Selander v. Valentine CA6 ( 2020 )


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  • Filed 8/26/20 Selander v. Valentine CA6
    NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.
    IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
    SIXTH APPELLATE DISTRICT
    DEREK SELANDER et al.,                                              H039828
    (Santa Clara County
    Plaintiffs and Respondents,                               Super. Ct. No. 1-08-CV-112230)
    v.
    JAMES VALENTINE, as Trustee, etc.,
    Defendant and Appellant.
    This appeal involves a long running dispute over the administration of a life
    insurance trust (hereinafter, “KMP Trust”). Appellant James Valentine appeals from an
    order removing him as trustee of the KMP Trust. Valentine challenges the order on
    several grounds. We reject his contentions and affirm the order.
    I. BACKGROUND
    A. Prior Case History
    Respondents Kurt and Derek Selander are the beneficiaries of a life insurance
    trust, which was established by Kurt and Derek’s mother, Kelsey Phipps, to provide for
    the “ ‘health, maintenance, education, travel, and welfare, and general welfare’ ” of her
    two sons. Phipps died in October 2000. In May 2001, the KMP Trust was funded with
    $20,524,234 from the proceeds of Phipps’s life insurance policy. Hal Selander, their
    father, became guardian to Kurt and Derek, who were still minors at the time.
    Valentine knew Phipps personally and had helped her to set up the trust while
    Phipps was alive. Phipps named Valentine as trustee. Valentine set his annual
    compensation at $250,000. Between 2001 and 2004, Valentine pursued an investment
    strategy of buying and holding high tech stocks, on behalf of the trust, for very short
    periods of time. His practice was to sell the stocks when the stock price increased, but
    not sell them when the price fell, which resulted in short-term gains, but unrealized long-
    term losses. Starting in 2005, the beneficiaries began to request detailed financial reports
    and eventually demanded formal accountings. Substantial litigation over the accountings
    ensued, and ultimately Valentine was suspended as trustee. Following Valentine’s
    suspension, the litigation continued, including numerous appeals to this court.1
    A petition to remove Valentine as trustee was filed by Hal Selander, as guardian
    for Kurt, and later joined by Derek, and the interim trustees, who added a petition for
    surcharges as damages. The petition to remove Valentine as trustee stated the following
    grounds for removal: breach of the duty to provide beneficiaries with information under
    Probate Code section 16060 et seq.,2 breach of the duty of loyalty under section 16004,
    and violation of sections 16006 and 16007 for failure to preserve trust property consistent
    with the Prudent Investor Act.
    Following the trial, the court made a number of findings. It found that Valentine
    failed to report to the beneficiaries as required under section 16060 et seq. The court also
    found that Valentine had breached his duty of loyalty by doing the following: by paying
    himself excessive compensation before the trust was funded, by failing to adjust his
    compensation downward as the value of the trust decreased, by failing to provide
    adequate accountings, by resisting reasonable requests for information from the
    beneficiaries, and by failing to comply with court orders. The court also concluded that
    1
    These appeals addressed insufficient accountings, sanctions, discovery, a SLAPP
    motion, and a petition to remove Valentine for insolvency under Probate Code section
    15642, among other issues. (See Guardianship of K.S. (2009) 
    177 Cal. App. 4th 1525
    ;
    Burdett v. Doyle (Dec. 15, 2009, H033061) [nonpub. opn.]; Selander v. Valentine (Aug.
    30, 2010, H034324) [nonpub. opn]; and Burdett v. Caselli (Sept. 29, 2010, H033356)
    [nonpub. opn.].)
    2
    Subsequent statutory references are to the Probate Code unless otherwise
    provided.
    2
    Valentine’s investment practices violated the Prudent Investor Act. However, because
    the trust instrument gave Valentine “ ‘absolute discretion’ ” in investing, the court found
    that Valentine’s “unconventional investment strategy”3 did not amount to a violation of
    his duty to preserve trust property.
