Opinion
H043263
01-18-2018
Estate of IMAD DAOU, Deceased. JOHN I. KESSLER, as Special Administrator, etc., Petitioner and Respondent, v. AUDI DAOU et al., Objectors and Appellants. CARMEN HAMADY et al., Claimants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Clara County Super. Ct. No. 111PR169299)
I. INTRODUCTION
Appellants Audi Daou, Majid Daou, and May Daou appeal from a probate court order approving an $8.5 million settlement between, on the one hand, respondent John I. Kessler, the special administrator of the estate of their brother Imad "Ed" Daou, and on the other hand, respondents Carmen Hamady and Christina Daou, the wife and daughter of Ed Daou. The settlement resolved Carmen and Christina's civil action against Kessler, as special administrator of the estate of Ed (the alleged tortfeasor), for (1) wrongful death of Carmen and Ed's son, (2) domestic violence on Carmen, and (3) assault and battery on Christina.
For clarity and convenience, we will refer to members of the Daou or Hamady family by their first names after initially using their full names. We observe that Carmen is variously identified in the record with a last name of Hamady and Hamady-Daou, and her daughter is variously identified in the record with a first name of "Christine" and "Christina."
On appeal, we understand the siblings Audi, Majid, and May to contend that substantial evidence does not support the probate court's factual findings concerning the settlement, and that the court therefore abused its discretion in determining that the settlement was made in good faith and was in the best interest of the estate.
For reasons that we will explain, we will affirm the order.
II. FACTUAL AND PROCEDURAL BACKGROUND
A. The Death of Ed and Andrew
Carmen and Ed married in 1981, and had two children, Andrew and Christina. Carmen and Ed executed a revocable trust in 2006.
On July 6, 2011, Carmen filed for dissolution of marriage.
Two weeks later, Ed executed a written revocation of the trust. Ed also allegedly executed a new will in which his three siblings were named as beneficiaries.
On July 27, 2011, Ed killed Andrew with a gunshot wound to the head and then killed himself.
B. The Appointment of a Special Administrator of Ed's Estate
In September 2011, the probate court appointed Kessler as special administrator of Ed's estate with general powers and full authority to administer the estate under the Independent Administration of Estates Act (Prob. Code, § 10400 et seq.).
All further statutory references are to the Probate Code unless otherwise specified.
C. The Civil Action by Carmen and Christina
In January 2012, Carmen and Christina filed a civil action alleging (1) wrongful death, (2) the tort of domestic violence, and (3) assault and battery against Kessler as the administrator of Ed's estate (Hamady et al. v. Kessler (Super. Ct. Santa Clara County, No. 112CV216279)). In the operative complaint, Carmen alleged in the first cause of action for wrongful death that Ed intentionally shot their 22-year-old son Andrew, and that she suffered the loss of financial benefits, comfort, and society, among other losses. In the second cause of action for the tort of domestic violence, Carmen alleged that in approximately 2006 through 2011, Ed caused her bodily injury and placed her in reasonable apprehension of imminent serious bodily injury to herself and her children. In the third cause of action for assault and battery, Christina alleged that in approximately 2009 through 2011, Ed attempted to commit a violent injury on her and used force and/or violence on her. For the first two causes of action, Carmen sought general damages of $7.5 million and special damages in an amount to be proven at trial. For the third cause of action, Christina sought general damages of $5 million.
Kessler filed an answer in the civil action generally denying the allegations and asserting numerous affirmative defenses.
D. The Creditors' Claims by Carmen and Christina
Based on their allegations regarding Ed in the civil action, Carmen and Christina each filed a creditor's claim in the probate action involving Ed's estate. Carmen's claim was for $76,150,000, and Christina's claim was for $20,750,000.
E. The Litigation and Appeal Regarding Ed and Carmen's Trust
In the meantime, Audi filed a petition in the probate court in 2012, contesting the validity of Ed and Carmen's trust. Audi contended that Ed had validly revoked the trust, that his property in the trust reverted back to him, and that his property should be distributed pursuant to a will dated July 26, 2011, which named his siblings as beneficiaries. Audi further alleged that Ed and Carmen had executed a property ownership agreement in which Carmen acknowledged that all the shares of two business entities (collectively referred to as Civitaf) were Ed's separate property. Carmen and Christina filed a response to Audi's petition and a counter petition against Audi and Kessler, contending that Ed's trust revocation was not valid, that the property ownership agreement was void, and that Civitaf was community property.
After an evidentiary hearing, the probate court determined that Ed's revocation of the trust was not valid. In a separate order, the court further determined that the property ownership agreement between Carmen and Ed was void. In the latter order, the court referred to evidence relating to Ed's physical and emotional abuse of Carmen. The court determined that after Carmen had objected to signing the agreement, Ed exercised control over her through non-verbal, threatening conduct, and that Carmen feared she would be beaten by Ed if she did not sign the agreement. In addition, Christina had testified about the lack of free will at their house, and an accountant testified about being intimidated by Ed. The court concluded that the property ownership agreement was the product of undue influence by Ed, and that it was done to obtain an unfair advantage over Carmen.
The siblings appealed. In 2014, this court: (1) reversed the probate court's order and determined that Ed's revocation of the trust was valid, and (2) affirmed the probate court's order determining that Ed and Carmen's property ownership agreement was void due to undue influence by Ed. (Daou v. Hamady et al. (Nov. 17, 2014, H038994) [nonpub. opn.].)
F. The Settlement of Carmen and Christina's Civil Action
In August 2015, Kessler, the special administrator of Ed's estate, reached a settlement with Carmen for $8 million and with Christina for $500,000 regarding their civil action and their creditors' claims.
G. The Petition to Approve the Settlement
In October 2015, Kessler filed a verified petition in the probate court to approve the settlement. In support of the petition, Kessler submitted copies of the settlement agreement; medical records regarding Andrew; the autopsy report regarding Andrew; portions of Carmen and Christina's mediation brief setting forth their claims of domestic violence, assault, and battery by Ed, along with their damages calculations; and a declaration from the attorney defending Kessler in Carmen and Christina's civil action, setting forth a valuation of the civil action.
