Filed 9/8/26 Winter v. Parker, Milliken, Clark, etc. CA2/7 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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
SECOND APPELLATE DISTRICT
DIVISION SEVEN
JEFFREY WINTER, as Trustee, B342960 etc., et al., (Los Angeles County
Plaintiffs and Respondents, Super. Ct. No. 24STCP00403)
v.
PARKER, MILLIKEN, CLARK, B342961 O’HARA & SAMUELIAN, APC, (Los Angeles County et al., Super. Ct. No. 24STCV03284)
Defendants and Appellants.
APPEALS from orders of the Superior Court of Los Angeles County, Barbara M. Scheper, Judge. Reversed and remanded with directions.
Halpern May Ybarra Gelberg, Joseph J. Ybarra, Kevin H.
Scott and Yogini Patel for Defendant and Appellant Parker, Milliken, Clark, O’Hara & Samuelian, a Professional Corporation.
Greenberg Gross and Alan A. Greenberg for Defendant and Appellant Buchalter, a Professional Corporation.
Joshua R. Furman Law, Joshua R. Furman; and Donald L.
Saltzman for Plaintiffs and Respondents.
__________________________
Jeffrey Winter and Franklin Henry Menlo (Menlo Trustees), in their capacities as co-trustees of the Franklin Henry Menlo Irrevocable Trust established March 1, 1983 (Franklin Menlo Trust), filed an action for legal malpractice, fraudulent concealment, and other claims (malpractice action) against two law firms retained by the former trustee (Leslie Klein): Parker, Milliken, Clark, O’Hara & Samuelian, a Professional Corporation (Parker Milliken) and Buchalter, a Professional Corporation (collectively, the Law Firms). In a related action, the Menlo Trustees filed a verified petition pursuant to Civil Code section 1714.10 (conspiracy petition) seeking leave to file a civil conspiracy claim against the Law Firms. Both actions were based on allegations that the Law Firms conspired with Klein, who was the former trustee of the Franklin Menlo Trust and 27 Menlo family trusts, to misappropriate more than $20 million from the trusts.
The Law Firms appeal from the trial court’s orders denying their motions to compel arbitration of the conspiracy petition (case No. B342960) and the malpractice action (case No. B342961). They contend the court erred in finding the Menlo Trustees, as successor trustees, were not bound by the mandatory arbitration provision in Parker Milliken’s engagement agreement because Klein signed the agreement in his personal capacity, and not in his fiduciary capacity as trustee. The Law Firms also contend the court abused its discretion in denying arbitration of
3
the claims against Buchalter pursuant to Code of Civil Procedure section 1281.2, subdivision (c),1 after the court found those claims, although covered by an enforceable arbitration agreement, arose from the same transactions as the nonarbitrable claims against Parker Milliken, and there was a likelihood of conflicting rulings if the Buchalter claims were compelled to arbitration.
We conclude Klein engaged Parker Milliken and Buchalter in his fiduciary capacity as a trustee (potentially in addition to his personal capacity), and therefore the arbitration agreements are binding on the Menlo Trustees. We reverse both orders and direct the trial court on remand to grant the motions to compel arbitration.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Menlo Family Trusts and Probate Court Action2 Between 1983 and the early 2000’s, Sam and Vera Menlo established at least 96 irrevocable trusts for the benefit of their five children, 36 grandchildren, and other family members. Their son Franklin is the sole beneficiary of the Franklin Menlo Trust, an irrevocable trust established in 1983. The family trusts were funded by cash, securities, and life insurance policies worth tens of millions of dollars.
1 Further undesignated statutory references are to the Code of Civil Procedure. 2 Our factual recitation is based on the allegations in the conspiracy petition and its attachments.
4
Between 1996 and 2002, Klein, an estate planning attorney and certified public accountant, served as the sole trustee of at least two dozen Menlo family members’ trusts, including the Franklin Menlo Trust. After Klein failed for over a decade to provide accountings for the trusts, on September 12, 2012 Franklin filed a verified petition in the probate court seeking Klein’s removal as trustee of the Franklin Menlo Trust and for an accounting and surcharge. Twenty-three other Menlo family members filed analogous petitions with respect to their trusts, and the probate court ordered the 24 petitions consolidated with the lead case captioned In re Franklin Henry Menlo Irrevocable Trust Established March 1, 1983, Los Angeles County Super. Ct. case No. BP136769 (probate court action).
B. The Law Firms’ Engagement Agreements In 2012 Klein separately engaged Parker Milliken and Buchalter to represent him in connection with the probate court action.
1. The Parker Milliken agreement Parker Milliken’s engagement agreement was set forth in a letter dated October 5, 2012 addressed to “Leslie Klein, Esq.” Klein signed and dated his acceptance of the agreement on October 11 above the printed words, “Leslie Klein, Trustee.” (Block capitalization omitted.)
The engagement agreement stated, “[W]e appreciate your choice of Parker, Milliken to represent you in connection with the contested proceedings concerning the Menlo trusts, of which you are the trustee (the ‘Matter’). For the purposes of this letter, you will be referred to as the ‘Client’ or ‘Leslie Klein.’” Under the
5
heading “Scope of Representation,” the letter stated the firm “will be representing only you as the Client and will not be representing any person related or unrelated to Client nor any parent, subsidiary or other affiliated entity nor any shareholder, partner, director, officer, employee or agent of Client. . . .” (Underlining omitted.) A fee payment provision stated in part that “[o]ur statements will be sent to you and it will be your responsibility to allocate our fees among the various Menlo trusts of which you are a trustee.”
