Court Opinion

ID: 4560649
Source: CourtListenerOpinion
Date Created: 2020-08-26 23:02:10.768222+00
Date Added: 2024-06-11T11:19:21.039323
License: Public Domain

Filed 8/26/20 Selander v. Valentine CA6
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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 This opinion has not been certified for publication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.

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                      SIXTH APPELLATE DISTRICT

 DEREK SELANDER et al.,                                              H039828
                                                                    (Santa Clara County
           Plaintiffs and Respondents,                               Super. Ct. No. 1-08-CV-112230)

           v.

 JAMES VALENTINE, as Trustee, etc.,

           Defendant and Appellant.
         This appeal involves a long running dispute over the administration of a life
insurance trust (hereinafter, “KMP Trust”). Appellant James Valentine appeals from an
order removing him as trustee of the KMP Trust. Valentine challenges the order on
several grounds. We reject his contentions and affirm the order.

                                                 I. BACKGROUND
         A. Prior Case History
         Respondents Kurt and Derek Selander are the beneficiaries of a life insurance
trust, which was established by Kurt and Derek’s mother, Kelsey Phipps, to provide for
the “ ‘health, maintenance, education, travel, and welfare, and general welfare’ ” of her
two sons. Phipps died in October 2000. In May 2001, the KMP Trust was funded with
$20,524,234 from the proceeds of Phipps’s life insurance policy. Hal Selander, their
father, became guardian to Kurt and Derek, who were still minors at the time.
         Valentine knew Phipps personally and had helped her to set up the trust while
Phipps was alive. Phipps named Valentine as trustee. Valentine set his annual
compensation at $250,000. Between 2001 and 2004, Valentine pursued an investment
strategy of buying and holding high tech stocks, on behalf of the trust, for very short
periods of time. His practice was to sell the stocks when the stock price increased, but
not sell them when the price fell, which resulted in short-term gains, but unrealized long-
term losses. Starting in 2005, the beneficiaries began to request detailed financial reports
and eventually demanded formal accountings. Substantial litigation over the accountings
ensued, and ultimately Valentine was suspended as trustee. Following Valentine’s
suspension, the litigation continued, including numerous appeals to this court.1
       A petition to remove Valentine as trustee was filed by Hal Selander, as guardian
for Kurt, and later joined by Derek, and the interim trustees, who added a petition for
surcharges as damages. The petition to remove Valentine as trustee stated the following
grounds for removal: breach of the duty to provide beneficiaries with information under
Probate Code section 16060 et seq.,2 breach of the duty of loyalty under section 16004,
and violation of sections 16006 and 16007 for failure to preserve trust property consistent
with the Prudent Investor Act.
       Following the trial, the court made a number of findings. It found that Valentine
failed to report to the beneficiaries as required under section 16060 et seq. The court also
found that Valentine had breached his duty of loyalty by doing the following: by paying
himself excessive compensation before the trust was funded, by failing to adjust his
compensation downward as the value of the trust decreased, by failing to provide
adequate accountings, by resisting reasonable requests for information from the
beneficiaries, and by failing to comply with court orders. The court also concluded that

       1
         These appeals addressed insufficient accountings, sanctions, discovery, a SLAPP
motion, and a petition to remove Valentine for insolvency under Probate Code section
15642, among other issues. (See Guardianship of K.S. (2009) 177 Cal. App. 4th 1525;
Burdett v. Doyle (Dec. 15, 2009, H033061) [nonpub. opn.]; Selander v. Valentine (Aug.
30, 2010, H034324) [nonpub. opn]; and Burdett v. Caselli (Sept. 29, 2010, H033356)
[nonpub. opn.].)
       2
         Subsequent statutory references are to the Probate Code unless otherwise
provided.

