Court Opinion

ID: 9882307
Source: CourtListenerOpinion
Date Created: 2023-10-05 18:03:42.078533+00
Date Added: 2024-06-11T14:58:59.272457
License: Public Domain

NOTICE: NOT FOR OFFICIAL PUBLICATION.
  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
                  AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

                                     IN THE
              ARIZONA COURT OF APPEALS
                                 DIVISION ONE

                               In the Matter of the:

         FURST FAMILY TRUST, dated July 1, 1988, as amended.
        _____________________________________________________
                  ROBERT G. FURST; ZIA TRUST INC.,
                          Petitioners/Appellees,

                                         v.

                    LINDA MAYNE, Respondent/Appellant.

                              No. 1 CA-CV 22-0646
                                FILED 10-5-2023

            Appeal from the Superior Court in Maricopa County
                           No. PB2019-001318
                The Honorable Melody G. Harmon, Judge

                                   AFFIRMED

                                    COUNSEL

Taylor Young Appeals PLLC, Phoenix
By Taylor Young
Counsel for Respondent/Appellant

Forrester & Worth, PLLC, Phoenix
By John H. Worth, Byron H. Forrester
Counsel for Petitioner/Appellee Zia Trust, Inc.
                        FURST, ET AL. v. MAYNE
                          Decision of the Court

                      MEMORANDUM DECISION

Judge Samuel A. Thumma delivered the decision of the Court, in which
Presiding Judge D. Steven Williams and Judge Paul J. McMurdie joined.

T H U M M A, Judge:

¶1             Linda Mayne appeals from the probate court’s order
approving a $200,000 settlement between a family trust and Robert Furst, a
co-beneficiary and Linda’s brother. Because Linda has shown no error, the
order is affirmed.

                 FACTS AND PROCEDURAL HISTORY

¶2            This appeal is the most recent chapter in a high-conflict
probate dispute between siblings over a family trust that has included
several cases filed in Arizona and California. Furst v. Mayne, 1 CA-CV 21-
0668, 2022 WL 17258422 (Ariz. App. Nov. 29, 2022) (mem. dec.). The trust,
established in 1988, provided a mechanism to care for the parents of Linda
and Robert. Robert and Linda were appointed co-trustees in 2018. By
September 2019, after their father died and the siblings could not agree on
trust management, their mother sought and obtained a court order
appointing Zia Trust as trustee. Substantial litigation followed.

¶3             In October 2020, Robert sought reimbursement for expenses
he claimed he incurred while caring for their mother. The petition alleged
that, after their father died but before Zia’s appointment, Linda “froze all
of the assets of the” trust, forcing him to spend his own funds for their
mother’s care. The petition included an exhibit reflecting more than
$200,000 in expenses. Zia and Linda first objected to the petition, but Linda
later withdrew her objection, stating that “the responsibility to litigate the
issue rests squarely with the trustee, Zia Trust.”

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                         FURST, ET AL. v. MAYNE
                           Decision of the Court

¶4              After substantial additional litigation, in May 2022, the court
set a five-day evidentiary hearing to start on September 12, 2022. On June
16, 2022, Zia petitioned the court to approve a settlement agreement with
Robert, seeking an accelerated hearing on the petition. Noting Robert
sought $433,000 in reimbursement and estimating the Trust’s potential
liability at more than $190,000 before the expenses involved in the five-day
hearing, the proposed settlement agreement would pay Robert $200,000 in
exchange for the release of claims against the trust, Zia and others and
resolution of three separate cases. Zia asserted the settlement was in the
best interest of the trust: “Given the long and contentious history of these
proceedings, the mounting costs of the Litigation, and the uncertain nature
of all litigation in general, Zia believes this Settlement represents a fair and
reasonable outcome and should be approved by the Court.”

