Opinion
A098796. A099069. A099464.
11-25-2003
ANNETTE LeROY et al., Plaintiffs and Appellants, v. BOREL PRIVATE BANK & TRUST COMPANY, Defendant and Respondent.
This matter, now in its eighth year of litigation and before us on appeal for a fourth time, involves three consolidated appeals. On remand, the probate court approved a petition by Borel Bank (Borel), trustee of the Andre LeRoy Trust, for the sale of trust property to Union Oil Company of California (Unocal). Appellants, beneficiaries of the trust, contend that the probate courts decision approving the sale is not supported by substantial evidence and that the court improperly denied their motion for a new trial. Following the probate courts decision approving the sale and after Borel filed its notice of appeal, the property was finally sold pursuant to an agreement reached between Borel and Unocal in 2002. We conclude the appeals are moot in view of this sale and remand the matters to the probate court for dismissal.
Now Borel Private Bank.
Appellants are Andres widow Annette LeRoy; his daughter Nicole Vecchioli; and Nicoles five children: Fabrice, Lorenzo, Fiorella, Frederic and Edouard Vecchioli. Annette LeRoy is a 20 % income beneficiary of the trust and Nicole is a 40% income beneficiary. Nicoles five children are 50% remaindermen.
Appellants acknowledge that their third appeal, challenging the probate courts order denying their motion for an injunction, is now moot.
PROCEDURAL HISTORY
We have recounted the factual history extensively in two earlier appeals and do not repeat it at length here. We summarize the procedural background.
In 1994, Borel Bank and Bankers Trust, as trustees of the Andre LeRoy Trust and Eugene LeRoy Trust respectively, entered into negotiations with Unocal to sell a jointly-held-trust property, settle Unocals liability to the trust arising from its contamination of the property and obtain indemnity from Unocal regarding that contamination. Appellants opposed those negotiations and urged Borel to sue Unocal instead. When Borel declined, appellants filed a petition to remove Borel as trustee, charging that Borel violated trust provisions and had a conflict of interest. The probate court denied the petition in January 1995. In Annette LeRoy et. al. v. Borel Bank & Trust Company, etc. (Feb. 14, 1996, A069349) [nonpub. opn.] (LeRoy I), appellants challenged that order.
Now Deutsche Bank.
While LeRoy I was pending, Borel and Bankers Trust reached agreement with Unocal and each trustee filed a separate petition seeking court approval of those agreements (1995 Unocal agreements.) Before the hearing on Borels petition, appellants submitted a counter-offer to purchase the property. The court found that the 1995 Unocal agreements were in the best interests of both trusts, rejected the counter-offer made by appellants, and approved the sale. All beneficiaries and guardians ad litem of both trusts, except for appellants, went on record as supporting the agreements. Appellants appealed from the order pertaining to Borel in In the Matter of Andre LeRoy Trust, No. A072195 (LeRoy II). The probate courts order as to the Eugene Trust, which was not appealed, became final.
In LeRoy I we agreed with the trial court that there was no conflict of interest between the beneficiaries and trustees, but concluded that the trial court had applied the wrong legal standard in determining whether Borel abused its discretionary power under the trust. We reversed and remanded the matter to the trial court, directing it to hold a new hearing, in which it must determine whether the trustee "[w]as acting in that state of mind in which it was contemplated by the settlor that he should act." (LeRoy I, supra, at p. 12, quoting Estate of Miller (1964) 230 Cal.App.2d 888, 908.)
After briefing was completed in LeRoy II, we requested letter briefing on whether the matter should be remanded in light of our decision in LeRoy I. After considering those letter briefs, Presiding Justice Phelan of this court remanded LeRoy II, ordering as follows: "This case is remanded to the trial court for reconsideration of its Order Approving (1) Settlement Agreement and Purchase and Sale Agreement and (2) Proposed Sale of Real Property to Unocal in light of this courts decision in [LeRoy I.]" (LeRoy II, Order, filed October 23, 1996, p. 3.)