The Parker Milliken agreement included an arbitration provision stating in relevant part that “any . . . dispute between or among you and us or any of our attorneys and agents, including but not limited to claims of malpractice, errors or omissions, breach of this agreement, or any other claim of any kind regardless of the facts or the legal theories, shall be finally settled by mandatory binding arbitration in Los Angeles, California, conducted in accordance with California Code of Civil Procedure §§ 1282 et seq., including, but not limited to, section 1283.05, with each party to bear its own costs and attorneys’ fees and disbursements.” The arbitration provision included a mutual acknowledgment and waiver that Klein signed above the printed words, “Leslie Klein, Client.”3
3 In 2022 Klein entered two additional engagement agreements with Parker Milliken relating to trusts that were not initially part of the probate court action. In the trial court and on appeal, the parties have focused their arguments on the 2012 agreement, which we conclude requires arbitration of the Menlo Trustees’ claims. We therefore do not address the 2022 agreements.
6
2. The Buchalter agreement Buchalter’s operative engagement agreement is dated September 20, 2016 and superseded an earlier engagement agreement dated October 2, 2012. The agreement defined the term “You” to mean “Leslie Klein” and stated, “You are hiring [Buchalter] to represent You in your individual capacity and as Trustee in connection with the Menlo Litigation,” which was defined to mean “the 24 pending petitions” consolidated in the probate court action. (Capitalization omitted.) Klein signed the agreement under the printed words, “Leslie Klein, individually and as Trustee.”
The Buchalter agreement included an arbitration provision stating in part, “You agree that, if any dispute arises out of or relating in any way to this Agreement, our relationship, or the services performed (including but not limited to disputes regarding attorneys’ fees or costs and claims of negligence, breach of contract or fiduciary duty, fraud or any claim based upon a tort or statute), such dispute shall be resolved by submission to binding arbitration in Los Angeles County, California, before a retired judge or justice with ADR Services, Inc. pursuant to [its] rules in effect at the time of any such dispute.”
C. Klein’s Suspension and Removal as Trustee In connection with the probate court action, between 2013 and 2018 the Law Firms were involved in preparing accountings for at least three time periods for each of the subject trusts, as well as supplemental and amended accounts and other reports relating to the trusts’ administration. The Law Firms were named on the captions of the documents filed in court, and their attorneys signed the accounts and reports.
7
In September 2021 the probate court appointed retired judge Glen M. Reiser as a referee to conduct three separate trials concerning asserted discrepancies in three accounts prepared by the Law Firms, as well as other contested issues in the probate court action. Parker Milliken represented Klein at these trials, which took place over 22 days between December 15, 2021 and March 30, 2022.
On August 29, 2022 the referee issued an 84-page report and recommendation, including statements of decision for each of the trials. The referee found Klein embezzled tens of millions of dollars from the Menlo family trusts over decades “through an elaborate scheme to pay himself by co-mingling assets; crossborrowing among 24 [t]rusts; taking loans against trust assets and cross-paying debts—filtered with stunning frequency through Klein’s personal and business accounts. . . .” In particular, “‘Klein embezzled what has been accurately calculated to be $19,225,065 in [t]rust assets for which he has no response,’” although Klein’s commingling of accounts was so pervasive that it “‘render[ed] the scope and breadth of Klein’s misappropriations incalculable and untraceable.’” Klein also refused to provide accountings for the trusts “even after a decade of litigation,” borrowed millions of dollars against trust assets, used the trusts as overdraft protection for his personal credit cards, filtered transactions through his own attorney-client trust account, and “torpedoed $20,000,000 in valuable trust life insurance policies” by failing to maintain them and instead diverting trust assets for non-trust purposes. In the course of the probate court action, “Klein submitted 72 incomplete and misleading accountings to the Court intending to mask his many years and millions of dollars of fiduciary misappropriation.” The referee recommended
8
that Klein be surcharged approximately $30 million for his misconduct, including a principal surcharge of about $19 million, plus $11 million in damages under Probate Code section 859, based on bad faith concealment.
In September 2022 the probate court suspended Klein as trustee of the subject trusts and other Menlo family trusts and appointed the Menlo Trustees as interim co-trustees. In May 2023 the court adopted the referee’s report and recommendations and issued a final statement of decision. On October 10, 2023 the court formally removed Klein as trustee and appointed the Menlo Trustees as successor co-trustees.
D. The Menlo Trustees’ Malpractice Complaint and Conspiracy Petition On February 7, 2024 the Menlo Trustees, in their capacity as co-trustees of the Franklin Menlo Trust, filed a civil action against the Law Firms asserting causes of action for legal malpractice, breach of fiduciary duty, negligence, and fraudulent concealment. (Los Angeles County Super. Ct. case No. 24STCV03284.) The allegations of the complaint pertained to 28 Menlo family members’ trusts, including those involved in the 24 petitions consolidated in the probate court action.