¶5            Within a week, the court issued an order “setting an
accelerated hearing on Zia’s petition to approve settlement agreement for July
18, 2022.” The court also issued a minute entry granting the motion for
accelerated hearing and “setting an initial virtual hearing” for July 18, 2022,
“(allotted time: 1 hour), in accordance with the formal written order.”

¶6           On July 1, 2022, Linda moved to continue the July 18, 2022
hearing. Linda’s motion acknowledged receipt of Zia’s petition and the
proposed settlement agreement, identifying concerns about specific
settlement agreement terms. Noting she would “be in Europe on a long-
scheduled vacation” on July 18, 2022, and that she “must be represented by
counsel to advise me regarding the Settlement Agreement,” which she “will
be opposing,” she requested a continuance to allow her “30 days to obtain
counsel.”

¶7              The court granted Linda’s motion to continue, resetting “the
initial hearing on the Petition to Approve Settlement Agreement” to
“August 16, 2022 at 1:30 p.m. (1 hour).” That same order required Linda “to
file any objection” to the petition “in writing no later than August 5, 2022.”
Linda’s August 5, 2022 objection argued the settlement was unreasonable
and not in the trust’s best interests. In a filing that, with attachments, had
more than 100 pages, Linda argued in some detail that Robert owed the
trust money; he should not be paid the proposed amount; his expenses were
smaller than claimed; Robert would not prevail in the litigation (including
that “the case is almost completely ready for trial”); Zia was trying to avoid
liability for claims Robert filed against it and payment under the proposed
settlement would consume much of what was left in the trust. Linda’s
objection concluded by asking the court to “deny Zia’s petition to approve
the Settlement Agreement.”

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                         FURST, ET AL. v. MAYNE
                           Decision of the Court

¶8            After taking appearances at the August 16, 2022 hearing, the
court started by explaining: “we were originally set for an initial hearing on
a petition to approve, which was continued until today because we knew
there was a -- likely a forthcoming objection.” Noting Linda’s August 5,
2022 objection, the court asked how the parties wanted to proceed. Counsel
for Zia responded that he was prepared to offer testimony from a former
Zia employee; “I’m also prepared to make an offer of proof . . . the
evidentiary part of any hearing would be very brief.” Noting Linda’s
objection to the petition, the court asked if she was “prepared to argue or
present on your objection today?” Linda responded: “I’m sorry. I’m not a
lawyer, and I didn’t realize that I should have been prepared. . . . But you
tell me, what -- what do I need to do, if you can help me out.” The court
responded:

              well, you did do a very thorough job in your
              filing. So you can also rest on your pleading.
              You know, you have a written objection there,
              and I can hear testimony. I don’t know if you --
              if you were planning to present any testimony
              to support your objection, I could set on another
              day for an evidentiary hearing. But if you want
              to rest on the arguments in your [objection], I
              can consider the testimony presented by --
              through [Zia’s counsel] and make a ruling that
              way.

Linda responded that her “preference would be to have an evidentiary
hearing, because I would need more time to prepare. I did as much as I
could. I don’t think I did as thorough of a job as I could have done. . . . So I
would appreciate an evidentiary hearing.” Zia’s counsel expressed concern,
given a five-day trial in less than a month before a different judge,
concluding that “our position is the briefing’s closed. We have our motion,
we have [Linda’s] objection, and we’re ready to go forward.” After Linda
then responded, noting the settlement agreement “leaves me wide open to
Robert filing something against me and Zia Trust,” the court noted Linda
had “put together a very clear statement, you know, outlining your
position,” adding the court would “go ahead and allow” Zia’s counsel “to
call his brief witness today,” and that Linda “will also have the right to ask
any questions of his witnesses that you may wish.” Linda did not object to
that proposed course, instead responding, “Okay. Thank you.”

