the USD7,000 in his trust account was allocated to funeral and burial expenses. Accordingly, the trial court gave the defendant a choice: to pay all arbitration fees or waive their right to arbitrate the matter. The appellate court affirmed the ruling, holding that there was sub- stantial evidence that the estate was indigent and the choice was appropriate. Overall, this case shows the court’s willingness to consider the economic realities of parties when deciding whether to allow arbitration to proceed, and upholds the “long-standing public policy of ensuring that all litigants have access to the justice system for resolution of their grievances, without regard to their financial means.” The Hofer v Boladian Court of Appeal , Second Dis- trict, Division 5, California, 9 May 2025, 111 Cal. App. 5th 1 case demonstrates the court’s “use it or lose it” approach to the contractual right to arbitrate. In this case, the party seeking to compel arbitration engaged in six months of litigation prior to filing their motion to compel arbitration. They initiated the lawsuit by filing a complaint, sought two forms of preliminary injunctive relief, opposed a demurrer, propounded more than 700 discovery requests, demanded a jury trial, represented that they would be litigating sub- stantive motions, and posted jury fees. It was not until the opposing party filed a cross-complaint that the litigants filed the motion to compel arbitration. The court found that their behaviour constituted a waiver of their right to arbitrate, meaning, “the party opposing enforcement of a contractual agreement [proved] by clear and convincing evidence that the waiving party [(i)] knew of the contractual right and [(ii)] intentionally relinquished or abandoned it.”
This case highlights that if a party is aware of a con- tractual right to engage in arbitration and intends to utilise it in their dispute, he or she must not engage in actions to the contrary or will risk losing the right to do so. Recent California trust dispute cases Recent California cases demonstrate the courts’ ongoing effort to balance settlor intent, beneficiary rights, and the integrity of the probate system in trust litigation. In Haggerty v Thornton , the California Supreme Court clarified when statutory revocation procedures may be used to modify a trust. Unless a trust explicitly requires an exclusive method of amendment, statu- tory methods may still be used. In Packard v Packard , the court held that a petition to reform a trust to correct a mistake does not consti- tute a contest subject to statutory limitation periods. The court emphasised that the settlor’s intent remains paramount and that extrinsic evidence may be used to establish that intent where clear and convincing evidence of mistake exists. In Halperin v Halperin , the court reinforced that claims for intentional interference with an expected inherit- ance are only available where no adequate remedy exists in probate. Parties must therefore utilise pro- bate remedies where available rather than recasting disputes as tort claims. Finally, in Amundson v Catello , the court held that pro- spective heirs lack standing to bring partition actions before their ownership interests have been confirmed through probate. Only the personal representative has authority to act on behalf of the estate prior to final distribution.
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