In the petition, Kessler stated the following. Shortly before Ed's death, Ed revoked the trust he had executed with Carmen, and he executed a new will that purportedly revoked a prior pour-over will and provided for his siblings to inherit his estate. At the time of his death, Ed had been operating Civitaf. After Ed's death, a dispute arose between his siblings and Carmen regarding his estate. Kessler was appointed as receiver for Civitaf and special administrator of Ed's estate.
Kessler stated that Carmen and Christina's civil action was scheduled for trial in October 2015. Prior to trial, in late August 2015, the parties attended a mediation with a retired judge. Although Ed's siblings were not parties to the civil action, the siblings and their attorney were present at the mediation. All parties attempted to reach a global settlement of all matters involving Ed's estate, the trust, and the civil action, but they were unsuccessful. The mediation continued as to the civil action only, and Kessler, Carmen, and Christina ultimately reached a settlement. The settlement was conditioned upon probate court approval.
Kessler described the discovery he undertook in Carmen and Christina's civil action. He subpoenaed the sheriff's report of Andrew's shooting, the coroner's reports for Andrew's and Ed's deaths, and the medical records of Andrew. Kessler also apparently obtained a copy of Ed and Carmen's "family law file." Based on this discovery, Kessler learned the following.
Andrew was diagnosed with Hodgkin's lymphoma in 2008, when he was 19 years old. He underwent treatment, including chemotherapy, and was declared cancer free in 2009. In January 2010, he was diagnosed with a reoccurrence of the disease. He underwent treatment, including stem cell treatment, and was diagnosed as being cancer free in January 2011, and again in March 2011. Andrew was scheduled to have another evaluation in September 2011. The report of his autopsy, which was conducted on July 28, 2011, noted that there were no signs of cancer.
Kessler further learned that Carmen filed for divorce on July 6, 2011, and moved out of the family house. Christina moved out with Carmen, but Andrew stayed in the family home with Ed. Carmen obtained a restraining order against Ed based on allegations that he had abused her and Christina and had threatened to kill Andrew. According to the sheriff's and coroner's reports, Ed shot Andrew and then committed suicide.
Kessler observed that Ed's siblings had asserted that Andrew's death was a "mercy killing." According to Kessler, the siblings contended that Andrew had only a year or less to live, and that Ed was so distraught over the pain Andrew had experienced undergoing cancer treatments that he killed Andrew to save him from the pain and agony of dying from cancer. Ed then committed suicide.
Kessler believed the facts contradicted the siblings' claims. Andrew had been cancer free for at least six months prior to his death. An oncology/hematology expert, who was retained by Kessler's defense attorney in the civil action and who reviewed Andrew's medical records, believed Andrew had a 50 to 60 percent "chance of cure" with the stem cell transplant he had received, that Andrew's life expectancy if the cancer reoccurred was approximately five years, and that with no reoccurrence of cancer he had a normal life expectancy.
Kessler observed that Carmen had claimed that Ed killed Andrew out of vengeance and to inflict pain on her for divorcing him. Kessler indicated that, regardless of whether that theory was valid, Ed did engage in actions prior to his death that Kessler "preferred not be presented to a jury," and Ed "made statements prior to Andrew's death from which it could be inferred that Andrew's death was premeditated."
Kessler stated that, in view of the evidence that Ed shot Andrew before killing himself, the main issue on the wrongful death claim was damages, not liability. Kessler stated that there were "no parameters limiting what a jury can award in valuing the loss by a mother of her only son. Given the circumstances of Andrew's death, a very real possibility existed that the jury would view Ed's actions in killing Andrew as being inexcusable and the potential for a very large jury verdict existed."
Kessler explained that Carmen and Christina submitted a mediation brief outlining their claims for spousal abuse and assault and battery, as well as the basis for their damages claims in the action, which the mediation brief indicated was more than $51 million.
Kessler stated that, pursuant to the settlement, Carmen's creditor's claim against the estate would be accepted and valued at $8 million, and Christina's credit's claim against the estate would be accepted and valued at $500,000. Kessler argued that the settlement was in the best interest of the estate for the following reasons.
Kessler indicated that it was difficult to value a wrongful death case and to determine the amount of noneconomic damages. The value of each case depended on the facts. Kessler found the facts of this case "difficult" to defend. It was undisputed that Ed murdered his son. There was also evidence from which Carmen and Christina would argue that Ed planned to murder his daughter Christina. For example, Ed invited Christina to dinner and to stay over the house the night of the murder. Further, there was evidence that Ed changed his will in the days before the murder to remove Carmen as a beneficiary, which was not unusual given the divorce proceedings, but he also removed his children as beneficiaries.
Kessler also stated that Ed had filed false tax returns within a week prior to the murder/suicide, that he forged Carmen's signature on the tax returns, and that he grossly inflated his and Carmen's income, thereby creating a multi-million dollar federal and state tax liability. Kessler stated that Ed also filed false income tax returns for Civitaf by grossly inflating the income earned by Civitaf, which resulted in tax liabilities of hundreds of thousands of dollars, arguably in an attempt to bankrupt Civitaf.
Kessler stated that third party witnesses would provide testimony that Ed was controlling, manipulative, and intimidating. Kessler also referred to evidence that had been presented in the probate proceeding involving Ed and Carmen's trust, including that Ed had physically abused Carmen. Kessler further stated that Carmen and Christina had set forth in their mediation brief the alleged instances of spousal and child abuse. The abuse against Carmen allegedly included dragging her by the hair, hitting her, shoving her head in a toilet, shoving a shoe in her mouth, throwing her in the pool fully clothed, kicking her while she was suffering from herniated disks and screaming, "Bitch, I'm going to paralyze you," calling her other names such as "stupid whore," and engaging in other verbal abuse. Kessler stated that, given Ed's death, Kessler would not be able to present witnesses at trial to contradict Carmen's and Christina's testimony.
Kessler explained that, based on the allegations of abuse, Carmen and Christina would argue that Ed's killing of Andrew was a final act of abuse in response to Carmen filing for divorce. Ed attempted to take everything away from her, including money and the children. Kessler observed that evidence of the falsified tax returns, Ed's temper, the abuse, and the changing of his will to cut out his children were consistent with this theory.
