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Ronald Powell v. Reginald Powell

September 11, 2012

RONALD POWELL, PLAINTIFF AND RESPONDENT,
v.
REGINALD POWELL, DEFENDANT AND APPELLANT; JAMES POWELL ET AL., DEFENDANTS AND RESPONDENTS.



(Super. Ct. No. 152083)

The opinion of the court was delivered by: Mauro , J.

Powell v. Powell

CA3

NOT TO BE PUBLISHED

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

Brothers Ronald, Reginald and James Powell, and sister Anne Maretti, were involved in various legal disputes regarding the estate of their mother, Mary Powell.*fn1 Ronald, Reginald and James subsequently entered into a settlement agreement (agreement) providing, among other things, that (1) Ronald would pay $225,000 to Reginald, James, Anne, and the law firm Armstrong & Associates (Armstrong law firm);*fn2 (2) certain estate items would be given to specified siblings; (3) Ronald would receive the remaining estate assets; (4) the various legal actions would be dismissed; and (5) any disputes regarding the agreement would be submitted to mediation and then to binding arbitration.

The agreement was drafted to include Anne as a party to a global settlement, but expressly provided that if Anne did not sign the agreement by a specified date, Reginald and James would indemnify Ronald against claims by Anne. Anne never signed the agreement and objected to the agreement's proposed distribution of estate assets. Ronald nonetheless attempted to pay $225,000 to Anne and the other siblings pursuant to the agreement, but Anne refused to endorse the check. Other disagreements subsequently arose between the siblings regarding the agreement.

Ronald initiated an interpleader action to determine the appropriate payment under the agreement, depositing $217,122.30 with the trial court based on Ronald's assertion that he had not received certain sums due him under the agreement. Reginald then filed a petition in the interpleader action to compel arbitration, arguing that the agreement required arbitration of the dispute between the parties.

The trial court denied the petition to compel arbitration, concluding the only issue that could be raised between an interpleader stakeholder and a claimant is whether the elements of an interpleader action are present. The trial court ruled that Reginald could not compel Ronald to arbitrate because Ronald had disclaimed his interest in the interpleaded funds, leaving nothing to arbitrate as to Ronald. In addition, the trial court concluded that Reginald could not compel Anne or the Armstrong law firm to arbitrate because they were not parties to the agreement and never consented to binding arbitration.

Reginald now contends on appeal that the trial court erred in denying his petition to compel arbitration because (1) the agreement provides that any unresolved dispute among the parties is to be determined by binding arbitration, and the fact that Anne and the Armstrong law firm are not parties to the agreement does not preclude arbitration between Ronald, Reginald and James; (2) Ronald did not deposit the full $225,000 settlement amount in the interpleader action; and (3) Ronald is more than just a "stakeholder," he is "an integral part of the conflict" between the parties.

Given the context of this appeal, it is important to point out what is not presented for our consideration. There is no contention that the agreement is invalid, that the probate proceeding was prematurely or improperly closed, or that Ronald lacks authority to pay $225,000 to his siblings or the Armstrong law firm. The only issue presented is whether binding arbitration should be compelled under the agreement.

We conclude the trial court did not err in denying the petition to compel arbitration. According to the pleadings in this interpleader action, Anne and the Armstrong law firm are named defendants. Although Anne defaulted, nothing in the record shows a final judgment against her, and we cannot say that she is completely foreclosed from asserting a claim to the interpleaded money. Reginald seeks binding arbitration to determine whether Anne can be excluded from the interpleaded funds,*fn3 but Anne did not agree to binding arbitration and Reginald has not established a legal basis on this record to impose binding arbitration on nonsignatories. Moreover, Reginald's claims against Ronald do not prevent Ronald from being a disinterested stakeholder in this interpleader action, and Reginald's affirmative claims must be asserted in a separate action.

We will affirm the order denying Reginald's petition to compel arbitration.

BACKGROUND

In addition to the instant interpleader action, some of the siblings were involved in three other legal proceedings: Conservatorship of Mary Powell; Estate of Mary Powell; and James Powell et al. v. Ronald Powell (the civil action). In the civil action, Reginald and James alleged that Ronald engaged in misconduct in the administration of Mary's estate. Anne is not a party to the civil action.

Following mediation with retired Judge Cecily Bond, Ronald, Reginald and James agreed to settle their disputes. The agreement provided, among other things, that (1) Ronald would pay $225,000 to Reginald, James, Anne and the Armstrong law firm; (2) the $225,000 would be paid not later than seven days after the trial court released "the joint tenancy funds"; (3) Anne would receive a china cabinet, table and chairs owned by Mary; (4) James would receive a cross and sapphire pendent given to Mary by James and Carol Powell; (5) Ronald would receive all other assets owned by Mary at the time of her death; (6) the three pending actions would be dismissed with a full release of all claims;*fn4 (7) James and Anne would sign documents waiving rights to fees and costs in Conservatorship of Mary Powell; (8) Reginald, James and Anne would sign documents withdrawing their objections to Ronald's accounting and his request for attorney's fees, and consenting to the distribution to Ronald of estate assets in Estate of Mary Powell; (9) Reginald and James would withdraw a lis pendens they recorded; (10) Reginald, James and Anne would defend and indemnify Ronald against any liens, subrogation claims and other rights that may be asserted against the amount paid in settlement of the civil action or against any recovery by plaintiffs in the civil action; (11) if Anne did not sign the agreement by October 15, 2009, James and Reginald would defend and indemnify Ronald from any claim by Anne relating to Mary's estate, conservatorship and non-probate transfers; (12) any dispute ...


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