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                        FURST, ET AL. v. MAYNE
                          Decision of the Court

¶9             Zia’s witness then testified that this settlement would allow
the trust to avoid the cost and risk of trial, adding that even if the trust
prevailed at trial, Robert would likely appeal. The witness added that, at a
mediation in 2021, Zia had made a settlement offer to Robert significantly
higher than the $200,000 settlement agreement amount. After direct
examination, the court asked Linda if she had “questions for this witness?”
Linda responded, “Yes, I do.” Without objecting to proceeding, Linda then
cross-examined the witness about claims Zia had made for reimbursement
for litigation costs against Robert, the status of pending litigation, and
whether the settlement was in the best interest of the trust and its
beneficiaries. Toward the end of Linda’s cross-examination of Zia’s witness,
Linda noted she had “a short list of unfinished business that I believe the
trust needs to address, but we can address that later on.” The court
responded “those are things that you [Linda] should cover” when she
testified.

¶10             After redirect, Linda was sworn and testified. The court asked
her to testify “in a narrative fashion what you want to testify to,” and Linda
then did so, including testifying about the extensive litigation the trust was
involved in and her belief that the settlement agreement improperly
depleted the trust’s funds. Zia’s counsel elected to respond to Linda’s
testimony in closing argument, not cross-examination. The court then asked
if Linda was comfortable going to closing arguments rather than cross-
examination, and she agreed, noting she wanted to “just hear what [Zia’s
counsel] has to say, and then I might have a comment or two?” with the
court responding “Well, yes. And then you can make a closing argument,
certainly.” Robert testified, and when the court asked Linda whether she
would prefer to cross-examine him or address issues in closing arguments,
“for the sake of time and not really knowing how to cross examine him,”
Linda elected to defer to closing arguments. The court then “move[d] to
closing arguments,” first hearing from Zia and, without objection, Linda
providing a closing argument. As the hearing ended, the court told the
participants, “I’m going to take this under advisement,” adding that it
would “issue a ruling shortly,” given the upcoming trial. Linda did not
object to proceeding in that fashion. The evidentiary hearing started at 1:54
p.m., and including testimony and argument, ended at 3:30 p.m.

¶11            About ten days after the hearing, Linda filed a “Request for
Evidentiary Hearing; Notice of Intention to File a Supplement” to her
August 5, 2022 objections. In the filing, Linda stated she “requested an
Evidentiary Hearing” at the August 16, 2022 evidentiary hearing “and
understood” the court “to offer the opportunity for an Evidentiary Hearing
if requested. Linda hereby renews her request for an Evidentiary Hearing.”

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                        FURST, ET AL. v. MAYNE
                          Decision of the Court

Linda again argued that settlement was a “total capitulation” and not
warranted, adding “[a] hearing is required to address these and other
important issues to be considered in determining the reasonableness, or
lack thereof, of Zia’s proposed settlement.” Zia promptly moved to strike,
noting Linda’s request “is untimely, unauthorized, and cumulative, and it
represents an impermissible surreply or unauthorized supplemental brief
to a matter that is now under advisement.” Zia noted Linda had “already
received additional time to brief and argue this matter, and the Request
raises issues that were in fact already briefed and argued.” Zia added that
the court “heard oral argument and testimony at the August 16, 2022
hearing and took the matter under advisement. No further briefing or
evidence has been requested, and no legal authority for providing it has
been given.”

¶12           Two days later, without ruling on Linda’s request, the court
approved the settlement agreement and issued a final judgment reflecting
that ruling. This court has jurisdiction over Linda’s timely appeal under
Article 6, Section 9, of the Arizona Constitution and Arizona Revised
Statutes (A.R.S.) §§ 12- 120.21(A)(1) and -2101(A)(1) (2023).1

                               DISCUSSION

¶13          Linda argues “[b]y turning the initial hearing and status
conference into an evidentiary hearing without notice, the superior court”
denied her due process rights. Due process challenges are reviewed de
novo. Backstrand v. Backstrand, 250 Ariz. 339, 346 ¶ 28 (App. 2020). “[D]ue
process requires that litigants be heard ‘at a meaningful time and in a
meaningful manner.’” Id. at 346 ¶ 29 (citation omitted). Due process must
be balanced against the superior court’s discretion to control its docket. Id.