    Ultimately, although the trial court acknowledged it could have removed
    Valentine, the court declined to impose the requested remedy of removal. Rather, the
    court reinstated Valentine with conditions, requiring him: to pay sanctions incurred in
    the litigation to the trust, to limit administrative costs to a fixed percentage of the value of
    the trust, and to return some of his earned fees as a surcharge for his breaches of trust.
    The court concluded: “Valentine may have been well-meaning but he was marginally
    competent in his trust management. What is most troubling is his unrepentant attitude
    concerning his investment strategy. His limited success in short-term trading was
    principally the result of luck and good-fortune and not the result of a well-designed and
    sophisticated plan of investment. He failed to take advantage of professional investment
    advice. He put the assets of the Trust a[t] considerable risk and acted irresponsibly in
    failing to recognize his limitations as a trustee. He would have disappointed the Settlor’s
    trust she put in him. Did he technically violate the terms of the Trust in his investment
    actions? No, because of the unfettered discretion it gives him. But he did violate the
    duty to account and the duty of loyalty and with that he came very close to being
    removed for mismanagement. Any future failure will certainly be evaluated in light of
    these transgressions.”
    3
    An expert testified that had Valentine simply invested the trust assets in a total
    stock market index fund and a municipal bond fund over the same time period, he could
    have made the trust an additional $4 million. As it was, the expert calculated that the net
    of Valentine’s short-term gains against his long-term losses was $616,657.
    3
    In February 2012, this court affirmed the trial court’s decision, concluding that the
    court’s chosen remedy was a permissible exercise of its discretion. (Burdett v. Olson &
    Le (Feb. 9, 2012, H035152) [nonpub. opn.].)
    B. Subsequent Proceedings
    At a May 2012 hearing, the trial court expressed its view that its “primary
    objective” going forward would be to “preserve the trust funds for the beneficiaries.”
    The court explained that this case had been “scandalously over-litigated . . . for years,
    inuring to the benefit of lawyers and experts and not the beneficiaries.” The court
    encouraged the parties to engage in “serious discussion about the pending issues to see if
    this matter can be resolved.”
    In June 2012, the court directed Valentine to “either hire a professional to manage
    the investments or provide by July 31 a written investment strategy and plan for the
    administration of the trust with cost projections,” and the court barred the parties from
    initiating “any litigation or spend[ing] any trust dollars on legal fees before” the next
    hearing.
    At an August 2012 status hearing, the court expressed its disappointment that
    “there’s been virtually no progress in resolving the multitude of issues in this case” since
    the parties last met. The court indicated it was encouraged that there was apparently
    “some discussion as to a global settlement.” At the conclusion of the hearing, the parties
    agreed to go to mediation.
    At a November 2012 status hearing, the trial court learned that Valentine intended
    to retain new counsel. As a result, Valentine’s former attorney sought permission from
    the court to be paid from the KMP Trust. The beneficiaries agreed to pay Valentine’s
    former attorney a fixed fee of $500,000 from the trust. Valentine’s former attorney
    agreed to the compromised fee. Valentine objected and requested a continuance, but the
    court nonetheless approved the fee request. The beneficiaries then requested a court
    order to release trust funds to pay the mediation fee, as Valentine had not yet consented
    4
    to payment. Valentine again objected. After the court indicated its intention to “set a
    special hearing . . . on the question of whether or not Mr. Valentine should be removed as
    the trustee if” he did not direct payment of the mediation fee, Valentine relented and
    agreed to direct payment. The court then closed as follows: “This dispute has lingered
    much too long. Much too much has been spent, and I’m chagrined that the purposes of
    the trust have been thwarted. It is clear that a different approach needs to be taken and
    the litigious past needs to be abandoned.”
    In December 2012, the beneficiaries filed a status report. In it, they informed the
    court that they intended to file a petition to remove Valentine as trustee. The
    beneficiaries reported that they had come to an agreement regarding outstanding fees, but
    that Valentine was not a party to the agreement because Valentine and his attorney left
    the mediation after they claimed that “they did not have all of the documents necessary to
    address the issues.” The beneficiaries also asserted that Valentine had not cooperated in
    the effort to pay Valentine’s former attorney. Finally, the beneficiaries contended that
    Valentine had neither hired a professional financial manager nor submitted an investment
    strategy, in violation of the court’s prior directions.