The complaint alleged “Buchalter was hired by and began working for Klein in his capacity as the [t]rusts’ sole trustee starting around March 2012 [and] Parker Milliken was hired by and began working for Klein in his capacity as the [t]rusts’ trustee starting around October 2012.” Klein retained the Law Firms “to handle matters relating to the trusts, including preparation of an accounting” as his “misconduct began coming to light.” In the course of their representation, the Law Firms
9
learned of Klein’s misappropriation and waste of trust funds; they aided his schemes; and they helped him conceal his breaches of fiduciary duty. Among other things, they were “involved in (or, at the very least, aware of) efforts to mask the millions of dollars Klein misappropriated from the [t]rusts by presenting incomplete, misleading, or fabricated accountings.” They also knew in advance that Klein planned to let valuable life insurance policies lapse because of diversions of funds. Moreover, Klein paid the firms’ fees and costs with trust funds, which were used “to assist Klein in masking his thievery.” Even after Klein was suspended and then removed as trustee, the law firms “continued to represent Klein as the suspended trustee in state court actions relating to the [t]rusts,” including making court appearances and filings. The law firms later “dragged their feet in providing [trust] records in an apparent [effort to] conceal their involvement in Klein’s misdeeds.”
On the same day they filed the malpractice complaint, the Menlo Trustees filed a verified petition in a separate action pursuant to Civil Code section 1714.104 seeking leave to assert claims against the Law Firms for conspiracy and aiding and abetting Klein’s breaches of fiduciary duty as trustee in connection with the probate court proceedings. (Los Angeles
4 Civil Code section 1714.10, subdivision (a), provides that “[n]o cause of action against an attorney for a civil conspiracy with his or her client arising from any attempt to contest or compromise a claim or dispute, and which is based upon the attorney’s representation of the client” may be included in a complaint unless the court has determined “that the party seeking to file the pleading has established that there is a reasonable probability that the party will prevail in the action.”
10
County Super. Ct. case No. 24STCP00403.) The conspiracy petition attached the malpractice complaint, a proposed conspiracy complaint, the probate court referee’s report, and a supporting affidavit attaching documents the Law Firms prepared in connection with the accountings.
On August 7, 2024 the proceedings on the malpractice complaint and conspiracy petition were ordered related and assigned to Judge Barbara M. Scheper.
E. The Law Firms’ Motions To Compel Arbitration On June 10, 2024, before the two actions were related, the Law Firms filed a joint motion to compel arbitration of the malpractice complaint and to stay the proceedings and a substantially similar joint motion to compel arbitration of the conspiracy petition and to stay proceedings (collectively, motions to compel).
In their motions, the Law Firms argued the Menlo Trustees’ claims should be arbitrated because Klein, in his capacity as trustee of the subject trusts, entered into written arbitration agreements in the Law Firms’ engagement agreements; the arbitration agreements governed all issues in dispute; and the Menlo Trustees filed the actions as successor trustees for the purpose of asserting the trusts’ interests, and thus they succeeded to Klein’s contractual duty to arbitrate.5 The
5 The Law Firms also argued the Menlo Trustees were equitably estopped from refusing to arbitrate because their claims arose from the attorney-client relationship between the Law Firms and Klein and alleged Klein’s breaches in his capacity as trustee in handling trust matters. Because we conclude Klein entered into the engagement agreements in his capacity as
11
Law Firms attached to their motions the 2016 Buchalter agreement and 2012 Parker Milliken agreement.
In their oppositions, the Menlo Trustees argued the Buchalter and Parker Milliken agreements did not identify the Franklin Menlo Trust, and thus Klein was personally bound by the agreements under Probate Code section 18000, subdivision (a).6 Further, the Parker Milliken agreement on its face applied only to the firm’s personal representation of Klein, and not to services the firm provided on behalf of the Franklin Menlo Trust. The Menlo Trustees also argued the equitable doctrine of unclean hands precluded the Law Firms from enforcing their engagement agreements because the agreements were intended to assist Klein in his illegal conduct. The Menlo Trustees did not dispute that Klein signed the engagement agreements, nor did they argue the agreements were unconscionable or their claims fell outside the scope of the arbitration provisions.
In their joint replies, the Law Firms argued with respect to Probate Code section 18000, subdivision (a), that both the Parker Milliken and Buchalter agreements included language making it clear that the Law Firms’ representations applied to Klein’s role in the subject trusts. The Parker Milliken agreement stated
trustee, we do not reach the Law Firms’ equitable estoppel argument. 6 Probate Code section 18000, subdivision (a), states, “Unless otherwise provided in the contract or in this chapter, a trustee is not personally liable on a contract properly entered into in the trustee’s fiduciary capacity in the course of administration of the trust unless the trustee fails to reveal the trustee’s representative capacity or identify the trust in the contract.”
12
Klein retained the firm “to represent [him] in connection with the contested proceedings concerning the Menlo Trusts, of which [he is] trustee,” an unequivocal reference to the probate court action involving the Franklin Menlo Trust. The Buchalter agreement likewise provided that the firm was representing Klein “in your individual capacity and as Trustee in connection with the Menlo Litigation,” which was defined as the 24 probate petitions consolidated in the probate court action. In addition, the signature blocks on both firms’ agreements identified Klein as “Trustee.” Moreover, paragraph 25 of the malpractice complaint alleged the Law Firms represented Klein “in his capacity as the Trusts’ sole trustee.”
