Roth v. Jelley
45 Cal.App.5th 655
| Cal. Ct. App. | 2020Background
- Testator McKie W. Roth Sr. (d. 1988) created the First Yvonne Roth (FYR) testamentary trust: income to surviving wife Yvonne for life, with a testamentary power of appointment; default remainder (if Yvonne did not appoint) to McKie Jr., Diane, Joanne, and James, with per stirpes substitution to their issue.
- The testator’s children (McKie Jr., Diane, Joanne) later sued/claimed against the estate and in 1990 entered a court‑approved Settlement Agreement that included a clause disclaiming “all other interest” in the FYR Trust by the claimants.
- In 1991 the probate court entered a Final Distribution (the “1991 Decree”) that, relying on the Settlement, changed the FYR default remainder to James (or his issue), effectively eliminating the grandchildren’s contingent remainder interests; Mark (grandson) received no mailed notice of the proceedings or decree.
- Yvonne died in 2016 without exercising the testamentary power; Mark petitioned in 2017 to be recognized as a beneficiary under the MWR Will default provision and to set aside the 1991 Decree to the extent it affected his interest.
- The probate court held Mark had only a mere expectancy and no cognizable property interest, so the 1991 Decree bound him; the Court of Appeal reversed, holding Mark had a contingent property interest, was entitled to mailed notice, and the 1991 Decree is void for lack of due process; matter remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Mark had a constitutionally protected property interest in the FYR trust remainder in 1991 | Mark: contingent remainder under testator’s will was a property interest (not mere expectancy); thus due process required mailed notice and chance to object | Jelley/James: Mark had no vested property right (only an expectancy) or his interest was too remote; alternatively, McKie Jr.’s settlement/disclaimer eliminated Mark’s share | Held: Mark had a cognizable contingent future property interest created at testator’s death and not destroyed by the settlement; he was entitled to notice |
| Whether the 1991 Decree could lawfully eliminate Mark’s contingent interest without personal notice | Mark: decree adversely affected his property interest and was entered without mailed notice — violating Mullane/Mennonite due process requirements | Respondents: statutory/procedural notice complied; Mullane exceptions (remoteness/burden) apply; decree is final and not subject to collateral attack | Held: The 1991 Decree adversely affected Mark’s interest; because his name/address were reasonably ascertainable, mailed notice was required; lack of notice renders the decree void |
| Whether the Settlement Agreement or disclaimers by McKie Sr.’s children bound Mark | Mark: settlement was contractual and cannot alter testamentary dispositions as to nonparties; disclaimers did not and could not divest his testamentary remainder | Respondents: the settlement intended to and effectively removed the children’s interests, so Mark takes nothing | Held: Settlement did not modify the MWR Will or bind nonparty grandchildren; it could not vest or eliminate contingent remainders that had not occurred |
Key Cases Cited
- Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306 (1950) (due process requires notice reasonably calculated to apprise interested parties of proceedings affecting property)
- Mennonite Bd. of Missions v. Adams, 462 U.S. 791 (1983) (mail notice required where name and address are reasonably ascertainable)
- Tulsa Prof’l Collection Servs., Inc. v. Pope, 485 U.S. 478 (1988) (known creditors in probate require actual notice for due‑process purposes)
- Estate of Reed, 259 Cal.App.2d 14 (1968) (probate orders affecting beneficiaries are void if known beneficiaries are not given adequate notice)
- Estate of Lacy, 54 Cal.App.3d 172 (1975) (statutory labeling of proceedings as in rem does not satisfy due process notice requirements)
- Estate of Sigourney, 93 Cal.App.4th 593 (2001) (organization with testamentary power was entitled to notice before executor sought to alter will/trust terms)
- Ammco Ornamental Iron, Inc. v. Wing, 26 Cal.App.4th 409 (1994) (persons designated as takers in default hold property interests even if subject to divestment)
- In re Marriage of Brown, 15 Cal.3d 838 (1976) (contingent future interests are property)
- Estate of Lefranc, 38 Cal.2d 289 (1952) (remaindermen’s future interests arise at testator’s death)