Case Number: A169579
Court: California Court of Appeal, First Appellate District, Division Three
Date Filed: August 31, 2025
Holding
The court held that the trial court did not err in declining to order the settlement proceeds be placed in annuities or a blocked account, but it erred in refusing to consider the GAL’s request for reimbursement of reasonable expenses; therefore the dismissal was reversed and the matter remanded for fee‑and‑expense determination.
Narrative
Lead – In a tightly contested conservatorship dispute, the California Court of Appeal clarified the division of authority between a guardian ad litem and a conservator, upheld the trial court’s discretion over the disposition of settlement funds, and remanded to allow reimbursement of the GAL’s reasonable expenses—an outcome that reshapes fee‑recovery strategy in probate‑related personal injury settlements.
Procedural backdrop – After a 2019 workplace accident left You Wei Dong with a severe brain injury, friend Zehui Li Yen was appointed GAL for Dong’s workers’‑compensation and later personal‑injury claims. In March 2021 Yen secured a conservatorship of Dong’s person and estate. By late 2022, concerns about Yen’s dual role as creditor and conservator prompted court‑appointed counsel and an investigator to seek her removal. The trial court suspended Yen, installed CSC Fiduciaries, Inc. (CSC) as successor conservator, and froze Dong’s settlement accounts. CSC then petitioned for approval of a personal‑injury compromise; Yen objected, demanding that the settlement be split between two annuities, a blocked account, and reimbursement of her GAL fees. The trial court approved the compromise, deposited the funds in an interest‑bearing account under CSC’s control, removed Yen as GAL, and dismissed the action with prejudice. Yen appealed.
Key issues – (1) Whether the trial court was required to follow the GAL’s allocation proposal for the settlement proceeds; (2) Whether the court abused its discretion by refusing to order annuities or a blocked account; (3) Whether the GAL’s removal ex parte violated due‑process requirements; and (4) Whether the GAL is statutorily entitled to reimbursement of reasonable expenses.
Court’s analysis
Authority over settlement funds – The appellate court emphasized that a GAL’s statutory mandate is limited to litigating or defending a claim (Code Civ. Proc. § 372(a)(3)), not to manage post‑settlement assets. Once a conservator of the estate is appointed, the conservator—not the GAL—exercises exclusive fiduciary control under Probate Code § 3602(b). Accordingly, the trial court was under no duty to defer to Yen’s allocation scheme.
Discretion on annuities and blocked accounts – Probate Code § 3602(c)(1) permits, but does not compel, a court to order a single‑premium deferred annuity or a blocked account “for good cause.” The appellate court applied the abuse‑of‑discretion standard (Cahill v. San Diego Gas & Electric Co.) and found the trial court’s rationale—concerns about management costs, potential complications of transferring annuity payments to China, and the absence of evidence of mismanagement by CSC—sufficient. No abuse was shown.
Removal of the GAL – The court noted that the Probate Code provides no substantive or procedural rule governing GAL removal (Chui v. Chui). CSC’s ex parte application satisfied the procedural requisites of a declaration, factual basis, and notice. Because Yen’s removal did not prejudice the settlement’s approval and she would have no further role in fund administration, the appellate court deemed any due‑process claim harmless.
Reimbursement of GAL expenses – The pivotal error, according to the court, lay in the trial court’s refusal to apply Probate Code §§ 3600 and 3601, which are incorporated by reference in Code Civ. Proc. § 372. Those sections expressly authorize reimbursement of “reasonable expenses” to a GAL when a compromise is approved. Citing Goldberg v. Superior Court, the court affirmed that the trial court must evaluate the reasonableness of each expense and may allocate reimbursement on a pro‑rata or selective basis. Consequently, the appellate court remanded for a determination of Yen’s allowable fees and expenses, while vacating the trial court’s denial.
Impact and unresolved questions – This decision reinforces the statutory hierarchy that places conservators, not GALs, at the helm of post‑settlement asset management, thereby limiting GALs’ influence beyond litigation. Practitioners should now ensure that any fee‑recovery motion for a GAL is grounded in Probate Code §§ 3600‑3601 and that the request is made through the appropriate conservator‑controlled proceeding. The opinion leaves open how courts will balance “good cause” for annuities versus direct conservator control in future cases, especially where international residency complicates fund disbursement.
Referenced Statutes and Doctrines
- Code of Civil Procedure § 372 (guardian ad litem settlement authority)
- Probate Code §§ 3600, 3601, 3602 (compromise approval, expense reimbursement, annuity/blocked‑account options)
- Probate Code § 2456 (blocked‑account authority)
- Probate Code § 2400(c) (definition of “guardian of the estate”)
- Probate Code § 1820(c) (conflict‑of‑interest prohibition)
- California Rules of Court, rule 8.1115 (publication of opinions)
- Cahill v. San Diego Gas & Electric Co. (abuse‑of‑discretion standard)
- In re Claudia S. (disentitlement doctrine)
- Chui v. Chui (absence of procedural rule for GAL removal)
- Goldberg v. Superior Court (scope of § 3601 reimbursement authority)
- Newsom v. Superior Court (ex parte relief requirements)
- Safai v. Safai (role of GAL after settlement)
- Benach v. County of Los Angeles (waiver of unsubstantiated arguments)