F. The Trial Court’s Ruling After a two-day hearing, on November 22, 2024 the trial court denied the motions to compel. In a six-page statement of decision entered in both actions, the court found the Menlo Trustees, as successor trustees to the Franklin Menlo Trust, were bound as a matter of law by any arbitration agreements executed by a predecessor trustee. Because Klein signed the Buchalter agreement “in his individual capacity and in his capacity as a trustee,” that agreement was binding on the Menlo Trustees. The Buchalter agreement also sufficiently identified the Franklin Menlo Trust through its reference to and definition of the “Menlo litigation” to show representative capacity under Probate Code section 18000, subdivision (a). Further, the Menlo Trustees were “suing Buchalter for an alleged breach of fiduciary duty which is covered by the terms of the Buchalter [a]greement.”
However, the trial court found that Klein signed the Parker Milliken agreement in his personal capacity only, relying on the
13
language in the agreement stating Parker Milliken “‘will be representing only you as the Client and will not be representing any person related or unrelated to the Client nor any parent, subsidiary or other affiliated entity.’” The court found “this clause precludes any representation of Klein in his representative capacity as trustee,” even though the agreement “does mention the Menlo trust dispute and that [the] client is a trustee.” Instead, the agreement “purport[ed] to represent Klein personally ‘in connection with the contested proceedings concerning the Menlo trusts, of which you are the trustee,’” and thus, the agreement was not binding on the Menlo Trustees under Probate Code section 18000, subdivision (a).
Having found “a valid arbitration agreement exists between [the Menlo Trustees] and Buchalter, but not between [the Menlo Trustees] and Parker Milliken,” the court exercised its discretion under section 1281.2, subdivision (c), to refuse to compel the claims against Buchalter to arbitration. The court made findings that “[t]he cases against both parties arise out of the same series of related transactions, namely alleged participation in Klein’s schemes,” and “[i]f the [c]ourt were to compel arbitration with respect to Buchalter, there would be risk of conflicting rulings because both parties are heavily involved in [the Menlo Trustees’] case.”
The Law Firms each timely appealed from the trial court’s orders denying the motions to compel in both actions.
14
DISCUSSION
A. Law Governing Motions To Compel Arbitration and Standard of Review Section 1281.2 requires the trial court, with limited exceptions, to order arbitration of a controversy “‘[o]n petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate such controversy . . . if it determines that an agreement to arbitrate the controversy exists.’” (Trinity v. Life Ins. Co. of North America (2022) 78 Cal.App.5th 1111, 1119-1120.) “‘As the language of this section makes plain, the threshold question presented by every petition to compel arbitration is whether an agreement to arbitrate exists.’” (Mar v. Perkins (2024) 102 Cal.App.5th 201, 211; accord, Santana v. Studebaker Health Care Center, LLC (2026) 120 Cal.App.5th 1, 11 (Santana) [“Because arbitration is a contractual right, the threshold question in every motion or petition to compel arbitration is whether an agreement to arbitrate exists.”]; see Coinbase, Inc. v. Suski (2024) 602 U.S. 143, 145 [“Arbitration is a matter of contract and consent, and . . . disputes are subject to arbitration if, and only if, the parties actually agreed to arbitrate those disputes.”].)
“‘Generally speaking, one must be a party to an arbitration agreement to be bound by it. “The strong public policy in favor of arbitration does not extend to those who are not parties to an arbitration agreement, and a party cannot be compelled to arbitrate a dispute that he has not agreed to resolve by arbitration.”’” (Monschke v. Timber Ridge Assisted Living, LLC (2016) 244 Cal.App.4th 583, 586-587; accord, Ford Motor
15
Warranty Cases (2025) 17 Cal.5th 1122, 1128 (Ford Motor) [“‘“‘[T]here is no policy compelling persons to accept arbitration of controversies which they have not agreed to arbitrate.’”’”].)
“In California, ‘[g]eneral principles of contract law determine whether the parties have entered a binding agreement to arbitrate.’” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (U.S.), LLC (2012) 55 Cal.4th 223, 236 (Pinnacle); accord, Ford Motor, supra, 17 Cal.5th at p. 1128; see Mondragon v. Sunrun Inc. (2024) 101 Cal.App.5th 592, 602 [“‘“An arbitration agreement is subject to the same rules of construction as any other contract.”’”].) In interpreting an arbitration agreement, “‘[t]he court should attempt to give effect to the parties’ intentions, in light of the usual and ordinary meaning of the contractual language and the circumstances under which the agreement was made.’” (Victoria v. Superior Court (1985) 40 Cal.3d 734, 744; see Santana, supra, 120 Cal.App.5th at p. 13 [“‘“The basic goal of contract interpretation is to give effect to the parties’ mutual intent at the time of contracting.”’”].) “Generally, courts must construe an apparent agreement between the parties to make it ‘lawful, operative, definite, reasonable, and capable of being carried into effect, if it can be done without violating the intention of the parties.’” (Santana, at p. 13, quoting Civ. Code, § 1643.) ““‘A court must view the language in light of the instrument as a whole and not use a ‘disjointed, singleparagraph , strict construction approach.’”’” (Rice v. Downs (2016) 248 Cal.App.4th 175, 186; accord, Arzate v. ACE American Ins. Co. (2025) 108 Cal.App.5th 1191, 1200.)7
7 The Law Firms argue we should construe any ambiguities in the agreements in favor of arbitrability, citing Coast Plaza
16
The party seeking to compel arbitration bears the burden of proving by a preponderance of the evidence an agreement to arbitrate a dispute exists, and the party opposing arbitration bears the burden of proving unconscionability or other defenses. (Pinnacle, supra, 55 Cal.4th at p. 236; see Trinity v. Life Ins. Co. of North America, supra, 78 Cal.App.5th at p. 1120 [“To carry [its] burden of persuasion the moving party must first produce ‘prima facie evidence of a written agreement to arbitrate the controversy.’”].) Where the evidence with respect to the existence of an arbitration agreement is not in conflict, “‘we review the trial court’s denial of arbitration de novo.’” (Ford Motor, supra, 17 Cal.5th at p. 1128; accord, Pinnacle, at p. 6; Mondragon v. Sunrun Inc., supra, 101 Cal.App.5th at p. 602.)
Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 686 (“California has a strong public policy in favor of arbitration and any doubts regarding the arbitrability of a dispute are resolved in favor of arbitration”) and EFund Capital Partners v. Pless (2007) 150 Cal.App.4th 1311, 1321 (“‘[t]his strong public policy has resulted in the general rule that arbitration clauses should be upheld “unless it can be said with assurance that an arbitration clause is not susceptible to an interpretation covering the asserted dispute”’”). However, this rule does not apply to the determination of whether Klein engaged the Law Firms in his fiduciary capacity as trustee because “‘[t]here is no public policy favoring arbitration of disputes that the parties have not agreed to arbitrate.’” (Lopez v. Charles Schwab & Co., Inc. (2004) 118 Cal.App.4th 1224, 1229; see Victoria v. Superior Court (1985) 40 Cal.3d 734, 739 [“‘policy favoring arbitration cannot displace the necessity for a voluntary agreement to arbitrate’”].)
17
B. The Trial Court Erred in Denying the Motions To Compel Arbitration Because the Menlo Trustees Are Bound by the Law Firms’ Engagement Agreements The Law Firms contend the trial court erred in finding Klein engaged Parker Milliken to represent him solely in his personal capacity. They argue it is clear from the language of the agreement and extrinsic evidence that Klein engaged the law firm as then-trustee of the Menlo family trusts involved in the probate court action. We recognize the Parker Milliken agreement is not a paragon of clarity with respect to Klein’s capacity in retaining the firm, especially as compared to the Buchalter agreement that plainly stated Klein was hiring it “to represent You in your individual capacity and as Trustee.” Nonetheless, there is no reasonable construction of the Parker Milliken agreement that supports the court’s finding that Klein engaged Parker Milliken solely in a personal capacity. On the contrary, it is clear from the face of the agreement that Klein engaged Parker Milliken in his fiduciary capacity as trustee, regardless of whether he also retained the firm to represent him personally.
1. Governing law on rights and duties of trustees and successor trustees
As the trial court recognized, “[a] successor trustee is bound by a valid arbitration agreement executed by a predecessor.” (Thomas v. Westlake (2012) 204 Cal.App.4th 605, 613, fn. 5; see id. at pp. 609, 613 [in action for fraud and breach of fiduciary duty against financial advisors, successor trustee was bound by arbitration provisions in account agreements signed by his late mother in her capacity as trustee of the family trust].) This rule
18
flows from the axiom that “[t]he powers of a trustee are not personal to any particular trustee but, rather, are inherent in the office of trustee. It has been the law in California for over a century that a new trustee ‘succeed[s] to all the rights, duties, and responsibilities of his predecessors.’” (Moeller v. Superior Court (1997) 16 Cal.4th 1124, 1131 (Moeller); accord, Thomas, at p. 613, fn. 5; see Borissoff v. Taylor & Faust (2004) 33 Cal.4th 523, 527, 530 [“[w]hile privity of contract may not exist, the successor [fiduciary] has the same powers and duties as the predecessor,” and therefore the successor fiduciary of a probate estate had the power to bring a malpractice action against the lawyers hired by the previous estate administrator to provide legal services on behalf of the estate].)
The Menlo Trustees do not dispute that, having filed suit in their capacity as successor trustees alleging claims for malpractice and breach of fiduciary duty against the Law Firms on behalf of the trusts, the Menlo Trustees are bound by the engagement agreements to the extent Klein engaged the Law Firms in his capacity as trustee. The central question, therefore, is the capacity in which Klein engaged Parker Milliken. It is helpful for this analysis to understand the contexts in which a trustee would hire an attorney in the trustee’s fiduciary or personal capacity (or both). The Supreme Court’s analysis in Moeller, supra, 16 Cal.4th 1124 provides guidance on this question.
In Moeller, the court considered whether a successor trustee of a family trust, who objected to the former trustee’s final accounting and petition for fees, could compel the former trustee to produce attorney-client documents related to trust administration during the former trustee’s tenure. (Moeller,
19
supra, 16 Cal.4th at pp. 1128-1129.) As the court framed the underlying question, “Who is currently the holder of the attorney- client privilege with regard to the legal advice [the former trustee] procured on behalf of the . . . trust while [he] was trustee?” (Id. at p. 1130.) The court concluded the successor trustee assumed the attorney-client relationship and controlled the privilege. (Id. at pp. 1129-1130.)