    Later that month, the court held a hearing. After some discussion on the issue of
    paying Valentine’s former attorney, the court learned that Valentine no longer objected
    and had directed that the payment be made. The court then moved to discuss the ongoing
    mediation and the beneficiaries’ status report. Valentine disputed the substance of the
    status report. The beneficiaries’ attorney asserted that Valentine had “all the documents,”
    which was “more than enough information to resolve the fee issue . . . .” He asked the
    court to “set a hearing to confirm that settlement,” and offered that “this is another—
    excuse me for editorializing—example of how this is not working with Mr. Valentine.”
    Based on the claimed lack of documents, the court ordered Valentine to identify any
    documents that he needed from any party regarding the fee dispute. The court also stated
    it would discuss the request for Valentine’s removal at a future hearing.
    5
    At a March 2013 status hearing, the court received a status update on the
    mediation. The substance of the report was that the latest mediation was “unsuccessful in
    part because” Valentine’s new attorney “left the mediation.” Valentine’s attorney
    admitted he left for a “badly needed” dental appointment, but that he had his cell phone
    and Valentine stayed at the mediation. Valentine’s attorney admitted that he accepted the
    dental appointment after the mediation session had been scheduled, but believed he was
    “within easy driving to get back to it if any progress was being made.” The court then
    inquired as to the status of the contingent settlement agreement reached in the prior
    mediation. Valentine’s attorney indicated that he was unable to advise Valentine on
    whether to accept it because they needed to receive “all the documentation that was told
    to us was available . . . .” The court then noted that Valentine had failed to timely
    identify, as the court had previously ordered, any missing documents he required to
    proceed with settlement discussions. After the hearing, the court ordered Valentine to
    serve on counsel for the beneficiaries, by March 18, 2013, copies of the most recent
    account statements from all financial institutions that hold trust assets.
    On May 8, 2013, the beneficiaries filed a petition to remove Valentine as trustee.
    The beneficiaries alleged that since his reinstatement, Valentine had done nothing to
    advance the purpose of the trust. Instead, they alleged that Valentine had caused the
    parties to incur substantial legal fees to obtain court approval “of actions [that] all
    [parties] agreed upon.” The beneficiaries also alleged that Valentine failed to approve
    stipulations and orders for trust payments to the beneficiaries on a timely basis, that he
    failed to provide them with current account statements from financial institutions that
    hold trust assets, that he had failed to timely provide them with K-1’s so they could file
    their individual tax returns, and that he had failed to comply with court orders. The
    beneficiaries also asserted that since his reinstatement, Valentine had been a hostile
    trustee who sought retribution for the prior effort to remove him. They noted Valentine’s
    failure to make any good faith efforts to resolve any of the fee disputes.
    6
    Valentine filed a response on June 7, 2013, in which he specifically denied the
    allegations in the petition and requested an evidentiary hearing.
    A hearing on the removal petition was held on June 17, 2013. The court stated
    initially that it had set the hearing for one hour, but after receiving the response from
    Valentine “asking for an evidentiary hearing,” the court extended the hearing to three
    hours. Before the hearing began, an attorney for Valentine announced that he was
    making a special appearance to request a continuance to allow him to prepare for the
    evidentiary hearing. The attorney stated that Valentine had contacted him the prior
    Wednesday about representation in this proceeding. He stated that he only learned on
    Friday that the proceeding would be an evidentiary hearing, and so he needed a “short
    continuance” to prepare. He further stated that if the court denied a continuance, he
    “would not be able to proceed today in any capacity” and Valentine would represent
    himself.
    The beneficiaries’ attorney asserted that it had been “known for a number of
    months” that the beneficiaries would proceed with another petition to remove Valentine
    as trustee. He also asserted that the beneficiaries would suffer detriment from a
    continuance because “[t]he assets in this trust have not been attended to” for some time.