                                             2
Valentine’s investment practices violated the Prudent Investor Act. However, because
the trust instrument gave Valentine “ ‘absolute discretion’ ” in investing, the court found
that Valentine’s “unconventional investment strategy”3 did not amount to a violation of
his duty to preserve trust property.
       Ultimately, although the trial court acknowledged it could have removed
Valentine, the court declined to impose the requested remedy of removal. Rather, the
court reinstated Valentine with conditions, requiring him: to pay sanctions incurred in
the litigation to the trust, to limit administrative costs to a fixed percentage of the value of
the trust, and to return some of his earned fees as a surcharge for his breaches of trust.
The court concluded: “Valentine may have been well-meaning but he was marginally
competent in his trust management. What is most troubling is his unrepentant attitude
concerning his investment strategy. His limited success in short-term trading was
principally the result of luck and good-fortune and not the result of a well-designed and
sophisticated plan of investment. He failed to take advantage of professional investment
advice. He put the assets of the Trust a[t] considerable risk and acted irresponsibly in
failing to recognize his limitations as a trustee. He would have disappointed the Settlor’s
trust she put in him. Did he technically violate the terms of the Trust in his investment
actions? No, because of the unfettered discretion it gives him. But he did violate the
duty to account and the duty of loyalty and with that he came very close to being
removed for mismanagement. Any future failure will certainly be evaluated in light of
these transgressions.”

       3
        An expert testified that had Valentine simply invested the trust assets in a total
stock market index fund and a municipal bond fund over the same time period, he could
have made the trust an additional $4 million. As it was, the expert calculated that the net
of Valentine’s short-term gains against his long-term losses was $616,657.

                                               3
       In February 2012, this court affirmed the trial court’s decision, concluding that the
court’s chosen remedy was a permissible exercise of its discretion. (Burdett v. Olson &
Le (Feb. 9, 2012, H035152) [nonpub. opn.].)
       B. Subsequent Proceedings
       At a May 2012 hearing, the trial court expressed its view that its “primary
objective” going forward would be to “preserve the trust funds for the beneficiaries.”
The court explained that this case had been “scandalously over-litigated . . . for years,
inuring to the benefit of lawyers and experts and not the beneficiaries.” The court
encouraged the parties to engage in “serious discussion about the pending issues to see if
this matter can be resolved.”
       In June 2012, the court directed Valentine to “either hire a professional to manage
the investments or provide by July 31 a written investment strategy and plan for the
administration of the trust with cost projections,” and the court barred the parties from
initiating “any litigation or spend[ing] any trust dollars on legal fees before” the next
hearing.
       At an August 2012 status hearing, the court expressed its disappointment that
“there’s been virtually no progress in resolving the multitude of issues in this case” since
the parties last met. The court indicated it was encouraged that there was apparently
“some discussion as to a global settlement.” At the conclusion of the hearing, the parties
agreed to go to mediation.
       At a November 2012 status hearing, the trial court learned that Valentine intended
to retain new counsel. As a result, Valentine’s former attorney sought permission from
the court to be paid from the KMP Trust. The beneficiaries agreed to pay Valentine’s
former attorney a fixed fee of $500,000 from the trust. Valentine’s former attorney
agreed to the compromised fee. Valentine objected and requested a continuance, but the
court nonetheless approved the fee request. The beneficiaries then requested a court
order to release trust funds to pay the mediation fee, as Valentine had not yet consented