Based on the evidence and Carmen's and Christina's arguments, Kessler and his attorneys expected a jury verdict in the civil action to exceed $10 million. Kessler and his attorneys had researched reported jury verdicts and settlements in wrongful death cases involving murders. They referred to two California cases in particular. In 2001, an appellate court upheld an $8.5 million verdict to parents whose son was murdered (Rufo v. Simpson (2001) 86 Cal.App.4th 573, 613-616 (Rufo)). Kessler stated that if the award was adjusted for inflation, the award would be approximately $11.5 million in 2015. In an Alameda County case from 2012, a jury awarded two children $25 million each for their father killing their mother.
Kessler analyzed the estate's assets and liabilities, other than the civil action. Kessler determined that the net value of the total estate was approximately $6.78 million, which included 54 properties in Lebanon that were appraised at $3.09 million at the time of Ed's death.
Kessler acknowledged that the $8.5 million settlement of the creditors' claims and the civil action exceeded the net value of the estate. Kessler believed that the settlement was still in the best interest of the estate because it was "extremely likely that a jury verdict will exceed the $8.5 million settlement."
Kessler's defense attorney in the civil action stated in a declaration that $8.5 million was a "reasonable settlement in this case." He explained as follows: "In general, it is difficult to place a numerical value on wrongful death cases because no fixed standard exists for determining the amount of noneconomic damages and because each case is unique and fact specific. This is particularly true with respect to placing a monetary value on a mother's claim for the death of her young son who was intentionally killed by his father. Given the facts of the case, I could envision a jury verdict far exceed[ing] $10 million, which I believe would be in the bottom range of potential verdicts in this case. Although Andrew had a 40-50% chance of his cancer reoccurring, [the medical expert] opined that Andrew still would have had a life expectancy of approximately five years in the event there was a reoccurrence. Given the facts of the case, I do not believe a jury would have reduced the wrongful death damages in favor of the Estate of Imad Daou below the settlement amount had it considered the probability of a reoccurrence and I believe it would have been foolish to take that risk given the reasonableness of the $8.5 million settlement."
H. The Siblings' Objection
The siblings filed a written objection to Kessler's petition to approve the settlement. Siblings Audi and May also filed declarations, along with a declaration from their attorney and a copy of Ed's answer to Carmen's request for a domestic violence restraining order.
In their objection, the siblings questioned Kessler's defense against Carmen and Christina's civil action and Kessler's assessment of the value of the civil action. The siblings argued that Kessler only reviewed records and conducted standard written discovery, and that there was very little discovery regarding damages. The siblings wanted the opportunity to defend against the civil action.
Regarding potential damages on Carmen's wrongful death cause of action, the siblings contended that, with respect to the statement by Kessler's medical expert that Andrew had a 50 to 60 percent chance of a "cure" with the stem cell therapy, "cure" was defined as survival for more than five years. The siblings acknowledged that if Andrew survived beyond five years in remission, it was possible for him to live a normal life, but they contended, based on a declaration from their attorney, that a normal life was still "unlikely given the radiation and chemical exposure he underwent" for prior treatment.
The siblings argued that Carmen and Andrew's relationship was "strained by his illnesses." In a declaration, Audi indicated that during Andrew's treatment for Hodgkin's lymphoma the first time, Ed told her that Carmen complained about having difficulty supporting Andrew and that Carmen was particularly concerned that she could not keep up with her gym schedule. May, in a declaration, described statements that Carmen made in late 2010, after Andrew suffered a relapse of Hodgkin's lymphoma and underwent stem cell treatment. According to May, Carmen "complained that Andrew'[s] care took a lot of her time" although Andrew was doing better at the time. Carmen also discussed the fact that there was a 50 percent chance Andrew would get cancer again. She "complained that Andrew's care had affected her gym schedule and she was unable to continue with her normal exercise routine." Carmen also indicated that she would no longer support Andrew if he suffered a third round of cancer, stating that she needed to live her own life and would not spend more time " 'in and out of the hospital.' "
The siblings contended that Andrew was close to Ed. Audi stated in her declaration that "Andrew chose to stay with his father, Ed, and not move in with his mother," and that "[b]y all accounts, Andrew and Ed were very close." According to Audi, Ed attended all therapy sessions during Andrew's first diagnosis of Hodgkin's lymphoma. When Andrew suffered a relapse, Ed expressed that his worst fear had come true. He also told Audi that he would not wish his worst enemy to suffer the pain of watching his only son undergo invasive stem cell treatment.
According to Audi's declaration, Ed stated before his death that Andrew was experiencing swollen lymph nodes, tiredness, itchiness, and a slight loss of appetite. Ed expressed concern that Andrew might suffer another relapse of cancer. Ed also stated that Andrew was adamant that he would not go through such invasive care a third time. Ed further stated that Carmen told him that she wanted to live her own life, and was no longer interested in devoting any more time to Andrew if his illness returned. Ed reported that he could not bear to see his son go through a third round of cancer.
The siblings contended that there was no evidence to support Carmen's and Christina's claims of abuse by Ed. According to the siblings, there were no photos, medical records, or police reports documenting any such abuse.
The siblings also observed that Ed denied abusing Carmen and Christina in his answer to Carmen's request for a domestic violence restraining order. In the answer, which Ed apparently signed the day before shooting Andrew, Ed stated that he never abused Carmen physically or mentally, and that he never abused their children. Ed stated that Carmen's allegations of physical abuse were fabricated. Ed stated that Christina missed him and wanted to see him, and that Carmen included Christina in the domestic violence temporary restraining order without Christina's knowledge or consent. Ed attached to his answer copies of texts purportedly from Christina on July 8 and 12, 2011, stating that she was thinking of him and loved him. Ed also stated in the answer, "I have never threatened to kill my family," and "I would never hurt my family." Ed further stated that his mother and sister had died of cancer. Ed stated that when Andrew was diagnosed with a cancer a second time, that was the worst day of Ed's life. Ed admitted stating that he would rather kill himself than see his son suffer. He stated, however, that he was trying to cope with extreme grief, that he did not mean those words, and that he never should have said them.
