Heldman v. Heldman (In re Heldman)

ESTATE OF WLLIAM JOSEPH HELDMAN, Deceased.

JOHN HELDMAN, Petitioner and Respondent, v. WILLIAM HELDMAN, Objector and Appellant.

B304072

California Court of Appeals, Second District, Seventh Division

May 16, 2022

NOT TO BE PUBLISHED

APPEAL from orders of the Superior Court of Los Angeles County No BP169099 David J. Cowan, Paul T. Suzuki and Ana Maria Luna Judges. Affirmed.

Meir J. Westreich for Objector and Appellant.

Gostanian Law Group, Amy L. Gostanian, and Michelle C Bartolic; Law Office of Jeffrey A. Coleman and Jeffrey A. Coleman for Petitioner and Respondent.

FEUER J.

William and John Heldman are the sons of William Joseph Heldman, who died in 2014. William^[1] appeals from probate court orders (1) overruling William's demurrer to John's third amended Probate Code^[2] section 850 petition; (2) denying William's motion for a permanent injunction and order to show cause regarding contempt to enforce a partial settlement agreement between William and John; and (3) granting John's motion to disqualify William's counsel, Meir J. Westreich.^[3] We conclude the first two orders are nonappealable and dismiss the appeal as to those orders.

As to John's disqualification motion, William contends on appeal substantial evidence does not support the probate court's finding there was a substantial relationship between Westreich's representation of John in a 1983 deposition involving real property William Joseph transferred to John and John's allegation in this case that William Joseph transferred property to William. William also contends that although Westreich may be called as a witness in this case about William Joseph's prior property transactions (as William Joseph's longtime lawyer) and Westreich's debt on a promissory note allegedly owed to the estate, disqualification is not supported because William waived any conflict and John failed to show Westreich's dual role would cause detriment to John or the integrity of the judicial process. We agree with both contentions and reverse the probate court's order disqualifying Westreich.

FACTUAL AND PROCEDURAL BACKGROUND

A. The Estate

William Joseph died intestate on September 15, 2014. He had four surviving children: William, John, Diane Waldorf, and Edward (Ed) Heldman. On December 9, 2015 William filed a petition for probate requesting to be appointed administrator of William Joseph's estate. On February 9, 2017 John filed a competing petition for probate to be appointed administrator of the estate.

B. The Partial Settlement Agreement

At the February 28, 2018 hearing on the competing petitions for probate, William and John reached a partial settlement agreement, enforceable under Code of Civil Procedure section 664.6.^[4] The probate court^[5] recited the terms into the record. William and John agreed John would be appointed special administrator to sell gold coins that belonged to the estate through a designated broker. The broker would distribute the sales proceeds directly to a blocked account. In addition, John, as special administrator, would have authority to enter into an agreement with Yvonne Hines^[6] on behalf of the estate. The parties also agreed John "may pursue a petition under Probate Code section 850 against William . . . as an interested person, without objection by William Heldman, to pursue claims on behalf of the estate for recovery of property." At the hearing Westreich informed the court the parties "agreed we would reduce this to a written order."

At an April 19, 2018 hearing, William and John, through their counsel, agreed to entry of an order based on the February 28, 2018 stipulation. Westreich drafted the order, and John's attorney (Amy Gostanian) made interlineations. The probate court^[7] signed the order at the hearing (the April 19 order). The order memorialized the partial settlement agreement terms from the February 28, 2018 hearing. Paragraph 5 of the April 19 order states, "On or before April 2, 2018, Petitioner John Heldman in his capacity as an interested party may file a Petition pursuant to Probate Code § 850 against Objector William Heldman without objections as to his standing to file that Petition."

On June 5, 2018, the probate court^[8] signed and entered a second order after a hearing confirming the stipulation on the record (the June 5 order). The order again recited the terms of the February 29, 2018 partial settlement agreement, including language in paragraph 5 that was almost identical to that in the April 19 order.

C. William's Demurrer to John's Section 850 Petition

On March 29, 2018 John filed his section 850 petition. On September 13, 2019 John filed a third amended petition (following two demurrers and a stipulation for dismissal with leave to amend), naming as respondents William, Adam Heldman (William's son), and Westreich.