                                              4
to payment. Valentine again objected. After the court indicated its intention to “set a
special hearing . . . on the question of whether or not Mr. Valentine should be removed as
the trustee if” he did not direct payment of the mediation fee, Valentine relented and
agreed to direct payment. The court then closed as follows: “This dispute has lingered
much too long. Much too much has been spent, and I’m chagrined that the purposes of
the trust have been thwarted. It is clear that a different approach needs to be taken and
the litigious past needs to be abandoned.”
       In December 2012, the beneficiaries filed a status report. In it, they informed the
court that they intended to file a petition to remove Valentine as trustee. The
beneficiaries reported that they had come to an agreement regarding outstanding fees, but
that Valentine was not a party to the agreement because Valentine and his attorney left
the mediation after they claimed that “they did not have all of the documents necessary to
address the issues.” The beneficiaries also asserted that Valentine had not cooperated in
the effort to pay Valentine’s former attorney. Finally, the beneficiaries contended that
Valentine had neither hired a professional financial manager nor submitted an investment
strategy, in violation of the court’s prior directions.
       Later that month, the court held a hearing. After some discussion on the issue of
paying Valentine’s former attorney, the court learned that Valentine no longer objected
and had directed that the payment be made. The court then moved to discuss the ongoing
mediation and the beneficiaries’ status report. Valentine disputed the substance of the
status report. The beneficiaries’ attorney asserted that Valentine had “all the documents,”
which was “more than enough information to resolve the fee issue . . . .” He asked the
court to “set a hearing to confirm that settlement,” and offered that “this is another—
excuse me for editorializing—example of how this is not working with Mr. Valentine.”
Based on the claimed lack of documents, the court ordered Valentine to identify any
documents that he needed from any party regarding the fee dispute. The court also stated
it would discuss the request for Valentine’s removal at a future hearing.

                                               5
       At a March 2013 status hearing, the court received a status update on the
mediation. The substance of the report was that the latest mediation was “unsuccessful in
part because” Valentine’s new attorney “left the mediation.” Valentine’s attorney
admitted he left for a “badly needed” dental appointment, but that he had his cell phone
and Valentine stayed at the mediation. Valentine’s attorney admitted that he accepted the
dental appointment after the mediation session had been scheduled, but believed he was
“within easy driving to get back to it if any progress was being made.” The court then
inquired as to the status of the contingent settlement agreement reached in the prior
mediation. Valentine’s attorney indicated that he was unable to advise Valentine on
whether to accept it because they needed to receive “all the documentation that was told
to us was available . . . .” The court then noted that Valentine had failed to timely
identify, as the court had previously ordered, any missing documents he required to
proceed with settlement discussions. After the hearing, the court ordered Valentine to
serve on counsel for the beneficiaries, by March 18, 2013, copies of the most recent
account statements from all financial institutions that hold trust assets.
       On May 8, 2013, the beneficiaries filed a petition to remove Valentine as trustee.
The beneficiaries alleged that since his reinstatement, Valentine had done nothing to
advance the purpose of the trust. Instead, they alleged that Valentine had caused the
parties to incur substantial legal fees to obtain court approval “of actions [that] all
[parties] agreed upon.” The beneficiaries also alleged that Valentine failed to approve
stipulations and orders for trust payments to the beneficiaries on a timely basis, that he
failed to provide them with current account statements from financial institutions that
hold trust assets, that he had failed to timely provide them with K-1’s so they could file
their individual tax returns, and that he had failed to comply with court orders. The
beneficiaries also asserted that since his reinstatement, Valentine had been a hostile
trustee who sought retribution for the prior effort to remove him. They noted Valentine’s
failure to make any good faith efforts to resolve any of the fee disputes.