    He noted that Valentine had not filed the requisite noticed motion, ex parte application, or
    declaration in support of a continuance. Even overlooking that the request was
    procedurally improper, the beneficiaries’ attorney argued that Valentine had not
    established grounds for a continuance.
    The court denied the request for a continuance. The court recalled that the issue of
    Valentine’s removal as trustee had been raised months earlier, that the court had
    promised it would calendar the trustee removal issue if the parties could not resolve it,
    and “[t]his has been pending for some significant period of time.” The court determined
    that granting the continuance would be detrimental to the trust and prejudicial to the
    beneficiaries, as the trust funds “have not been overseen by anyone managing those funds
    7
    . . . since August of last year.” The court also observed that this attorney is “the tenth
    lawyer representing Mr. Valentine in this matter,” “[a]nd, by my count, there have been
    five in the last 12 months.” The court noted that Valentine’s prior counsel, who “to [the
    court’s] knowledge was still [Valentine’s] counsel until he resigned here today,” had
    “sent me a letter responding to this petition.” The court opined that Valentine’s “decision
    to keep changing lawyers . . . is part of the problem in this case.”
    The hearing then proceeded with Valentine representing himself in pro per. Under
    cross-examination, Valentine admitted that he did not provide trust account financial
    statements to the beneficiaries in accordance with the court’s prior orders. Rather, he
    admitted he had only provided statements “for every single account” on the previous
    Friday. He also admitted that he had not done an accounting of trust assets since his
    reinstatement as trustee.
    Valentine was asked whether he “refused to participate in [the first] mediation
    because [he] took the position that [he] did not have sufficient records” to proceed. He
    denied that he had done so, and also stated that the question was a violation of mediation
    confidentiality under the Evidence Code. He admitted that prior to the mediation, he did
    not attempt to settle any of the fee claims because, in his view, “[t]hey were not interested
    in any settlements whatsoever.” He denied leaving the second mediation early after his
    attorney left for a dental appointment. He admitted that he did not sign the settlement
    agreement that resolved those fee issues. He conceded that “in the last seven years” he
    had not agreed to settle “any issue” and, more specifically, that he had not “agreed to any
    resolution of any issues” since mediation ended.
    When asked if he actually wrote the investment plan that he claimed to have
    created, Valentine responded that he put it together after downloading “[o]ver a dozen”
    samples from the internet. When asked what percentage of the investment plan came
    from the sample investment plans, Valentine responded, “I don’t know.”
    8
    Derek testified that he had not received any financial statements that reflect trust
    assets during the last 12 months. He stated that he had asked for this information many
    times, but Valentine either did not respond or responded with incomplete information.
    He stated that he asked Valentine for an account of trust assets in March 2013, but never
    received an accounting. He also reported that he asked for a K-1 from the trust so that he
    could complete his individual tax return, and Valentine responded by recommending that
    he “[j]ust guesstimate [his] taxes.”
    Derek testified that he ran “specific string searches on Google for unique contents”
    in Valentine’s investment plan, and discovered that 80 percent of the contents of
    Valentine’s investment plan were copied from another investment plan that Derek found
    on the internet. Derek admitted that he does “not feel comfortable giving Valentine”
    certain information, because “[d]ealing with Valentine, I can honestly say he’s either
    delusional or a pathological liar. I do not trust him at all.”
    At the close of the hearing, the court addressed the parties. The court expressed its
    disappointment with Valentine’s assessment that he had complied with the court’s prior
    orders. In the court’s view, “there’s no question that Valentine and his attorneys began
    the scorched-earth practice” of litigation involving the KMP Trust. The court found that
    there was “clearly animosity between Mr. Valentine and the beneficiaries.” The court
    continued: “Further, there have been essentially two things that have . . . happened that
    . . . are significant failures. One is the failure to provide a resolution of [the] professional
    fees issue. This was failed on a number of grounds.” First, Valentine “opposed paying
    his own attorney fees . . . even after that attorney compromised his fees . . . .” Second,
    “he failed to timely identify documents that he needed to participate in the mediation
    process. The Court set a time-line for that. And it wasn’t met.”
