Browne v. Falk CA1/1

Filed 1/12/23 Browne v. Falk CA1/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FIRST APPELLATE DISTRICT

DIVISION ONE

JOHN BROWNE, Petitioner and Respondent, A163049 v. DANIEL FALK, (Sonoma County Super. Ct. No. SPR-094267) Appellant.

Appellant Daniel Falk is the trustee of a trust, and respondent John Browne is one of the trust’s beneficiaries. The documents governing the trust do not include an arbitration provision, but the main asset of the trust is a company with an operating agreement that does include an arbitration provision. Both Falk and Browne are members of the company. After Browne filed this action in probate court seeking a trust accounting and the removal of Falk as trustee, Falk filed a motion to compel arbitration of the dispute. The trial court denied the motion. It concluded that because Browne’s claims were brought as a beneficiary of the trust, and not as a member of the company, they were not covered by the arbitration provision in the company’s operating agreement. We affirm.

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I. FACTUAL AND PROCEDURAL BACKGROUND Browne worked for a man named Harold Richardson starting around 1978. In 2006, Richardson executed as settlor and trustee the Harold F. Richardson Revocable Trust (“Trust”), later amended in 2011 and 2013. There is no arbitration agreement in the Trust. Richardson placed into the Trust around 8,400 acres of real property in Sonoma County along with the tools, equipment, vehicles and cattle on the property, and the rights to timber associated with the property. The land has been owned and managed by members of the Richardson family for more than 150 years. Then in 2012, Richardson formed the Richardson Ranch LLC (RRLLC or the Ranch) in Nevada and registered it in California as a foreign limited liability company. Its primary business is the sale of timber and timber products on the land owned by the Richardson family. Shortly after the Ranch was registered in Nevada, Richardson executed an operating agreement for it. The operating agreement includes an arbitration clause, which provides in part that “[a]ny action to enforce or interpret this Agreement or to resolve disputes between the Members, or by or against any Member, will be settled by arbitration.” At first, the Trust was the sole member of the Ranch (meaning the Trust owned 100 percent of the company), and appellant Daniel Falk was the manager. At some point Richardson transferred part of the Trust’s membership in the Ranch to its current members: Browne, Falk, Falk’s mother (Richardson’s niece), and Falk’s brother. The Trust currently owns a 79.586 percent membership interest in the Ranch.