                                               6
       Valentine filed a response on June 7, 2013, in which he specifically denied the
allegations in the petition and requested an evidentiary hearing.
       A hearing on the removal petition was held on June 17, 2013. The court stated
initially that it had set the hearing for one hour, but after receiving the response from
Valentine “asking for an evidentiary hearing,” the court extended the hearing to three
hours. Before the hearing began, an attorney for Valentine announced that he was
making a special appearance to request a continuance to allow him to prepare for the
evidentiary hearing. The attorney stated that Valentine had contacted him the prior
Wednesday about representation in this proceeding. He stated that he only learned on
Friday that the proceeding would be an evidentiary hearing, and so he needed a “short
continuance” to prepare. He further stated that if the court denied a continuance, he
“would not be able to proceed today in any capacity” and Valentine would represent
himself.
       The beneficiaries’ attorney asserted that it had been “known for a number of
months” that the beneficiaries would proceed with another petition to remove Valentine
as trustee. He also asserted that the beneficiaries would suffer detriment from a
continuance because “[t]he assets in this trust have not been attended to” for some time.
He noted that Valentine had not filed the requisite noticed motion, ex parte application, or
declaration in support of a continuance. Even overlooking that the request was
procedurally improper, the beneficiaries’ attorney argued that Valentine had not
established grounds for a continuance.
       The court denied the request for a continuance. The court recalled that the issue of
Valentine’s removal as trustee had been raised months earlier, that the court had
promised it would calendar the trustee removal issue if the parties could not resolve it,
and “[t]his has been pending for some significant period of time.” The court determined
that granting the continuance would be detrimental to the trust and prejudicial to the
beneficiaries, as the trust funds “have not been overseen by anyone managing those funds

                                              7
. . . since August of last year.” The court also observed that this attorney is “the tenth
lawyer representing Mr. Valentine in this matter,” “[a]nd, by my count, there have been
five in the last 12 months.” The court noted that Valentine’s prior counsel, who “to [the
court’s] knowledge was still [Valentine’s] counsel until he resigned here today,” had
“sent me a letter responding to this petition.” The court opined that Valentine’s “decision
to keep changing lawyers . . . is part of the problem in this case.”
       The hearing then proceeded with Valentine representing himself in pro per. Under
cross-examination, Valentine admitted that he did not provide trust account financial
statements to the beneficiaries in accordance with the court’s prior orders. Rather, he
admitted he had only provided statements “for every single account” on the previous
Friday. He also admitted that he had not done an accounting of trust assets since his
reinstatement as trustee.
       Valentine was asked whether he “refused to participate in [the first] mediation
because [he] took the position that [he] did not have sufficient records” to proceed. He
denied that he had done so, and also stated that the question was a violation of mediation
confidentiality under the Evidence Code. He admitted that prior to the mediation, he did
not attempt to settle any of the fee claims because, in his view, “[t]hey were not interested
in any settlements whatsoever.” He denied leaving the second mediation early after his
attorney left for a dental appointment. He admitted that he did not sign the settlement
agreement that resolved those fee issues. He conceded that “in the last seven years” he
had not agreed to settle “any issue” and, more specifically, that he had not “agreed to any
resolution of any issues” since mediation ended.
       When asked if he actually wrote the investment plan that he claimed to have
created, Valentine responded that he put it together after downloading “[o]ver a dozen”
samples from the internet. When asked what percentage of the investment plan came
from the sample investment plans, Valentine responded, “I don’t know.”

                                              8
       Derek testified that he had not received any financial statements that reflect trust
assets during the last 12 months. He stated that he had asked for this information many
times, but Valentine either did not respond or responded with incomplete information.
He stated that he asked Valentine for an account of trust assets in March 2013, but never
received an accounting. He also reported that he asked for a K-1 from the trust so that he
could complete his individual tax return, and Valentine responded by recommending that
he “[j]ust guesstimate [his] taxes.”
       Derek testified that he ran “specific string searches on Google for unique contents”
in Valentine’s investment plan, and discovered that 80 percent of the contents of
Valentine’s investment plan were copied from another investment plan that Derek found
on the internet. Derek admitted that he does “not feel comfortable giving Valentine”
certain information, because “[d]ealing with Valentine, I can honestly say he’s either
delusional or a pathological liar. I do not trust him at all.”
       At the close of the hearing, the court addressed the parties. The court expressed its
disappointment with Valentine’s assessment that he had complied with the court’s prior
orders. In the court’s view, “there’s no question that Valentine and his attorneys began
the scorched-earth practice” of litigation involving the KMP Trust. The court found that
there was “clearly animosity between Mr. Valentine and the beneficiaries.” The court
continued: “Further, there have been essentially two things that have . . . happened that
. . . are significant failures. One is the failure to provide a resolution of [the] professional
fees issue. This was failed on a number of grounds.” First, Valentine “opposed paying
his own attorney fees . . . even after that attorney compromised his fees . . . .” Second,
“he failed to timely identify documents that he needed to participate in the mediation
process. The Court set a time-line for that. And it wasn’t met.”
       The court also found that Valentine provided statements to the beneficiaries on an
untimely basis. The court determined that Valentine violated the court’s order to provide
trust account statements to the beneficiaries by March 18, 2013. And, since his