The siblings argued that if Christina was afraid of Ed, she would not have sent the text messages stating that she loved and missed him after she moved out. The siblings' attorney stated in a declaration that Christina indicated to law enforcement during the investigation of Andrew's death that Ed never hit her. The siblings' attorney also stated that he had witnesses who could testify that Ed was a peaceful, nonviolent person.
The siblings contended that Carmen's sister had a "prominent role in any marital discord." According to Audi's declaration, Ed stated that Carmen let him know that Carmen's sister had been urging a divorce. Ed denied to Audi any allegations of abuse and contended that the allegations were "cooked up" by Carmen's sister to get an advantage in the divorce proceedings. The siblings' attorney stated in a declaration that he was "prepared to present evidence from several witnesses that [Carmen's sister] was instrumental in both instigation of the divorce proceedings and in the fabrication of abuse allegation."
The siblings contended that shortly before Ed's death, he told Audi that he was trying to make things right. In her declaration, Audi stated that Ed said he was going to pay back a loan from his father, he was going to pay his taxes, and he was going to return all that he had received from the Daous. Ed asked for Audi's assistance, and she agreed.
The siblings' attorney stated in a declaration that there were two mediations in which all the parties tried to reach a global settlement. During the second mediation, a discussion was had with accountants regarding tax strategy and a settlement. Most of the second mediation was spent in settlement negotiations between the siblings and Carmen. According to the siblings' attorney, within 20 minutes of the termination of global settlement discussions, a settlement was reached by Kessler, who accepted a single demand by Carmen and Christina.
The siblings' attorney stated that he had "been involved in a number of high profile wrongful death actions as well as those without notoriety involving allegations of murder or murder-suicide." The attorney stated that the large awards in the two wrongful death cases cited by Kessler were "outliers." Further, the Alameda County case was distinguishable because it involved the death of a mother, not a child, and there were significant economic damages in that case. The attorney stated that the "vast majority" of wrongful death cases where liability was admitted resulted in jury verdicts from the hundreds of thousands of dollars into the millions. The attorney stated that it was "relatively rare for a California jury to award seven figures in an admitted wrongful death case."
The siblings contended that the settlement, which exceeded the value of the estate, did not provide a benefit to the estate, other than saving the cost of trial. The siblings' attorney stated in a declaration that a defense in the civil action would normally range from $100,000 to $150,000, but that Kessler's defense attorney had been billing efficiently and could likely defend the case for less than $50,000 to $75,000. The attorney contended that there was "very little" to be gained by the settlement but "so much more" to be gained by trial. The attorney stated that he had "been empowered with the funds and the backing of [his] clients, including Audi Daou, . . . to defend the [civil] action through trial."
The siblings also argued that the Lebanese property was outside the probate court's jurisdiction. They contended that approval of a settlement for more than the value of the California estate's "actual assets puts at risk the Lebanese property." The siblings indicated that Carmen and Christina had lodged claims in Lebanon against Ed's estate. The siblings stated that if the Lebanese courts did not give full faith and credit to the settlement of Carmen's and Christina's creditors' claims in California, a wrongful death trial could take place in Lebanon and "it would make sense . . . to try the case in order to avoid conflicting rulings."
I. Kessler's Reply
In a verified reply brief, Kessler contended that the siblings made numerous assertions that were unsubstantiated or inadmissible. Kessler stated that he was unaware of any medical expert who had opined that Andrew was unlikely to survive beyond five years in remission due to his radiation and chemical exposure from prior therapy.
Kessler also argued that the siblings provided no evidence, other than their own self-serving declarations, that Carmen's relationship with Andrew was strained, or that Carmen was no longer interested in devoting any more time to his illness. Kessler stated that the medical records reflected that Carmen and Ed each attended all but one of Andrew's treatment sessions. Kessler also stated that Andrew kept a journal, and that Andrew did not say anything negative in the journal about his relationship with Carmen.
Contrary to the sibling's contention that he had no intent to defend against the civil action, Kessler stated that he "was more than willing to take the case to trial." Regarding discovery, Kessler stated that he had subpoenaed all of Andrew's medical records, the sheriff's records, and the coroner's report. He also hired medical experts and subpoenaed them for trial. The attorneys for Kessler, Carmen, and Christina agreed to defer depositions until after the mediation to determine whether the case could be settled without the expense of depositions. The civil action was ultimately settled because Kessler believed the settlement amount was less than the likely outcome at trial.
Kessler "acknowledge[d] the lack of documentary and photographic evidence" regarding Carmen's and Christina's abuse claims, and he "stressed these points in formulating his defense of the [civil] action." Kessler explained, however, that Carmen and Christina "provided evidence that, if believed by the jury, would have been devastating to the defense of the [civil] case." According to Kessler, the "abuse outlined by Carmen and [Christina] were so repugnant and upsetting (and believable) that [Kessler] was concerned that a jury might let its distaste for [Ed's] alleged conduct affect the amount of damages it awarded on the wrongful death claim." Kessler also stated that "[a]mple" evidence existed to support Carmen's and Christina's testimony.
Kessler further contended that there was evidence contradicting the siblings' unsupported assertion that Ed was a very peaceful man and never violent. Kessler pointed out that Ed owned a gun and used it to kill his son. Kessler also pointed to the evidence in the trust case, in which Ed's accountant testified that Ed was controlling and Ed's attorney testified that Ed was an "asshole."
Kessler disputed the siblings' contention that the assets in Lebanon were beyond his control, or that the properties had been awarded to the siblings by the Lebanese courts. Kessler stated that a recent Lebanese court ruling had overturned prior rulings in the siblings' favor. Kessler provided a copy of the ruling along with an English translation. According to Kessler, under the recent ruling, the inheritance of Ed's assets in Lebanon were to be decided under American law by the probate court in California in the pending litigation between the parties. Kessler stated that the California probate court's "pending order . . . is that [Kessler] does control all of [Ed's] assets in Lebanon and that those assets are part of this Estate. Which beneficiaries inherit [Ed's] assets is still being litigated between the parties in the will contest and other collateral proceedings. As a result, the net valuation of the Estate set forth in the Petition ($6,780,369) is correct."
