California Court of Appeal, First District, Fifth Division
Superior Court of Contra Costa County, No. MSP1200053, Joyce M. Cram, Judge.
[Copyrighted Material Omitted]
Brillant Law Firm, Walnut Creek, David J. Brillant, Erica L. Shepard; Vaught & Boutris, Oakland, and Jon R. Vaught, for Plaintiff and Respondent.
Bergquist, Wood, McIntosh & Seto and Steven N.H. Wood, Walnut Creek, for Defendant and Appellant.
In 2001, Frances E. McArthur created an inter vivos trust naming her three daughters— Deborah Tamisia, Kristi (Jensen) McArthur and Pamela McArthur— as coequal beneficiaries. Frances amended the trust instrument in 2011, allocating a greater portion of the trust property to Kristi and adding a provision requiring arbitration of disputes. After Frances's death, Pamela sued Kristi, alleging financial elder abuse and claiming the 2011 amendment was invalid due to Kristi's undue influence and Frances's lack of testamentary capacity. Kristi moved to compel arbitration of Pamela's claims under the terms of the 2011 trust amendment. The trial court denied the motion because Pamela was not a signatory to the arbitration agreement. We affirm.
In 2001, Frances created the Frances E. McArthur 2001 Living Trust, and provided that upon her death the trust estate would be divided equally among her three daughters or their issue. In January 2011, the trust was amended to
provide that, upon Frances's death, the trust estate would instead be distributed in accordance with a schedule of specific bequests with Kristi receiving the remainder. The amended trust document (2011 Trust) designated Kristi as a cotrustee and added a " Christian Dispute Resolution" provision that required mediation and if necessary arbitration of " any claim or dispute arising from or related to the Trust as amended." 
Frances died on August 12, 2011. In January 2012, Pamela filed a petition and action contesting the 2011 Trust, seeking removal of the trustee (Kristi), and suing for damages based on financial elder abuse. The pleading alleged that Kristi exercised undue influence over Frances when the 2011 Trust was executed, that Frances lacked testamentary capacity when she executed the amendment, and that Kristi committed financial elder abuse by wrongfully taking property from Frances " by way of donative transfer and testamentary bequests." Pamela sought a declaration that the 2011 Trust was void, compensatory and punitive damages, replacement of Kristi as trustee, and an order disqualifying Kristi as a trust beneficiary pursuant to Probate Code section 259.
Kristi filed a verified " Response and Objections" supported by multiple exhibits. She described a long history of Deborah's and Pamela's hostility toward her and mistreatment of Frances, which purportedly explained Frances's revision of her estate plan in January 2011. Kristi and the attorney who drafted the 2011 Trust averred that Frances was mentally lucid when she
executed the amendment and clearly communicated her testamentary wishes. In June 2011, Frances reportedly met one-on-one with the attorney and confirmed her estate plan with a certificate of independent review.
Kristi moved to compel arbitration of Pamela's claims pursuant to the arbitration provision in 2011 Trust. The trial court issued a tentative decision, without receiving opposition briefing from Pamela, denying the motion because " [t]here is no evidence that the beneficiaries gave either their consent or consideration to the arbitration clause in order to achieve the status of beneficiary. Thus there is no binding agreement between the parties compelling arbitration." Kristi then filed a " Reply" to the tentative decision, citing Suh v. Superior Court (2010) 181 Cal.App.4th 1504, 1513, 105 Cal.Rptr.3d 585 ( Suh ) (nonsignatories to an arbitration agreement may be bound by the agreement by equitable estoppel or on a third party beneficiary contract theory) and Estate of Bodger (1955) 130 Cal.App.2d 416, 424-425, 279 P.2d 61 (a trust is a third party beneficiary contract). On the eve of the hearing, Pamela filed an ...