                                               9
reinstatement, the court found that there had been “no regular reporting” of financial
information to the beneficiaries. The court closed as follows: “Mr. Valentine, you just
don’t seem to understand. You don’t seem to get it. Therefore, you’re going to be
removed as the trustee of this KMP trust by court order today. You will no longer have
that responsibility.”
       The court later issued an order after evidentiary hearing removing Valentine as
trustee of the KMP Trust.
                                       II. DISCUSSION
       A. Request for Continuance
       Valentine argues that the trial court erred by not granting his request for a
continuance.
       In civil cases, continuances of trial are disfavored, the assigned trial dates are firm,
and parties and their counsel must regard the trial date as certain. (Cal. Rules of Court,
rule 3.1332(a) & (c).)4 A party seeking a continuance must make the request by a noticed
motion or an ex parte application, with supporting declarations, as soon as reasonably
practicable once the need for the continuance is discovered. (Rule 3.1332(b).) And then,
the trial court “may grant a continuance only on an affirmative showing of good cause
requiring the continuance.” (Rule 3.1332(c).) Good cause may be found where there is a
“substitution of trial counsel, but only where there is an affirmative showing that the
substitution is required in the interests of justice.” (Rule 3.1332(c)(4).) In ruling on a
motion for continuance, the trial court must consider all relevant facts and circumstances,
including the proximity of the trial date; whether previous continuances were granted; the
length of the requested continuance; prejudice that parties or witnesses will suffer as a
result of a continuance; whether the case is entitled to preferential trial setting; and
whether the interests of justice are best served by a continuance. (Rule 3.1332(d).)

       4
           Subsequent undesignated rule references are to the California Rules of Court.

                                              10
       We review the trial court’s denial of a request for a continuance under the abuse of
discretion standard. (County of San Bernardino v. Doria Mining & Engineering Corp.
(1977) 72 Cal. App. 3d 776, 784.) We will disturb the trial court’s determination only
where there has been a clear case of abuse and a miscarriage of justice. (Blank v. Kirwan
(1985) 39 Cal. 3d 311, 331.)
       In this case, the trial court did not abuse its discretion in denying Valentine’s
request for a continuance. Significantly, the request was not made by a noticed motion or
ex parte application; rather, the matter was raised orally on the date set for the evidentiary
hearing. It was also not made when Valentine ascertained the need for continuance prior
to the hearing. The trial court specifically found that the current trustee removal petition
had been pending for a “significant period of time,” and so Valentine had advance notice
that he would need to retain counsel. In sum, the request was procedurally inadequate
and untimely.
       In addition, Valentine failed to show good cause that his substitution of attorneys
was in the interests of justice. In considering the request, the court properly considered
the relevant circumstances of the case, including the fact that Valentine’s new attorney
would have been his tenth attorney in this matter, and his fifth attorney in the last 12
months. The court also properly considered whether a continuance would prejudice the
other parties, including the beneficiaries, finding that the trust assets had been unattended
and unmanaged for quite some time, and another delay would be detrimental to the trust.
Under these circumstances, the interests of justice would not have been served by a
continuance. Accordingly, the trial court did not abuse its discretion by declining to grant
a continuance.
       B. Removal of Trustee
          1. The Trial Court Did Not Abuse Its Discretion
       Valentine challenges his removal as trustee, arguing that there were insufficient
grounds to justify it.