The Moeller court began its analysis by recognizing that “[t]he Probate Code implicitly authorizes a trustee to become an attorney’s client and to claim the attorney-client privilege.” (Moeller, supra, 16 Cal.4th at p. 1129.) In particular, “[a] trustee may hire an attorney ‘to advise or assist the trustee in the performance of administrative duties.’ (§ 16247.) A trustee may also ‘prosecute or defend actions, claims, or proceedings for the protection of trust property and of the trustee in the performance of the trustee’s duties.’ (§ 16249, subd. (a).) [And] [o]f course, a trustee involved in litigation concerning the trust may hire a lawyer—indeed, the trustee often would be well advised to do so.” (Moeller, at pp. 1129-1130.) “Any trustee who exercises the powers granted in [Probate Code] sections 16247 and 16249 ‘consults a lawyer for the purpose of retaining the lawyer or securing legal service or advice from him in his professional capacity’ (Evid. Code, § 951), and the trustee does so on behalf of the trust. Therefore, the trustee, qua trustee, becomes the attorney’s client.” (Id. at p. 1130, italics added.) Because the “trustee, qua trustee” is the client, and a successor trustee succeeds to the rights and duties of a former trustee, the attorney-client privilege passes to the successor trustee. (Id. at pp. 1130-1131.)
20
The Moeller court recognized an important exception:
“[T]he successor trustee inherits the power to assert the privilege only as to those confidential communications that occurred when the predecessor, in its fiduciary capacity, sought the attorney’s advice for guidance in administering the trust.” (Moeller, supra, 16 Cal.4th at p. 1134.) Thus, “[i]f a predecessor trustee seeks legal advice in its personal capacity out of a genuine concern for possible future charges of breach of fiduciary duty, the predecessor may be able to avoid disclosing the advice to a successor trustee by hiring a separate lawyer and paying for the advice out of its personal funds.” (Ibid.) The court acknowledged “the distinction between these two types of confidential trusteeattorney communications—administrative, on the one hand, and defensive, on the other—may not always be clear” (id. at p. 1135), but “a trustee can mitigate or avoid the problem [of lack of clarity as to the trustee’s capacity as the client] by retaining and paying out of his or her own funds separate counsel for legal advice that is personal in nature.” (Ibid.)
2. The Parker Milliken agreement on its face shows that Klein engaged Parker Milliken in his fiduciary capacity as trustee
The Law Firms point to three provisions in the Parker Milliken agreement that demonstrate Klein engaged the firm in his fiduciary capacity as trustee. We agree this is the only reasonable interpretation of the three provisions and the agreement as a whole.
First (and most significantly), Klein signed the agreement above the printed signature: “Leslie Klein, Trustee.” (Block capitalization omitted.) While it is true the signature did not say
21
“Leslie Klein, as Trustee,”8 the placement of Klein’s name adjacent to his fiduciary title “Trustee” is most reasonably interpreted to mean he signed the agreement in his trustee capacity. Further, the use of Klein’s title as trustee underscores that Klein did not sign the agreement solely in his personal capacity. (See Falkowski v. Imation Corp. (2005) 132 Cal.App.4th 499, 518 [executive was not personally liable on contracts as agent of company where he “signed his name above his printed corporate title in executing the relevant documents, thereby giving adequate indication of his status as corporate agent.”].) Moreover, Parker Milliken drafted the agreement, including the signature block, and it is not plausible that the firm would have written “Leslie Klein, Trustee” if it intended to limit its representation to Klein’s personal interest (to protect its attorney-client privilege with Klein and avoid any conflicts).
Second, the Parker Milliken agreement stated the firm would be representing Klein “in connection with the contested proceedings concerning the Menlo trusts, of which you [Klein] are trustee (the ‘Matter’).” Even assuming the phrase “of which you are a trustee” did not indicate Klein’s capacity in entering the agreement, the scope of the engagement—in connection with the probate court action (the “contested proceedings”)—shows that the firm necessarily represented Klein in his fiduciary capacity
8 In the Buchalter agreement, Klein’s printed signature was “Leslie Klein, individually and as Trustee.” Comparing the signatures illuminates how the Parker Milliken agreement was woefully ambiguous with respect to Klein’s personal capacity, which is explicit in the Buchalter agreement; it does not suggest to us that the use of the preposition “as” next to “Trustee” is dispositive.
22
because the proceedings asserted causes of action for an accounting, in addition to seeking removal of Klein as trustee and a surcharge. A demand for an accounting is a quintessential claim against a trustee in his or her fiduciary capacity concerning trust administration. (See Kasperbauer v. Fairfield (2009) 171 Cal.App.4th 229, 235 [“Preparing the accounting and responding to the beneficiaries’ objections to that accounting are aspects of trust administration.”]; accord, Fiduciary Trust Internat. of California v. Klein (2017) 9 Cal.App.5th 1184, 1201- 1202 [“one of the trustee’s primary duties is to respond to questions and objections by beneficiaries regarding a fiduciary’s accountings”]; see also Moeller, supra, 16 Cal.4th at pp. 1129- 1130 [Prob. Code, § 16247 authorizes trustee to hire an attorney “‘to advise or assist the trustee in the performance of administrative duties’” and to prosecute or defend actions relating to “‘the performance of the trustee’s duties’”].)