    The court also found that Valentine provided statements to the beneficiaries on an
    untimely basis. The court determined that Valentine violated the court’s order to provide
    trust account statements to the beneficiaries by March 18, 2013. And, since his
    9
    reinstatement, the court found that there had been “no regular reporting” of financial
    information to the beneficiaries. The court closed as follows: “Mr. Valentine, you just
    don’t seem to understand. You don’t seem to get it. Therefore, you’re going to be
    removed as the trustee of this KMP trust by court order today. You will no longer have
    that responsibility.”
    The court later issued an order after evidentiary hearing removing Valentine as
    trustee of the KMP Trust.
    II. DISCUSSION
    A. Request for Continuance
    Valentine argues that the trial court erred by not granting his request for a
    continuance.
    In civil cases, continuances of trial are disfavored, the assigned trial dates are firm,
    and parties and their counsel must regard the trial date as certain. (Cal. Rules of Court,
    rule 3.1332(a) & (c).)4 A party seeking a continuance must make the request by a noticed
    motion or an ex parte application, with supporting declarations, as soon as reasonably
    practicable once the need for the continuance is discovered. (Rule 3.1332(b).) And then,
    the trial court “may grant a continuance only on an affirmative showing of good cause
    requiring the continuance.” (Rule 3.1332(c).) Good cause may be found where there is a
    “substitution of trial counsel, but only where there is an affirmative showing that the
    substitution is required in the interests of justice.” (Rule 3.1332(c)(4).) In ruling on a
    motion for continuance, the trial court must consider all relevant facts and circumstances,
    including the proximity of the trial date; whether previous continuances were granted; the
    length of the requested continuance; prejudice that parties or witnesses will suffer as a
    result of a continuance; whether the case is entitled to preferential trial setting; and
    whether the interests of justice are best served by a continuance. (Rule 3.1332(d).)
    4
    Subsequent undesignated rule references are to the California Rules of Court.
    10
    We review the trial court’s denial of a request for a continuance under the abuse of
    discretion standard. (County of San Bernardino v. Doria Mining & Engineering Corp.
    (1977) 
    72 Cal. App. 3d 776
    , 784.) We will disturb the trial court’s determination only
    where there has been a clear case of abuse and a miscarriage of justice. (Blank v. Kirwan
    (1985) 
    39 Cal. 3d 311
    , 331.)
    In this case, the trial court did not abuse its discretion in denying Valentine’s
    request for a continuance. Significantly, the request was not made by a noticed motion or
    ex parte application; rather, the matter was raised orally on the date set for the evidentiary
    hearing. It was also not made when Valentine ascertained the need for continuance prior
    to the hearing. The trial court specifically found that the current trustee removal petition
    had been pending for a “significant period of time,” and so Valentine had advance notice
    that he would need to retain counsel. In sum, the request was procedurally inadequate
    and untimely.
    In addition, Valentine failed to show good cause that his substitution of attorneys
    was in the interests of justice. In considering the request, the court properly considered
    the relevant circumstances of the case, including the fact that Valentine’s new attorney
    would have been his tenth attorney in this matter, and his fifth attorney in the last 12
    months. The court also properly considered whether a continuance would prejudice the
    other parties, including the beneficiaries, finding that the trust assets had been unattended
    and unmanaged for quite some time, and another delay would be detrimental to the trust.
    Under these circumstances, the interests of justice would not have been served by a
    continuance. Accordingly, the trial court did not abuse its discretion by declining to grant
    a continuance.
    B. Removal of Trustee
    1. The Trial Court Did Not Abuse Its Discretion
    Valentine challenges his removal as trustee, arguing that there were insufficient
    grounds to justify it.