                                             11
       “A trustee may be removed in accordance with the trust instrument, by the court
on its own motion, or on petition of a settlor, cotrustee, or beneficiary under Section
17200.” (§ 15642, subd. (a).) Section 15642, subdivision (b) sets forth grounds for
removal of a trustee, which includes “[w]here the trustee has committed a breach of the
trust” and “[w]here the trustee fails or declines to act.” The breach of the duty of loyalty,
or any of several other statutory duties, is considered a breach of trust. (§ 16400.) A
trustee has a duty of loyalty to administer the trust solely in the interest of the
beneficiaries (§ 16002, subd. (a)), to keep beneficiaries “reasonably informed of the trust
and its administration” (§ 16060), and “on reasonable request by a beneficiary, the trustee
shall report to the beneficiary by providing requested information to the beneficiary
relating to the administration of the trust relevant to the beneficiary’s interest.”
(§ 16061.) Section 16062 sets forth a trustee’s obligation to provide an annual
accounting of trust assets to each beneficiary.
       In addition, “[h]ostility between the beneficiary and the trustee is a ground for
removal of the trustee when the hostility impairs the proper administration of the trust.”
(Estate of Gilmaker (1962) 57 Cal. 2d 627, 632 (Gilmaker).) “The purpose of removing a
trustee is not to inflict a penalty for past action, but to preserve the trust assets.
[Citation.] ‘The question in each case is whether the circumstances are such that the
continuance of the trustee in office would be detrimental to the trust.’ ” (Getty v. Getty
(1988) 205 Cal. App. 3d 134, 139-140 (Getty).)
       “The removal and substitution of a trustee is largely within the discretion of the
trial court.” (Gilmaker, supra, 57 Cal.2d at p. 633.) We therefore review an order
removing a trustee for an abuse of discretion. (Trolan v. Trolan (2019) 31 Cal. App. 5th
939, 957 (Trolan).) The trial court’s factual findings, in turn, are reviewed for substantial
evidence. (Khani v. Ford Motor Co. (2013) 215 Cal. App. 4th 916, 920.) “We measure
the trial court’s exercise of discretion against the legal principles governing the subject of
its action. [Citations.] ‘ “The scope of discretion always resides in the particular law

                                               12
being applied, i.e., in the ‘legal principles governing the subject of [the] action . . . .’
Action that transgresses the confines of the applicable principles of law is outside the
scope of discretion and we call such action an ‘abuse’ of discretion.” ’ ” (Trolan, at pp.
957-958.) “ ‘To determine if a court abused its discretion, we must thus consider “the
legal principles and policies that should have guided the court’s actions.” ’ ” (Id. at p.
958.)
        In this case, substantial evidence supports the trial court’s findings that Valentine
breached several statutory duties owed by a trustee, including his duty to keep the
beneficiaries reasonably informed of the trust and its administration and his duty to
provide information when requested by a beneficiary. Derek reported that Valentine
failed to adequately respond to his requests for financial information and account
statements of trust assets, and that Valentine failed to provide requested tax information,
instead advising Derek to “guesstimate [his] taxes.”
        Substantial evidence also supports the trial court’s finding that Valentine failed to
follow court orders to identify documents that he needed to settle the fee claims and to
provide trust account statements by March 18, 2013. When a trustee “fails or declines to
act,” as Valentine did here, he is subject to removal. (§ 15642, subd. (b).)
        Finally, substantial evidence supports the trial court’s finding that animosity
between the trustee and the beneficiaries impaired the administration of the trust. Derek
testified that Valentine was either “delusional or a pathological liar,” and as a result he
“did not trust Valentine.” The record reflects Valentine was unable or unwilling to settle
past grievances and put aside his documented tendency toward scorched-earth litigation
involving the KMP Trust. It was a reasonable inference that Valentine’s conduct
reflected an intense “animosity between [him] and the beneficiaries.” In short,
substantial evidence supported the trial court’s implied finding that “ ‘the circumstances
[were] such that the continuance of the trustee in office would be detrimental to the