Although a petition to remove or surcharge a trustee may expose a trustee to personal liability for negligence or misconduct, these petitions are only partially personal. Such petitions affect the interests of the trust as much (or in the case of unmeritorious petitions, even more so) than the individual serving as trustee, because they constitute a time- and resourceconsuming challenge to (and interference with) trust administration. (Powell v. Tagami (2018) 26 Cal.App.5th 219, 227, 237 [“‘While defense against [the surcharge] allegations may have benefited [the trustee] personally by eliminating the possibility of individual liability, they also benefited the trust by eliminating charges raising serious questions about whether she had and could continue to administer the trust properly.”].)
23
As discussed, a trustee in a fiduciary capacity would be “well advised” to hire a lawyer in litigation concerning the trustee’s administration. (Moeller, supra, 16 Cal.4th at p. 1130.) Further, we are not aware of any authority (nor have the Menlo Trustees cited any) stating a petition filed in probate court pursuant to Probate Code section 16420, subdivisions (3) and (5) (to remove and surcharge a trustee), may name a trustee in his or her personal capacity without naming the trustee in his or her fiduciary capacity. Indeed, the record contains petitions naming Klein in both capacities, with Parker Milliken appearing for Klein. In addition, if the trustee prevails against a petition for surcharge or removal, the trustee and the lawyers are entitled to recover their fees and costs from the trust property. (Estate of Gump (1991) 1 Cal.App.4th 582, 604 [“It is established that attorney fees and litigation costs incurred in the trustee’s successful defense of an action brought by the beneficiary are recoverable.”].)
As discussed, a trustee may “seek[] legal advice in its personal capacity out of a genuine concern for possible future charges of breach of fiduciary duty,” but a trustee, consonant with his or her fiduciary responsibilities, would also need to retain lawyers to represent the trust’s interests against adversarial claims. (Moeller, supra, 16 Cal.4th at pp. 1130, 1134- 1135; see Fiduciary Trust Internat. of California v. Klein, supra, 9 Cal.App.5th at p. 1202 [“the mere fact that a communication relates, however broadly, to a petition for surcharge or removal does not prove that the legal advice contained within the communication was sought or obtained by the predecessor trustee out of concern for personal liability as opposed to concern for the general health of the trust”].)
24
Finally, the fee payment provision of the Parker Milliken agreement, which states that invoices “will be sent to you and it will be your responsibility to allocate our fees among the various Menlo trusts of which you are a trustee,” is consistent only with the firm’s engagement of Klein in his fiduciary capacity, not Klein personally. As the Supreme Court emphasized in Moeller, “‘[a] trustee cannot compel the trust to pay his attorney’s fees unless the services so employed were incurred in the management and preservation of the trust estate.’” (Moeller, supra, 16 Cal.4th at p. 1135; accord, Estate of Vokal (1953) 121 Cal.App.2d 252, 260.) Conversely, because there is no provision making Klein personally responsible for payment of Parker Milliken’s fees, if the firm was representing him solely in his personal capacity, the firm would have had no recourse to collect its fees if the probate court found Klein acted improperly and/or could not charge the trusts for his personal defense. Moreover, such a provision charging the trusts for the firm’s representation of Klein in his personal capacity would fly in the face of the Supreme Court’s admonition that a trustee who wishes to hire a personal lawyer would need to “pay[] for the advice out of its personal funds.” (Moeller, at p. 1134.)
The trial court’s reading of the “scope of representation”
provision in the engagement agreement to mean Parker Milliken’s representation of Klein was solely personal is not a reasonable interpretation of the agreement. As discussed, this provision stated the law firm would be representing “only you as the client,” and it would not be representing “any person related or unrelated to Client nor any parent, subsidiary or other affiliated entity nor any shareholder, partner, director, officer, employee or agent of Client.” The court found, without further
25
explanation, that this language “precludes any representation of Klein in his representative capacity as trustee.”
The flaw in the court’s reading of this boilerplate scope-ofrepresentation provision is that the court assumed the word “you” referred to Klein personally. As discussed, the agreement stated “[f]or the purposes of this letter, you will be referred to as the ‘Client’ or ‘Leslie Klein,’” but it did not specify whether it was referring to Klein in his fiduciary or personal capacity. Accordingly, the fact that Parker Milliken in the scope-ofrepresentation provision clarified that the firm was not agreeing to represent anyone other than Klein (such as Klein’s law firm, or a trust accountant) does not resolve the question whether Klein engaged Parker Milliken personally or in his fiduciary capacity on behalf of the trusts’ interests.9
9 Because the agreement is reasonably susceptible to Parker Millikin’s interpretation that Klein engaged the firm in his trustee capacity (or trustee and personal capacity), and it is not reasonably susceptible to the Menlo Trustees’ interpretation that under the agreement Parker Millikin represented Klein solely in his individual capacity, we do not consider the declarations of the attorneys who drafted and negotiated the agreements offered as extrinsic evidence of the parties’ intent in entering the agreement. (Brown v. Goldstein (2019) 34 Cal.App.5th 418, 433.)
We also deny the motions for judicial notice filed by Parker Milliken on November 14, 2025 and the Menlo Trustees on January 5, 2026 because the offered documents regarding representations made in the probate court action are not relevant to our resolution of the appeal. (See Coyne v. City and County of San Francisco (2017) 9 Cal.App.5th 1215, 1223, fn. 3 [denying judicial notice as to documents that were not relevant to court’s analysis]; Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 482 [same].)