Kessler believed that his evaluation of the civil action and the range of potential jury verdicts was "more objective" than the siblings' evaluation. He contended that the settlement of the civil action and the creditors' claims by Carmen and Christina was in the best interest of the estate.
Kessler and Carmen each filed written evidentiary objections to the declarations by Audi, May, and the sibling's attorney.
The probate court did not expressly rule on the evidentiary objections, and none of the parties in this court address the substance or merit of the objections. --------
J. The Hearing
At the hearing on the petition on November 5, 2015, the siblings contended that the settlement (1) did not confer any benefit to the estate, and (2) the value of Carmen's and Christina's claims were significantly less than the amount of the settlement. The siblings indicated that they were willing to pay to defend the civil action and that their attorney had handled a similar case and obtained good results.
The siblings also addressed the issue of the Lebanese assets. The siblings contended that the English translation of the Lebanese court ruling that Kessler provided was not entirely accurate. The siblings also argued that a Lebanese court had since "accepted [Ed's] will conditionally," and that the probate court in California consequently lacked jurisdiction over the Lebanese property.
The siblings contended that if the settlement was less than the value of the estate in California, which was approximately $3.5 million, then the settlement would be beneficial to the estate. However, because the settlement exceeded the value of the assets in California, the "settlement would then potentially be available for use in Lebanon against the assets that remain there, which are to be determined by" the court in Lebanon. The siblings contended that they would "essentially get nothing and [Carmen and Christina] get everything."
Kessler contended that the settlement benefited the estate. He argued that the estate was "rapidly becoming" a situation where the attorneys and other professionals "wind up with everything and the creditors and beneficiaries get nothing." Kessler stated that the "burn rate" for fees and other amounts being paid out of the estate was more than $20,000 a month. He also indicated that some loans were coming due that had to be paid, there were potential tax liabilities, and that income-producing assets might need to be sold. Kessler stated, "Once income slows down, then how do you start paying the expenses? It gets into a death spiral. So this thing has to end. It has to end soon."
Kessler argued that the civil action had "extraordinarily egregious" facts with the potential for a large jury verdict, and that it was "unrealistic" to claim that the civil action was worth $3.5 million. He stated that he did not believe a jury verdict would be less than $10 million. Kessler argued that the settlement was a reasonable number, and it allowed for the payment of legitimate creditors and an end to the "burn rate."
Kessler acknowledged that there was disagreement over who controlled the Lebanese assets. Nevertheless, regarding the siblings' objection that Carmen and Christina would be able to go to Lebanon to collect out of those assets, Kessler contended that the issue was irrelevant to whether the settlement of the creditors' claims by Carmen and Christina was reasonable. Kessler stated, "[I]f that's what the decedent's debts are, that's where his assets are, that's the way it goes. [¶] . . . If he has assets anywhere in the world, a judgment creditor or creditor would be able to attach those depending on that country's laws." Kessler indicated that if the court approved the settlement, he intended to eventually file a petition for distribution, distribute everything, and end the probate court action in California, leaving the siblings, Carmen, and Christina to litigate in Lebanon.
K. The Probate Court's Order
On November 9, 2015, the probate court filed a written order approving Kessler's settlement with Carmen and Christina. The court determined that Kessler's settlement of the creditors' claims by Carmen and Christina was made in good faith and was in the best interest of the estate. In reaching this determination, the court made the following findings: (1) Kessler "conducted appropriate due diligence and evaluated carefully the risks and benefits of the settlement;" (2) there was a "significant chance" that the outcome of a trial in the civil action would be a judgment against the estate in excess of $8.5 million based on the parties' description of the civil action, applicable law, and the trial outcomes in the county; (3) the settlement would save the estate a "significant" amount of money from which it would benefit, because the settlement would expedite the administration of the estate and thus reduce the fees of professionals, and the estate would avoid paying attorney's fees to defend against the civil action; and (4) although the settlement exceeded the estate assets in the United States, the estate may benefit from the settlement because there may be additional estate assets in Lebanon.
III. DISCUSSION
We understand the siblings to contend that substantial evidence does not support the probate court's factual findings, and therefore the court abused its discretion in determining that the settlement was made in good faith and was in the best interest of the estate.
Kessler raises several procedural objections to the siblings' opening brief, including that they make assertions that are not supported by a citation to the record, and that they forfeited their substantial evidence claim by failing to discuss all the relevant evidence. Regarding the substance of the siblings' contentions on appeal, Kessler argues that the probate court's factual findings are supported by substantial evidence, and that the siblings fail to show that the court abused its discretion by approving the settlement. Carmen and Christina join in the arguments made by Kessler.
A. General Legal Principles
An administrator of an estate may petition the probate court for an order approving a settlement. (§§ 9830, subds. (a) & (b), 10500, subd. (b), 10552, subd. (b); see §§ 8545, subd. (a), 10405.) The administrator must show an advantage to the estate resulting from the settlement. (Estate of Lucas (1943) 23 Cal.2d 454, 465; §§ 9830, subd. (a), 9837, subd. (b).)
In determining whether a settlement is advantageous, the probate court must consider the best interest of the estate under the facts presented. (Estate of Lucas, supra, 23 Cal.2d at p. 467.) Relevant considerations include whether the claim has merit, and the amount of attorney's fees that would be incurred if the claim was litigated. (Id. at pp. 466, 467.) If the claim "cannot be conclusively determined without litigation," a settlement may be advantageous to the estate. (Id. at p. 466.) The administrator of the estate has the right to act as a prudent business person. (Ibid.) "[B]y ordinary business principles, a compromise or settlement may be much more advantageous than costly litigation over a doubtful issue of fact or question of law. And in the settlement of estates, a prompt distribution of the assets to those entitled to them should be a primary consideration." (Id. at p. 467, italics added.)
A party may object to the settlement on the ground of bad faith or fraud. (Estate of Lucas, supra, 23 Cal.2d at pp. 465, 466.) Bad faith may exist when the claim being settled is "wholly without foundation and known by the [administrator] to be so." (Id. at p. 465.)