    11
    “A trustee may be removed in accordance with the trust instrument, by the court
    on its own motion, or on petition of a settlor, cotrustee, or beneficiary under Section
    17200.” (§ 15642, subd. (a).) Section 15642, subdivision (b) sets forth grounds for
    removal of a trustee, which includes “[w]here the trustee has committed a breach of the
    trust” and “[w]here the trustee fails or declines to act.” The breach of the duty of loyalty,
    or any of several other statutory duties, is considered a breach of trust. (§ 16400.) A
    trustee has a duty of loyalty to administer the trust solely in the interest of the
    beneficiaries (§ 16002, subd. (a)), to keep beneficiaries “reasonably informed of the trust
    and its administration” (§ 16060), and “on reasonable request by a beneficiary, the trustee
    shall report to the beneficiary by providing requested information to the beneficiary
    relating to the administration of the trust relevant to the beneficiary’s interest.”
    (§ 16061.) Section 16062 sets forth a trustee’s obligation to provide an annual
    accounting of trust assets to each beneficiary.
    In addition, “[h]ostility between the beneficiary and the trustee is a ground for
    removal of the trustee when the hostility impairs the proper administration of the trust.”
    (Estate of Gilmaker (1962) 
    57 Cal. 2d 627
    , 632 (Gilmaker).) “The purpose of removing a
    trustee is not to inflict a penalty for past action, but to preserve the trust assets.
    [Citation.] ‘The question in each case is whether the circumstances are such that the
    continuance of the trustee in office would be detrimental to the trust.’ ” (Getty v. Getty
    (1988) 
    205 Cal. App. 3d 134
    , 139-140 (Getty).)
    “The removal and substitution of a trustee is largely within the discretion of the
    trial court.” 
    (Gilmaker, supra
    , 57 Cal.2d at p. 633.) We therefore review an order
    removing a trustee for an abuse of discretion. (Trolan v. Trolan (2019) 
    31 Cal. App. 5th 939
    , 957 (Trolan).) The trial court’s factual findings, in turn, are reviewed for substantial
    evidence. (Khani v. Ford Motor Co. (2013) 
    215 Cal. App. 4th 916
    , 920.) “We measure
    the trial court’s exercise of discretion against the legal principles governing the subject of
    its action. [Citations.] ‘ “The scope of discretion always resides in the particular law
    12
    being applied, i.e., in the ‘legal principles governing the subject of [the] action . . . .’
    Action that transgresses the confines of the applicable principles of law is outside the
    scope of discretion and we call such action an ‘abuse’ of discretion.” ’ ” (Trolan, at pp.
    957-958.) “ ‘To determine if a court abused its discretion, we must thus consider “the
    legal principles and policies that should have guided the court’s actions.” ’ ” (Id. at p.
    958.)
    In this case, substantial evidence supports the trial court’s findings that Valentine
    breached several statutory duties owed by a trustee, including his duty to keep the
    beneficiaries reasonably informed of the trust and its administration and his duty to
    provide information when requested by a beneficiary. Derek reported that Valentine
    failed to adequately respond to his requests for financial information and account
    statements of trust assets, and that Valentine failed to provide requested tax information,
    instead advising Derek to “guesstimate [his] taxes.”
    Substantial evidence also supports the trial court’s finding that Valentine failed to
    follow court orders to identify documents that he needed to settle the fee claims and to
    provide trust account statements by March 18, 2013. When a trustee “fails or declines to
    act,” as Valentine did here, he is subject to removal. (§ 15642, subd. (b).)
    Finally, substantial evidence supports the trial court’s finding that animosity
    between the trustee and the beneficiaries impaired the administration of the trust. Derek
    testified that Valentine was either “delusional or a pathological liar,” and as a result he
    “did not trust Valentine.” The record reflects Valentine was unable or unwilling to settle
    past grievances and put aside his documented tendency toward scorched-earth litigation
    involving the KMP Trust. It was a reasonable inference that Valentine’s conduct
    reflected an intense “animosity between [him] and the beneficiaries.” In short,
    substantial evidence supported the trial court’s implied finding that “ ‘the circumstances
    [were] such that the continuance of the trustee in office would be detrimental to the
    13
    trust.’ ” 
    (Getty, supra
    , Cal.App.3d at pp. 139-140.) Thus, Valentine’s removal as trustee
    was not an abuse of discretion.