26
3. The Menlo Trustees have not established an unclean hands defense, and the trial court must compel arbitration
Because the Parker Milliken and Buchalter agreements apply to the Menlo Trustees as a matter of law, the Law Firms met their burden on the motions to compel arbitration of proving that an agreement to arbitrate the disputes exists.10 The burden therefore shifted to the Menlo Trustees to prove by a preponderance of the evidence a defense to enforcement. (Pinnacle, supra, 55 Cal.4th at p. 236.)
The Menlo Trustees contend, as they did in the trial court, that the Law Firms cannot enforce the agreements to arbitrate because they have unclean hands, in that the engagement agreements were intended to assist Klein in his illegal conduct and cover it up. We are not persuaded.
10 The Menlo Trustees also argue in their respondents’ brief, as they did in the trial court, that the Buchalter and Parker Milliken agreements are binding only against Klein in his personal capacity because the engagement agreements do not identify the trust under Probate Code section 18000, subdivision (a).) There is no colorable argument that the Buchalter agreement, which referred to Klein’s representation “‘in your individual capacity and as Trustee in connection with the Menlo Litigation’” failed to reveal his representative capacity. Further, we agree with the trial court that both the Buchalter agreement (defining the Menlo litigation to mean “the 24 pending petitions consolidated with the lead case captioned Frank[lin] Henry Menlo Irrevocable Trust”) and the Parker Milliken agreement (identifying the “contested proceedings concerning the Menlo trusts, of which you are the trustee”) adequately identified the trusts at issue under Probate Code section 18000, subdivision (a).
27
“A proceeding to compel arbitration is in essence a suit in equity to compel specific performance of a contract.” (Freeman v. State Farm Mut. Auto. Ins. Co. (1975) 14 Cal.3d 473, 479; accord, Villareal v. LAD-T, LLC (2022) 84 Cal.App.5th 446, 457.) “Accordingly, equitable principles come into play and the actions of a party seeking to compel arbitration can be considered by the trial court and [the appellate] court. Specifically, no one can take advantage of his own wrong.” (Weisman v. Johnson (1982) 133 Cal.App.3d 289, 295.) “‘“Whether the defense [of unclean hands] applies . . . depends on . . . the nature of the misconduct, and the relationship of the misconduct to the claimed injuries.”’” (Jade Fashion & Co., Inc. v. Harkham Industries, Inc. (2014) 229 Cal.App.4th 635, 653; accord, Aguayo v. Amaro (2013) 213 Cal.App.4th 1102, 1110.) “Any unconscientious conduct connected with the controversy before the court [is] sufficient to warrant application of the unclean hands defense.” (Kendall- Jackson Winery, Ltd. v. Superior Court (1999) 76 Cal.App.4th 970, 980.) “‘The misconduct must “‘“prejudicially affect . . . the rights of the person against whom the relief is sought so that it would be inequitable to grant such relief.”’”’” (Jade Fashion, at p. 654; accord, Meridian Financial Services, Inc. v. Phan (2021) 67 Cal.App.5th 657, 685.)
The Menlo Trustees assert as evidence of unclean hands the Law Firms’ “apparent awareness that Klein’s authority was questionable at best,” noting that both engagement agreements acknowledged the probate court action was adversarial. They further argue that the purpose of the engagement agreements was to facilitate and cover up Klein’s illicit conduct, citing the probate referee’s 2022 findings that Klein committed egregious misconduct and, as alleged in the petitions, that “the law firms
28
justified Klein’s conduct in the probate court by filing false and misleading accountings that included their payments.”
In other words, the Menlo Trustees rely on the allegations in their malpractice complaint and conspiracy petition as evidence of unclean hands, which they argue should equitably bar an arbitrator from adjudicating those claims. But the conspiracy allegations in the complaint and petition do not constitute evidence the Law Firms acted unethically or improperly with respect to “the transaction at issue” (the agreement). (Jade Fashion & Co., Inc. v. Harkham Industries, Inc., supra, 229 Cal.App.4th at p. 653.) Moreover, as discussed, petitions by a trust beneficiary to compel an accounting or for a trustee’s removal and surcharge are characteristically adversarial, and the trustee will “of course” engage lawyers to assist in the proceedings. (See Moeller, supra, 16 Cal.4th at pp. 1129-1131.) There is no evidence, or even any material allegation, that Parker Milliken in 2012 and Buchalter in 2016, in drafting and executing the engagement agreements, acted improperly or were aware that Klein had committed egregious misconduct, as the probate court referee found 10 years later.11
11 Because we hold the Law Firms can compel arbitration of the malpractice complaint and conspiracy petition, we do not reach whether the trial court abused its discretion under section 1281.2, subdivision (c), in declining to compel arbitration of the claims against Buchalter.
29
DISPOSITION
The orders denying the Law Firms’ motions to compel arbitration of the malpractice action (24STCV03284) and the conspiracy petition (24STCP00403) are reversed. The matters are remanded to the trial court with directions to vacate the orders denying the Law Firms’ motions to compel arbitration and to enter new orders granting the motions. The Law Firms are to recover their costs on appeal.
FEUER, J.
We concur:
MARTINEZ, P. J.
SEGAL, J.