A probate court's approval of a settlement is reviewed for abuse of discretion. (Estate of Green (1956) 145 Cal.App.2d 25, 28.) When applying this standard of review, the court's "findings of fact are reviewed for substantial evidence, . . . and its application of the law to the facts is reversible only if arbitrary and capricious." (Haraguchi v. Superior Court (2008) 43 Cal.4th 706, 711-712, fns. omitted; accord Estate of Green, supra, at p. 28.) "In probate cases, as in other cases, a reviewing court must resolve all conflicts in the evidence in favor of the judgment or order under appeal." (Estate of Wilson (1953) 116 Cal.App.2d 523, 531.) "[A] reviewing court will only interfere with a trial court's exercise of discretion where it finds that under all the evidence, viewed most favorably in support of the trial court's action, no judge could have reasonably reached the challenged result. [Citation.]" (Conservatorship of Scharles (1991) 233 Cal.App.3d 1334, 1340.) "The burden is on the complaining party to establish abuse of discretion. [Citations.] The showing on appeal is insufficient if it presents a state of facts which simply affords an opportunity for a difference of opinion. [Citations.]" (In re Marriage of Rosevear (1998) 65 Cal.App.4th 673, 682.)
Where the sufficiency of the evidence is challenged on appeal, "the reviewing court must start with the presumption that the record contains evidence sufficient to support the judgment; it is the appellant's burden to demonstrate otherwise." (Baxter Healthcare Corp. v. Denton (2004) 120 Cal.App.4th 333, 368.) The appellant is therefore required to provide a summary of all the evidence, not merely his or her own evidence, with citations to the record. (Cal. Rules of Court, rule 8.204(a)(1)(C); Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881; Sterling v. Sterling (2015) 242 Cal.App.4th 185, 194-195 (Sterling).) If a party fails to provide supporting citations to the record, or fails to fairly state all the evidence, the party's contention that the findings are not supported by substantial evidence may be deemed forfeited. (Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1246; Sterling, supra, at pp. 194-195.)
B. Analysis
The probate court made four findings in determining that the settlement was in good faith and in the best interest of the estate. The siblings contend that there is not substantial evidence to support the findings. We will consider each of the court's findings and the supporting evidence in turn.
1. Due diligence and careful evaluation of the settlement
First, the probate court found that Kessler "conducted appropriate due diligence and evaluated carefully the risks and benefits of the settlement."
We understand the siblings to contend on appeal that Kessler conducted little to no investigation of Carmen's and Christina's claims. The siblings argue that Kessler failed to depose the "third party and key witnesses, Carmen and [Christina], in regard to damages." According to the siblings, it was only upon their "insistence" that an expert oncologist was retained, and that witnesses relating to Carmen's relationship with Andrew and evidence concerning the "false accusations of abuse were even noted by [Kessler]." The siblings further contend that the settlement exceeded the assets of the estate, there was "almost no risk" to defend against the civil action, and they were willing to finance the defense.
We are not persuaded by the siblings' argument that Kessler failed to engage in an appropriate investigation of the claims or failed to carefully evaluate the settlement.
Kessler retained legal counsel to defend against Carmen and Christina's civil action. Kessler undertook discovery in the civil action and subpoenaed various records, including the sheriff's report of Andrew's shooting, the coroner's reports for Andrew's and Ed's deaths, and the medical records of Andrew. Kessler also retained an oncology/hematology expert. The oncology/hematology expert provided an opinion concerning Andrew's medical condition and life expectancy. Kessler also obtained a file regarding Carmen and Ed's family law proceeding, which apparently included Carmen's allegations of abuse and her request for a domestic violence restraining order. Kessler was also aware of evidence from the probate court proceeding involving Ed and Carmen's trust, in which there was testimony from Carmen and others about Ed being controlling, an "asshole," and/or physically abusing Carmen. Based on all the information obtained, Kessler's defense attorney in the civil action provided Kessler with an assessment of the value of the civil action and the risk of proceeding to trial. Specifically, Kessler's defense attorney determined that a $10 million verdict was "in the bottom range of potential verdicts" in the civil action, and that an $8.5 million settlement was reasonable.
The record reflects that Kessler was aware of the nature of Carmen's wrongful death and domestic violence claims, the nature of Christina's assault and battery claim, and the strengths and weaknesses of the defense of those claims. The siblings do not persuasively articulate why further discovery, such as the depositions of Carmen and Christina, or unidentified "third party" witnesses, was necessary for Kessler to make a proper determination about whether the settlement was in the best interest of the estate. In view of the information Kessler obtained through discovery and other sources, including other legal proceedings involving the family, as well as the medical and legal opinions obtained by Kessler in defense of the civil action, substantial evidence supports the probate court's finding that Kessler engaged in an appropriate investigation of the claims and carefully evaluated the settlement.
2. Significant chance of a verdict in excess of $8.5 million
Second, the probate court found that there was a significant chance that a trial in the civil action would result in a judgment against the estate for more than $8.5 million, based on the parties' description of the civil action, applicable law, and the trial outcomes in the county.
On appeal the siblings contend that there is not substantial evidence to support the court's findings. They argue that Kessler considered the civil action "in the best light" to Carmen and Christina, and that the witnesses and documentary evidence the siblings provided to Kessler refuted "most of the post death allegations presented by" Carmen and Christina. The siblings contend that the Alameda County Superior Court and Court of Appeal cases that Kessler relied on to show the potential liability in Carmen and Christina's civil action are factually distinguishable and "are simply outliers" regarding the amount of damages awarded. The siblings suggest that the value of Carmen's loss for the wrongful death claim is much less due to her "strained relationship" with Andrew and his limited life expectancy. The siblings argue that the veracity of Carmen and Christina would be a focus at trial, and that a jury would not award "the upper end of a potential verdict" where their veracity was "questionable." The siblings contend that the settlement "must be attributed to the tax advantages conferred by [Kessler] to Carmen and [Christina]," was not in good faith, and was "more the product of preferential treatment" by Kessler.
We are not persuaded by the siblings' contention that the probate court's finding of a significant chance of a verdict in excess of $8.5 million was not supported by substantial evidence.