    Valentine contends that under the heightened standard for removal that applies to
    named trustees, the circumstances of this case did not warrant his removal. We disagree.
    “[T]he court will not ordinarily remove a Trustee appointed by the creator of the trust.”
    (Estate of Bixby (1961) 
    55 Cal. 2d 819
    , 826.) Thus, a “settlor’s named trustee will be
    removed only for extreme grounds, such as incapacity, dishonesty, or lack of the
    qualifications necessary to administer the trust.” (Estate of Gilliland (1977) 
    73 Cal. App. 3d 515
    , 528.)
    In this case, the evidence showed that Valentine continued to defy court orders, he
    failed to respond to reasonable requests for information, he failed to timely furnish
    financial information that he was obligated to provide, and he signaled an intent to
    continue wasting trust funds. This was essentially a repetition of the conduct that nearly
    caused the trial court to remove him for mismanagement in the prior trustee removal
    proceeding. It also led the the trial court to warn Valentine that “[a]ny future failure will
    certainly be evaluated in light of these transgressions.” In our view, these circumstances
    constitute “extreme grounds,” which warranted Valentine’s removal as trustee. We find
    no error in his removal.
    2. There Was No Violation of Mediation Confidentiality That Materially
    Affected Valentine’s Substantial Rights
    Valentine argues that the contents of the mediation were disclosed at the
    evidentiary hearing, in violation of the Evidence Code. He points specifically to when he
    was asked to discuss whether: (1) he left the first mediation early, (2) he knew that a
    settlement agreement had been reached between the parties, and (3) he left the second
    mediation early after his attorney went to a doctor’s appointment.
    Evidence Code “[s]ection 1119 governs the general admissibility of oral and
    written communications generated during the mediation process. Subdivision (a)
    14
    provides in pertinent part that ‘[n]o evidence of anything said or any admission made for
    the purpose of, in the course of, or pursuant to, a mediation . . . is admissible or subject to
    discovery, and disclosure of the evidence shall not be compelled, in any . . . civil
    action . . . .’ (Italics added.)” (Cassel v. Superior Court (2011) 
    51 Cal. 4th 113
    , 123.)
    “Subdivision (c) of [Evidence Code] section 1119 further provides that ‘[a]ll
    communications, negotiations, or settlement discussions by and between participants in
    the course of a mediation . . . shall remain confidential.’ (Italics added.)” (Id. at pp. 123-
    124.) Thus, “absent an express statutory exception, all discussions conducted in
    preparation for a mediation, as well as all mediation-related communications that take
    place during the mediation itself, are protected from disclosure.” (Id. at p. 128.)
    Respondents contend that there was no error. Citing Foxgate Homeowners’ Assn.
    v. Bramalea California, Inc. (2001) 
    26 Cal. 4th 1
    (Foxgate), respondents argue that “there
    was no violation of mediation confidentiality because counsel for the beneficiaries was
    entitled to report Valentine’s obstructive conduct to the court.” In Foxgate, our high
    court determined that “[t]o carry out the purpose of encouraging mediation by ensuring
    confidentiality, the statutory scheme . . . unqualifiedly bars disclosure of communications
    made during mediation absent an express statutory exception.” (Id. at p. 15.) Thus, the
    court concluded that a declaration of counsel violated the Evidence Code, where that
    declaration disclosed mediation-related communications for the purpose of establishing
    bad-faith conduct at mediation. (Id. at p. 18.) However, the court noted that “[t]o the
    extent that the declaration of counsel stated that the mediator had ordered the parties to be
    present with their experts, there was no violation. As noted earlier, neither [Evidence
    Code] section 1119 nor [Evidence Code] section 1121 prohibits a party from revealing or
    reporting to the court about noncommunicative conduct, including violation of the orders
    of a mediator or the court during mediation.” (Id. at p. 18, fn. 14, italics added.)