¶14            Citing Volk v. Brame, 235 Ariz. 462 (App. 2014), Linda argues
that by receiving evidence at the August 16, 2022 hearing, the court
“deprived [her] of a meaningful opportunity to present her evidence and
test the veracity of Zia’s claims.” Volk, however, addressed the due process
requirement that a court “afford the parties an opportunity to present
sworn oral testimony.” 235 Ariz. at 463 ¶ 1. Linda was afforded that right,
by cross-examining Zia’s witness, testifying herself and being allowed to
cross-examine Robert. She also presented closing argument. Moreover, she
does not, and could not, claim the duration of the hearing violated her due
process rights. Cf. Volk, 235 Ariz. at 465 ¶¶ 4, 9 (finding due process

1 Absent material revisions after the relevant dates, statutes and rules cited

refer to the current version unless otherwise indicated.

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                        FURST, ET AL. v. MAYNE
                          Decision of the Court

violation when 15 minute hearing did not allow time for sworn oral
testimony).

¶15             Nor did Linda object to how the hearing proceeded. She did
not object to the court receiving testimony, did not object to Zia’s witness
or Robert testifying and did not object to any specific questions asked. She
also testified without objection and provided closing argument without
objection. Nor did she object to the court taking the petition to approve the
settlement under advisement at the end of the hearing. Thus, this case is
unlike Volk, where the appellant objected to the form of the hearing
throughout. Id. at 469 ¶22 n.6. Instead, given she did not promptly object or
otherwise seek relief from the superior court for the arguments she seeks to
press on appeal, she has waived those arguments. See Odom v. Farmers Ins.
Co. of Ariz., 216 Ariz. 530, 535 ¶ 18 (App. 2007) (“[A]rguments raised for the
first time on appeal are untimely and deemed waived.”).

¶16           Linda also argues, citing Carlson v. Ariz. State Pers. Bd., 214
Ariz. 426 (App. 2007), that she was not given an adequate opportunity to
prepare because she did not have notice the court would hear evidence at
the August 16, 2022 hearing. Carlson addresses what due process requires
before a public employee is “finally deprived of his constitutionally
protected property interest in his continued employment.” Id. at 431 ¶ 17.
That issue is not presented here. Moreover, even if Carlson applied, Linda
had notice of the settlement agreement and the arguments supporting its
approval. Linda was granted a 30-day continuance to obtain counsel and
adequately prepare. Id. at 433 ¶ 22. She had notice of Zia’s arguments for
the settlement agreement well before the hearing and, without objection,
provided contrary testimony and argument at the hearing. Carlson does not
show her due process rights were violated.

¶17            Finally, Linda argues the court deprived her of an
opportunity to develop her case that Zia failed to adhere to its fiduciary
duties. But, as explained above, without objection, she cross-examined Zia’s
witness, testified and presented argument at the August 16, 2022 hearing.
Nor does the record support Linda’s assertion that she was deprived of the
opportunity to press this argument in superior court. Her pre-hearing
written objection argued the settlement was an “abdication of [Zia’s]
fiduciary responsibility.” At the hearing, Linda questioned Zia’s witness
about the potential harm the settlement may cause her as a beneficiary and
the California litigation she argued causes a conflict of interest. Linda has
shown no error in the court’s order approving the settlement.

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                       FURST, ET AL. v. MAYNE
                         Decision of the Court

¶18         Zia requests an award of its attorneys’ fees incurred in this
appeal under A.R.S. § 14-11004(A), (B). In the court’s discretion, Zia is
awarded a portion of its reasonable attorneys’ fees and costs, contingent
upon compliance with ARCAP 21.

                            CONCLUSION

¶19          The judgment is affirmed.

                        AMY M. WOOD • Clerk of the Court
                        FILED: AA

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