The petition alleged that in 1987 William Joseph, who owned a night club, was shot "by an infamous crime family," leaving him "completely blind . . . and completely dependent upon those around him to manage his finances." William Joseph's "checkered past made him wary of holding title to assets in his own name." William Joseph transferred real and personal property to William "with the intent that [William] would constructively hold and manage the property for Decedent and either return it to Decedent at this request or distribute it to Decedent's heirs upon his death, and that [William] was aware of Decedent's intent and consented to carry out his wishes."

The petition alleged William sold an expensive vehicle and house in Long Beach that belonged to William Joseph, but William refused to turn over the sale proceeds to the estate. In addition, bank accounts in the name of William Joseph, William, and other unnamed individuals belonged to the estate, and William failed to turn over to the estate all the valuable coins he held that belonged to William Joseph. Further, William Joseph made a $130, 000 loan to Westreich secured by the June 28, 2007 and July 23, 2013 deeds of trust.^[9] The petition also alleged the estate had claims to a Las Vegas, Nevada property on which the deed of trust secured a $120, 000 note; an oceanfront property in Rosarito, Mexico; two vacant lots in Riverside; a Yorba Linda house in which William resided; and a Las Vegas house in which Diane resided.

The petition asserted causes of action against William and Adam for return of estate assets, an accounting, a declaration the described property was held in a resulting trust owned by the estate, and for money had and received. The petition also asserted a cause of action for declaratory relief, which sought "a judicial determination and declaration as to the balance due on the loan memorialized by the 2007 Deed of Trust and the 2013 Deed of Trust, respectively, due to the Decedent."

On November 26, 2019 William and Adam filed a demurrer to the third amended section 850 petition. At the January 9, 2020 hearing on the demurrer, the probate court^[10] dismissed Adam with prejudice from the petition pursuant to the parties' stipulation. The court overruled William's demurrer, finding John had sufficiently pleaded facts to support his causes of action.

D. John's Motion To Disqualify William's Counsel

On June 27, 2019 John moved to disqualify Westreich as William's attorney. John argued Westreich, as William Joseph's longtime attorney, was "intimately involved in the inner-workings of the Heldman family for approximately 30 years." Further, Westreich previously represented John, Diane, and Ed, thereby obtaining private and privileged information about them. Westreich failed to obtain written consent from the three heirs for his adverse representation of William. In addition, William Joseph loaned $130, 000 to Westreich in 2007, and by July 23, 2013 Westreich's debt had increased to $192, 543; a deed of trust securing an amended promissory note was recorded on Westreich's house. John argued Westreich violated the State Bar Rules of Professional Conduct by concealing his personal debt to the estate. Further, State Bar Rules of Professional Conduct, rule 3.7 (rule 3.7) required disqualification because Westreich was likely to be a witness based on his knowledge of William Joseph's business transactions as his longtime attorney.

John's attorney, Michelle Bartolic, submitted a supporting declaration in which she declared her office first became aware in May 2019 of Westreich's debt to William Joseph and the deed of trust recorded on Westreich's house. She added that "[a]s of June 26, 2019, a title search of Westreich's home . . . showed no reconveyance had been recorded." She stated on information and belief that Westreich had not made any payments of interest or principal to the estate.

John stated in his declaration, "Meir Westreich previously represented me in or about 1983 in relation to a piece of property that my father . . . had purchased then transferred into my name. I believe that he did this in order to hide the asset from potential creditors." John was deposed in connection with the bank loan on the property, and Westreich represented John at the deposition and "held himself out as [John's] attorney in communications with the other parties involved in the dispute." Further, Westreich received confidential information from John during Westreich's representation of him. John never signed a conflict waiver or gave written consent to Westreich's representation of William. John concluded, "[T]he instant action also involves my father transferring certain pieces of real and personal property into the names of others, namely Objector William Heldman, and is substantially similar to the action Meir represented me in."

Diane and Ed also submitted declarations in support of the motion. Diane stated...