    We need not determine whether or to what extent the complained-of questions
    violated mediation confidentiality because no error, assuming there was error, prejudiced
    15
    Valentine.5 “The remedy for violation of the confidentiality of mediation is that stated in
    [Evidence Code] section 1128: ‘Any reference to a mediation during any subsequent trial
    is an irregularity in the proceedings of the trial for purposes of Section 657 of the Code of
    Civil Procedure. Any reference to a mediation during any other subsequent noncriminal
    proceeding is grounds for vacating or modifying the decision in that proceeding, in whole
    or in part, and granting a new or further hearing on all or part of the issues, if the
    reference materially affected the substantial rights of the party requesting relief.’ ”
    
    (Foxgate, supra
    , 26 Cal.4th at p. 18, italics added.)
    Here, none of the complained-of questions materially affected Valentine’s
    substantial rights. In pronouncing its decision, the trial court made no reference to
    Valentine’s statements or conduct at any mediation session. Instead, in removing
    Valentine as trustee, the court specifically found that Valentine had violated statutory
    duties by providing statements to the beneficiaries on an untimely basis, by failing to
    meet court deadlines for providing trust account statements, and by not engaging in
    “regular reporting” of financial information the beneficiaries. The court also found that
    there was “clearly animosity” between Valentine and the beneficiaries that warranted his
    removal. Even assuming some or all of the complained-of questions violated mediation
    confidentiality, the violation did not materially affect Valentine’s substantial rights in the
    trustee removal proceeding.
    C. Missing Record
    Valentine asserts that his due process rights were violated because he was forced
    to file his opening brief without a complete record on appeal. Respondents concede that
    5
    Arguably, some of the complained-of questions did concern noncommunicative
    conduct. For instance, one question was whether Valentine left the first mediation
    session early. However, in asking Valentine why he left early, the beneficiaries’ attorney
    asked Valentine if he “took the position that [he] did not have sufficient records” to
    proceed. This is clearly a reference to something Valentine said at the mediation. Thus,
    while there was a noncommunicative aspect to this revelation (i.e., he left early), there
    was also clearly a reference made to communications that occurred at the mediation.
    16
    the transcripts for two hearings held on June 29, 2012, and August 31, 2012, appear to be
    missing from the record on appeal. However, respondents claim that Valentine has
    shown no prejudice from the omission.
    We agree with respondents. “ ‘To establish prejudice, a party must show “a
    reasonable probability that in the absence of the error, a result more favorable to [it]
    would have been reached.” [Citation.]’ [Citation.]” 
    (Trolan, supra
    , 31 Cal.App.5th at
    p. 950.) Valentine has not shown that the omission of the hearing transcripts prejudiced
    him. Respondent notes that the transcript of the June 29, 2012 hearing appears in the
    clerk’s transcript. Respondent also notes that an order following the August 31, 2012
    hearing is in the record, and that the order “merely stated that the parties stipulated to
    mediate certain issues, directed the parties to provide their adversaries with copies of
    specified documents, scheduled future proceedings, and ordered all trust assets to be
    placed in a blocked account.” Valentine does not challenge any of those rulings. We
    reject Valentine’s due process argument, as he fails to show any prejudice from the
    omission of the identified reporter’s transcripts.6
    III. DISPOSITION
    The order is affirmed. Respondents shall recover their costs on appeal.
    6
    We also observe that Valentine designated a record on appeal in excess of 10,000
    pages, spanning years of litigation. In his brief, he provided no citations to the record in
    his 19-page statement of facts, and cited only to the transcript of the June 17, 2013
    evidentiary hearing in the argument section of his brief. Under these circumstances, we
    find no prejudice to Valentine due to the missing reporter’s transcripts
    17
    _______________________________
    Greenwood, P.J.
    WE CONCUR:
    _____________________________________
    Elia, J.
    _____________________________________
    Danner, J.
    Selander et al. v. Valentine
    No. H039828