Carmen alleged a cause of action for wrongful death. A wrongful death claim may be brought "for the death of a person caused by the wrongful act or neglect of another." (Code Civ. Proc., § 377.60.) The damages available in a wrongful death action are those that, "under all the circumstances of the case, may be just." (Id., § 377.61.) "As a general matter, damages for wrongful death ' "are measured by the financial benefits the [plaintiffs] were receiving at the time of death, those reasonably to be expected in the future, and the monetary equivalent of loss of comfort, society and protection." ' [Citation.]" (Corder v. Corder (2007) 41 Cal.4th 644, 661.) "The pecuniary value of the society, comfort, and protection that is lost through the wrongful death of a spouse, parent, or child may be considerable . . . ." (Ibid.) The "factors relevant in assessing a claimed loss of society, comfort, and protection may include the closeness of the family unit at issue, the warmth of feeling between the family members, and the character of the deceased as ' "kind and attentive" ' or ' "kind and loving." ' [Citation.]" (Id. at p. 662.) "[H]owever, recovery is not available in wrongful death actions for the grief or sorrow attendant upon the death of a loved one. [Citation.]" (Ibid.) "[T]he amount which may compensate the loss of comfort and society is peculiarly within the discretion of the jury." (Rufo, supra, 86 Cal.App.4th at p. 615.) A personal injury plaintiff may be awarded a greater amount in trial than he or she requested in the complaint. (Damele v. Mack Trucks, Inc. (1990) 219 Cal.App.3d 29, 38-40.)
Regarding Carmen's wrongful death claim, Kessler stated that it was undisputed that Ed murdered Andrew. Although the siblings contend that Ed believed he was saving Andrew from an agonizing death from cancer, Kessler had medical records, a coroner's report, and an expert opinion indicting that Andrew was cancer free in the months preceding his death, that there was no evidence the cancer had returned by the time of his death, that he had a 50 to 60 percent "chance of cure" with the treatment he had received, that he had a normal life expectancy if the cancer did not reoccur, and that he still had a life expectancy of approximately five years if it did reoccur. Moreover, although the siblings claimed that Carmen made statements indicating she had a strained relationship with Andrew, Kessler observed that Andrew never mentioned the issue in a journal he kept and Carmen attended all but one of Andrew's medical treatment sessions. (See Benwell v. Dean (1967) 249 Cal.App.2d 345, 349 [evidence of the nature of the personal relationship between the decedent and the plaintiff in wrongful death action is relevant to the compensation for loss of society, comfort and protection].)
Carmen also alleged a cause of action for the tort of domestic violence, and Christina alleged a cause of action for assault and battery. Spouses and former spouses may sue each other for the tort of domestic violence. (Civ. Code, § 1708.6; Pugliese v. Superior Court (2007) 146 Cal.App.4th 1444, 1448.) Domestic violence is "[t]he infliction of injury upon the [spouse or former spouse] resulting from abuse." (Civ. Code, § 1708.6, subd. (a)(1).) " 'Abuse' means intentionally or recklessly causing or attempting to cause bodily injury, or placing another person in reasonable apprehension of imminent serious bodily injury to himself or herself, or another." (Pen. Code, § 13700, subd. (a); Civ. Code, § 1708.6, subd. (a)(1).)
" 'Generally speaking, an assault is a demonstration of an unlawful intent by one person to inflict immediate injury on the person of another then present.' [Citation.] A civil action for assault is based upon an invasion of the right of a person to live without being put in fear of personal harm." (Lowry v. Standard Oil Co. (1944) 63 Cal.App.2d 1, 6-7.) "The tort of assault is complete when the anticipation of harm occurs." (Kiseskey v. Carpenters' Trust For So. California (1983) 144 Cal.App.3d 222, 232.) "A battery is any intentional, unlawful and harmful contact by one person with the person of another. [Citations.] . . . A contact is 'unlawful' if it is unconsented to. [Citation.]" (Ashcraft v. King (1991) 228 Cal.App.3d 604, 611.)
General and special damages may be recovered for the torts of domestic violence, assault, and battery. (Civ. Code, § 1708.6, subd. (b) [damages for domestic violence]; Deevy v. Tassi (1942) 21 Cal.2d 109, 120 [damages for assault and battery]; McChristian v. Popkin (1946) 75 Cal.App.2d 249, 262-263 [damages for assault and battery]; Licudine v. Cedars-Sinai Medical Center (2016) 3 Cal.App.5th 881, 891 (Licudine) [compensatory damages include general and special damages].) "General damages include damages for ' "pain [and] suffering, emotional distress, and other forms of detriment that are sometimes characterized as 'subjective' or not directly quantifiable." [Citation.]' [Citations.] By contrast, special damages . . . are . . . the 'out-of-pocket losses' . . . ." ' [Citation.]" (Licudine, supra, at p. 892.) In the case of torts such as assault and battery, "mental suffering will frequently constitute the principal element of damages." (State Rubbish Collectors etc. Assn. v. Siliznoff (1952) 38 Cal.2d 330, 338.)
Regarding Carmen's cause of action for domestic violence and Christina's cause of action for assault and battery, Kessler stated that the specific instances of spousal abuse and "essentially child abuse" claimed by Carmen and Christina were "unnerving," "repugnant," and "upsetting." Although he acknowledged the lack of documentary and photograph evidence, Kessler found the claims "believable," and he would not be able to contradict Carmen's and Christina's claims with live testimony from Ed. Carmen and Christina planned to argue that Ed attempted to take everything away from Carmen, including her money and her children, because she was divorcing him. They intended to argue that Ed's killing of Andrew was the final act of abuse by someone who was seeking revenge for Carmen divorcing him. As Kessler observed, the evidence of the falsified tax returns, Ed's temper, his abuse, and the changing of his will to cut out his children were consistent with this theory. Carmen and Christina also intended to argue that Ed planned to kill Christina, based on his invitation for her to stay over the night that he killed Andrew. Kessler observed that the siblings' assertion that Ed was a peaceful and nonviolent person was contradicted by the evidence that Ed used a gun to kill his own son, as well as evidence from Ed's financial and legal advisors regarding their interactions with him. Kessler found the facts of Carmen and Christina's civil action "difficult . . . to defend" against.
