Case Number: A169579_markdown
Court: California Court of Appeal, First Appellate District, Division Three
Date Filed: August 31, 2025
Holding
The court held that the trial court erred in refusing to reimburse the guardian ad litem for reasonable expenses incurred in the underlying personal‑injury action and that the dismissal with prejudice was improper; consequently, the order was reversed and the matter remanded for determination of those fees, while the rest of the judgment was affirmed.
Narrative
The appeal in Yen v. CSC Fiduciaries, Inc. centers on the intersection of conservatorship fiduciary duties, the authority of a guardian ad litem (GAL), and the court’s discretion in allocating settlement proceeds for a severely injured conservatee, You Wei Dong. The decision is noteworthy for California probate practitioners because it clarifies the statutory framework governing GAL reimbursement and underscores the limited role a GAL plays once a conservator of the estate is in place.
Procedural backdrop. Dong suffered a catastrophic brain injury in a 2019 workplace accident. Zehui Li Yen, a longtime friend, was appointed GAL for Dong’s workers’ compensation claim and later for a related personal‑injury suit. In March 2021 Yen secured a petition for conservatorship of the person and estate, and the trial court appointed her as conservator while also assigning counsel for Dong. After a workers’ compensation settlement that included an $80,000 payment to Yen, the conservatorship accounting revealed extensive fees and expenses claimed by Yen—over $800,000 in total, encompassing conservatorship fees, GAL fees, mileage, and caregiver costs.
Concerns about Yen’s dual role as creditor and fiduciary prompted the court‑appointed attorney and a court investigator to recommend her removal. In December 2022 the trial court suspended Yen as conservator and installed CSC Fiduciaries, Inc. (CSC) as successor temporary conservator. Shortly thereafter Yen withdrew roughly $68,000 from the conservatorship account and filed a notice of a proposed change of Dong’s residence to China. CSC responded by freezing the workers’ compensation accounts and seeking approval to settle Dong’s personal‑injury claim.
When CSC filed its petition for approval of compromise, Yen objected, not to the settlement amount, but to the lack of an annuity purchase, the perceived excessiveness of attorney fees, and the omission of any provision for GAL reimbursement. She also moved for approval of her own GAL fees and expenses, seeking more than $315,000 in compensation. CSC, asserting that Yen’s continued involvement was a stalling tactic, filed an ex parte application to remove her as GAL. The trial court granted the settlement, deposited the proceeds in an interest‑bearing account under CSC’s control, removed Yen as GAL, and denied any reimbursement under the Probate Code. The case was dismissed with prejudice, prompting Yen’s appeal.
Issues on appeal. Yen challenged (1) the trial court’s refusal to order the settlement funds be placed in two annuities and a blocked account, (2) her removal as GAL without full due‑process, and (3) the denial of reimbursement for her GAL expenses.
Court’s analysis.
Allocation of settlement proceeds. The appellate court reaffirmed that once a conservator of the estate is appointed, the GAL’s authority is limited to litigation advocacy; the conservator retains exclusive control over post‑settlement fund management. Citing Code of Civil Procedure § 372 and Probate Code §§ 3602(b) and 2456, the court explained that the trial court correctly deferred to CSC, the current conservator, rather than to Yen’s preference for annuities or a blocked account. The court applied the abuse‑of‑discretion standard and found a “reasonable justification” for allowing the funds to remain in CSC’s interest‑bearing account, especially given the lack of evidence that CSC was mismanaging the estate.
Removal of the GAL. The appellate panel held that Yen failed to demonstrate any procedural error or irreparable harm resulting from her removal. The ex parte application satisfied the statutory notice and verification requirements, and the removal did not prejudice Dong because the settlement itself terminated Yen’s litigation role. Consequently, the court found no reversible error.
Reimbursement of GAL expenses. This issue generated the only reversal. The court clarified that while Yen was appointed under Code of Civil Procedure § 372, that provision expressly incorporates Probate Code Chapter 4, beginning with § 3600. Under §§ 3600 and 3601, a court may authorize reimbursement of “reasonable expenses” to a GAL when a settlement is approved for the benefit of a person lacking capacity. The appellate court concluded the trial court misapplied the statutes by refusing to consider any reimbursement at all. Accordingly, the dismissal with prejudice was reversed, and the case was remanded for the trial court to determine the amount of reasonable GAL expenses, excluding attorney fees already addressed.
Impact and unresolved questions. The decision reinforces the statutory demarcation between a GAL’s litigation function and a conservator’s fiduciary control, guiding trial courts to scrutinize any attempt by a GAL to influence post‑settlement fund disposition. It also signals that courts must engage the reimbursement provisions of §§ 3600‑3601 rather than defaulting to a categorical denial. Open questions remain regarding the evidentiary standards for “reasonable” GAL expenses and the procedural safeguards required when a GAL is removed ex parte in a conservatorship context. Practitioners should anticipate heightened scrutiny of fee petitions and ensure that any request for annuity or blocked‑account orders is filed by the conservator pursuant to § 3602(c).
Referenced Statutes and Doctrines
- Code of Civil Procedure § 372 (settlement of actions involving persons lacking capacity)
- Probate Code §§ 3600, 3601 (court approval of compromise and reimbursement of expenses)
- Probate Code § 3602 (disposition of settlement proceeds, annuity and blocked‑account options)
- Probate Code § 2456 (court authority to order blocked accounts)
- Probate Code § 2400(c) (definition of “guardian of the estate”)
- Probate Code § 1820(c) (conflict of interest for a conservator who is a creditor)
Major Cases Cited
- In re Marriage of Caballero (1994) 27 Cal.App.4th 1139
- Goldberg v. Superior Court (1994) 23 Cal.App.4th 1378
- Cahill v. San Diego Gas & Electric Co. (2011) 194 Cal.App.4th 939
- Chui v. Chui (2022) 86 Cal.App.5th 929
- Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836
- Newsom v. Superior Court (2020) 51 Cal.App.5th 1093
- Safai v. Safai (2008) 164 Cal.App.4th 233