                                               13
trust.’ ” (Getty, supra, Cal.App.3d at pp. 139-140.) Thus, Valentine’s removal as trustee
was not an abuse of discretion.
       Valentine contends that under the heightened standard for removal that applies to
named trustees, the circumstances of this case did not warrant his removal. We disagree.
“[T]he court will not ordinarily remove a Trustee appointed by the creator of the trust.”
(Estate of Bixby (1961) 55 Cal. 2d 819, 826.) Thus, a “settlor’s named trustee will be
removed only for extreme grounds, such as incapacity, dishonesty, or lack of the
qualifications necessary to administer the trust.” (Estate of Gilliland (1977) 73
Cal. App. 3d 515, 528.)
       In this case, the evidence showed that Valentine continued to defy court orders, he
failed to respond to reasonable requests for information, he failed to timely furnish
financial information that he was obligated to provide, and he signaled an intent to
continue wasting trust funds. This was essentially a repetition of the conduct that nearly
caused the trial court to remove him for mismanagement in the prior trustee removal
proceeding. It also led the the trial court to warn Valentine that “[a]ny future failure will
certainly be evaluated in light of these transgressions.” In our view, these circumstances
constitute “extreme grounds,” which warranted Valentine’s removal as trustee. We find
no error in his removal.
          2. There Was No Violation of Mediation Confidentiality That Materially
             Affected Valentine’s Substantial Rights
       Valentine argues that the contents of the mediation were disclosed at the
evidentiary hearing, in violation of the Evidence Code. He points specifically to when he
was asked to discuss whether: (1) he left the first mediation early, (2) he knew that a
settlement agreement had been reached between the parties, and (3) he left the second
mediation early after his attorney went to a doctor’s appointment.
       Evidence Code “[s]ection 1119 governs the general admissibility of oral and
written communications generated during the mediation process. Subdivision (a)

                                             14
provides in pertinent part that ‘[n]o evidence of anything said or any admission made for
the purpose of, in the course of, or pursuant to, a mediation . . . is admissible or subject to
discovery, and disclosure of the evidence shall not be compelled, in any . . . civil
action . . . .’ (Italics added.)” (Cassel v. Superior Court (2011) 51 Cal. 4th 113, 123.)
“Subdivision (c) of [Evidence Code] section 1119 further provides that ‘[a]ll
communications, negotiations, or settlement discussions by and between participants in
the course of a mediation . . . shall remain confidential.’ (Italics added.)” (Id. at pp. 123-
124.) Thus, “absent an express statutory exception, all discussions conducted in
preparation for a mediation, as well as all mediation-related communications that take
place during the mediation itself, are protected from disclosure.” (Id. at p. 128.)
       Respondents contend that there was no error. Citing Foxgate Homeowners’ Assn.
v. Bramalea California, Inc. (2001) 26 Cal. 4th 1 (Foxgate), respondents argue that “there
was no violation of mediation confidentiality because counsel for the beneficiaries was
entitled to report Valentine’s obstructive conduct to the court.” In Foxgate, our high
court determined that “[t]o carry out the purpose of encouraging mediation by ensuring
confidentiality, the statutory scheme . . . unqualifiedly bars disclosure of communications
made during mediation absent an express statutory exception.” (Id. at p. 15.) Thus, the
court concluded that a declaration of counsel violated the Evidence Code, where that
declaration disclosed mediation-related communications for the purpose of establishing
bad-faith conduct at mediation. (Id. at p. 18.) However, the court noted that “[t]o the
extent that the declaration of counsel stated that the mediator had ordered the parties to be
present with their experts, there was no violation. As noted earlier, neither [Evidence
Code] section 1119 nor [Evidence Code] section 1121 prohibits a party from revealing or
reporting to the court about noncommunicative conduct, including violation of the orders
of a mediator or the court during mediation.” (Id. at p. 18, fn. 14, italics added.)
       We need not determine whether or to what extent the complained-of questions
violated mediation confidentiality because no error, assuming there was error, prejudiced

