Diaz v. Bukey (2011) 195 Cal.App.4th 315

Sometimes I wonder why cases ever get as far as they do in the appeal process considering the ever increasing cost and expense of litigation. This is one of those cases. In the case of Diaz v. Bukey, the California Court of Appeal ruled that the beneficiary of a trust could not be compelled to arbitrate disputes arising under the trust in the absence of the beneficiary’s agreement to do so. In general, only parties to an agreement containing an arbitration clause may be required to arbitrate their disputes. Although arbitration is a favored method of solving disputes, the policy favoring arbitration does not eliminate the need for an agreement to arbitrate and does not extend to persons who are not parties to an agreement to arbitrate. Here, the arbitration clause was found in the trust instrument, and the beneficiary did not wish to arbitrate her dispute with the trustee concerning the internal affairs of the trust. In the absence of all of the beneficiaries and interested parties agreeing to resolve their dispute in arbitration rather than in probate court, there was no basis for an order compelling arbitration. Modern trust litigation in the probate court system is generally more expedient than ordinary civil litigation, there is no general right to a jury trial, and the probate court has trained research staff experienced in this interesting but specialized field of law. The appellate opinion is silent on the issue, but it makes me wonder what really may have motivated the trustee to expend such time, effort and money to seek to compel arbitration of this dispute.

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