The siblings contend that they provided Kessler with evidence refuting most of Carmen's and Christina's allegations, but that Kessler considered the facts presented by Carmen and Christina in the light most favorable to them. As the siblings recognize, a jury would have to determine whether Carmen and Christina were credible regarding the allegations of abuse, as well as determine the damages on all claims. "It is apparent that in respect to [the civil action], there were issues which could not be settled without litigation. That fact in itself furnished a substantial basis for [Kessler] entering into a compromise and the court approving the compromise." (Estate of Wilson, supra, 116 Cal.App.2d at p. 529.)
Although the siblings presented a few comments by Carmen and Christina that could cast doubt on their claims, Kessler found Carmen and Christina believable, and he identified evidence that was independent of their own allegations of abuse and loss that was consistent with their claims. Kessler's defense attorney for the civil action and the siblings' attorney provided competing assessments regarding the potential verdicts and the likelihood of a verdict greater than the settlement amount. (See Rufo, supra, 86 Cal.App.4th at pp. 613-616 [affirming jury award of $8.5 million for the wrongful death of an adult son who was living independently away from his parents].) Given the potentially large verdict, according to Kessler's defense attorney, if the jury ultimately found Carmen and Christina credible, and given the compelling facts supporting Carmen's and Christina's claims as set forth by Kessler, substantial evidence supports the probate court's finding that there was a significant chance of a verdict in excess of $8.5 million.
3. Benefit to the estate by saving money
Third, the probate court determined that the settlement would benefit the estate because it would save the estate a significant amount of money. The court explained that the settlement would expedite the administration of the estate and thus reduce the fees of professionals involved in the administration. The estate would also avoid paying attorney's fees to defend against the civil action.
On appeal, the siblings contend that the trial in the civil action was originally scheduled for October 21, 2015, and that ultimately a hearing on the petition for approval of the settlement was held on November 5, 2015. The siblings argue that under these circumstances, the settlement would not reduce the professionals' fees relating to the administration of the estate because "both the settlement and trial would have been concluded at or about the same time." The siblings also argue that the defense of the civil action would have cost as little as $50,000, that a "credible" defense normally ranges from $100,000 to $150,000, and that in any event sibling Audi Daou offered to provide a defense in the civil action.
We are not persuaded by the siblings' argument concerning the lack of substantial evidence of the settlement providing significant savings to the estate. By the time the probate court heard the petition to approve the settlement on November 5, 2015, and filed its order granting the petition on November 9, 2015, the October trial date in the civil action had already been vacated and a trial setting conference was scheduled for November 17, 2015. Thus, if the probate court had denied the petition to approve the settlement, the trial of the civil action would not have taken place until sometime after November 17, 2015. Further, Kessler had agreed to delay the depositions of Carmen and Christina in the civil action pending the outcome of the mediation. Given that the trial date in the civil action had been vacated and additional discovery needed to take place before trial, the trial in the civil action would not have concluded "at or about the same time" as the settlement as contended by the siblings. Rather, the trial in the civil action would been set for some date after the hearing on the petition to approve the settlement. In the meantime, the estate would have continued to incur fees for professionals in connection with the administration of the estate. In addition, the estate would incur a significant amount of attorney's fees in defending against Carmen and Christina's civil action through at least trial.
Regarding the siblings' offer to fund or otherwise provide a defense to Kessler in the civil action through trial, the siblings do not provide any legal authority to suggest that Kessler was obligated to accept this offer instead of entering into the settlement. In Estate of Wilson, the appellate court determined that there was substantial evidence to support the finding that a settlement was to the advantage of the estate. (Estate of Wilson, supra, 116 Cal.App.2d at pp. 524-525, 528.) The beneficiary under the will had argued that the settlement did not provide any advantage to the estate, where she had offered to pay for, and furnish, legal counsel for the litigation of various matters in dispute without financial cost to the estate. (Id. at pp. 524-525, 530.) The court rejected this argument, explaining: "Such a claim overlooks the fact that the various properties in the estate are in the custody of the law during administration and that the law vests in the executor and the probate court duties and powers commensurate with their responsibility properly to administer the estate. Accordingly, there are necessarily involved various factors over and above the personal convenience and wishes of the ultimate beneficiary. One of these factors is the element of time, not merely of cost, in settling an estate. And the law looks with favor upon the settlement of litigation. [Citation.] It is neither for the residuary legatee nor for a reviewing court to undertake to substitute the judgment of either for that of the executor and the probate court in such matters when, as here, there is a substantial basis in the record for the decision which they have made." (Id. at p. 530.) Similarly, in this case, substantial evidence supports the probate court's finding that the settlement would save the estate a significant amount of money "because the settlement will expedite the administration of the Estate" and thus reduce the fees of professionals, including attorneys.
4. Benefit to the estate to the extent assets are in Lebanon
Fourth, the probate court determined that, although the settlement exceeded the estate assets in the United States, the estate may benefit from the settlement because there may be additional estate assets in Lebanon. On appeal, the siblings contend that Kessler advised the probate court that he had not been, and would not be, marshalling any Lebanese assets.
Substantial evidence supports the probate court's finding that the settlement may benefit the estate to the extent there are additional estate assets in Lebanon. The siblings acknowledge that Carmen and Christina "have lodged what would be akin to creditor's claims in Lebanon against the estate there." In view of the significant chance of a jury verdict in excess of $8.5 million, which exceeds the estate assets in the United States, and in view of Carmen's and Christina's efforts to make "creditor's claims" in Lebanon, substantial evidence supports the court's finding that the estate may benefit from the settlement to the extent there are additional estate assets in Lebanon.
Accordingly, we determine that substantial evidence supports the probate court's factual findings, and that the siblings fail to establish that the court abused its discretion in approving Kessler's settlement of the civil action and creditors' claims of Carmen and Christina.
IV. DISPOSITION
The November 9, 2015 order is affirmed.
/s/_________
BAMATTRE-MANOUKIAN, J. WE CONCUR: /s/_________
ELIA, ACTING P.J. /s/_________
MIHARA, J.