                                              15
Valentine.5 “The remedy for violation of the confidentiality of mediation is that stated in
[Evidence Code] section 1128: ‘Any reference to a mediation during any subsequent trial
is an irregularity in the proceedings of the trial for purposes of Section 657 of the Code of
Civil Procedure. Any reference to a mediation during any other subsequent noncriminal
proceeding is grounds for vacating or modifying the decision in that proceeding, in whole
or in part, and granting a new or further hearing on all or part of the issues, if the
reference materially affected the substantial rights of the party requesting relief.’ ”
(Foxgate, supra, 26 Cal.4th at p. 18, italics added.)
       Here, none of the complained-of questions materially affected Valentine’s
substantial rights. In pronouncing its decision, the trial court made no reference to
Valentine’s statements or conduct at any mediation session. Instead, in removing
Valentine as trustee, the court specifically found that Valentine had violated statutory
duties by providing statements to the beneficiaries on an untimely basis, by failing to
meet court deadlines for providing trust account statements, and by not engaging in
“regular reporting” of financial information the beneficiaries. The court also found that
there was “clearly animosity” between Valentine and the beneficiaries that warranted his
removal. Even assuming some or all of the complained-of questions violated mediation
confidentiality, the violation did not materially affect Valentine’s substantial rights in the
trustee removal proceeding.
       C. Missing Record
       Valentine asserts that his due process rights were violated because he was forced
to file his opening brief without a complete record on appeal. Respondents concede that
       5
         Arguably, some of the complained-of questions did concern noncommunicative
conduct. For instance, one question was whether Valentine left the first mediation
session early. However, in asking Valentine why he left early, the beneficiaries’ attorney
asked Valentine if he “took the position that [he] did not have sufficient records” to
proceed. This is clearly a reference to something Valentine said at the mediation. Thus,
while there was a noncommunicative aspect to this revelation (i.e., he left early), there
was also clearly a reference made to communications that occurred at the mediation.

                                              16
the transcripts for two hearings held on June 29, 2012, and August 31, 2012, appear to be
missing from the record on appeal. However, respondents claim that Valentine has
shown no prejudice from the omission.
       We agree with respondents. “ ‘To establish prejudice, a party must show “a
reasonable probability that in the absence of the error, a result more favorable to [it]
would have been reached.” [Citation.]’ [Citation.]” (Trolan, supra, 31 Cal.App.5th at
p. 950.) Valentine has not shown that the omission of the hearing transcripts prejudiced
him. Respondent notes that the transcript of the June 29, 2012 hearing appears in the
clerk’s transcript. Respondent also notes that an order following the August 31, 2012
hearing is in the record, and that the order “merely stated that the parties stipulated to
mediate certain issues, directed the parties to provide their adversaries with copies of
specified documents, scheduled future proceedings, and ordered all trust assets to be
placed in a blocked account.” Valentine does not challenge any of those rulings. We
reject Valentine’s due process argument, as he fails to show any prejudice from the
omission of the identified reporter’s transcripts.6
                                     III. DISPOSITION
       The order is affirmed. Respondents shall recover their costs on appeal.

       6
        We also observe that Valentine designated a record on appeal in excess of 10,000
pages, spanning years of litigation. In his brief, he provided no citations to the record in
his 19-page statement of facts, and cited only to the transcript of the June 17, 2013
evidentiary hearing in the argument section of his brief. Under these circumstances, we
find no prejudice to Valentine due to the missing reporter’s transcripts

                                              17
                                        _______________________________
                                        Greenwood, P.J.

WE CONCUR:

_____________________________________
 Elia, J.

_____________________________________
 Danner, J.

Selander et al. v. Valentine
No. H039828