Following remand, the trial court consolidated the petitions for removal and approval. Appellants interpreted our remand order as requiring a rehearing on the approval petition and requested that such a rehearing occur before any proceeding on the removal petition. Borel urged that the approval petition need not be reheard. The trial court agreed with Borel, stating: "[I]t seems to me that if the trustee was acting reasonably according to Andres intent, then the sale will be approved; and if it is found that they did not act reasonably and in accordance with Andres intent, then the sale will be set aside." After a hearing on the petition to remove the trustee, the trial court again denied the petition to remove and reaffirmed its earlier order approving the sale and settlement agreements. Appellants appealed both orders in LeRoy et al. v. Borel Bank & Trust Company (Feb. 26, 2001, A086928) [nonpub. opn.] (LeRoy III). We affirmed the courts order denying the petition to remove the trustee. However, we determined that once the trial court denied the petition to remove, it reinstated the order approving the sale and settlement agreements without any analysis of the merits of Borels petition. We remanded the courts order approving the agreements for further proceedings.
In LeRoy III we stated as follows: "[I]n passing upon Borels request for instructions, the trial court was required to consider the trustees limited discretion, as we described it in LeRoy I. [Citation.] Because the first trial courts order preceded our opinion in LeRoy I, this analysis was not undertaken. Nor was this review done by the second trial court following remand. [¶] We remand Borels petition to approve for reconsideration in light of our opinion in LeRoy I and in view of the second trial courts rulings regarding the trustors intent. We are aware that this remand will bring additional delay to the resolution of a dispute that has gone on for years. We do not wish to prolong this conflict any further than necessary. However, remand is necessary to allow appellants meaningful judicial review of the approval order according to the proper standard set out here and in LeRoy I. We are confident that the learned trial court will act on this matter with all reasonable dispatch. [¶] Appellants should be mindful that the second trial court has already determined that the trust instrument does not require Borel to retain a property that is `economically unproductive and poses a serious potential risk to the remainder of the Trust estate, and found that Borel acted within the bounds of reasonable judgment in negotiating the sale of Home Ranch given the conditions and circumstances of the property in 1994. The issues for resolution on remand are narrow. The trial court should first determine whether the items specified in the petition for approval, i.e. the acts and transactions contemplated by the Unocal agreements and the terms of the purchase and sale agreement, are within the bounds of reasonable judgment. Second, if the court makes this determination, it should determine whether the Unocal agreements effectuate the intent of the trustor, in view of the alternative proposal for the purchase of Home Ranch by appellants. The courts reconsideration may be made on the basis of the record already before the first trial court in the matter of Annette LeRoy v. Borel Bank and Trust Co., San Mateo County Superior Court, matter No. [85333]. Appellants point out that the Unocal agreements expired by their terms on May 15, 1998, and that Borel negotiated with Unocal to extend and amend the agreements. Therefore, the court may receive such additional evidence on remand as it may deem necessary or advisable." (LeRoy III, supra, pp. 25-26.)
Borel filed a petition for rehearing seeking clarification of these instructions and specifically asking this Court to delete the last two sentences of this quoted portion of our opinion. Borel argued that these two sentences "may be construed as opening up an entirely new proceeding that would focus on the changed conditions that existed in 1998, when the renewal of the Unocal agreements was negotiated, rather than 1995, when the Approval Petition was filed. Indeed, since the 1998 extension will itself expire by its terms on May 15, 2002, the instructions may be construed as requiring a new proceeding based on changed conditions as they will exist at that time . . . or whatever subsequent time when the agreement may be extended or amended. As proceedings drag on, this consideration of subsequent extensions and amendments arising under changed conditions has the potential to go on ad infinitum." Appellants opposed the proposed modification. On March 27, 2001, we issued an order modifying the opinion by deleting the two sentences requested by Borel. As modified the opinion states: "The courts reconsideration may be made on the basis of the record already before the first trial court in the matter of Annette LeRoy v. Borel Bank and Trust Co., San Mateo County Superior Court, matter No. [85333]."
PROCEEDINGS ON REMANDED APPROVAL ACTION
Following remand, appellants requested that the probate court conduct a case management conference to address certain issues, including "whether a hearing on the Petition is appropriate, following any necessary briefing, either for oral argument, the submission of new evidence, or the presentation of an alternative offer from [appellants] for the purchase of the property . . . ." Instead, pursuant to court order the parties filed simultaneous briefs on the remanded issues. Before submission of their brief, appellants contacted Borel on October 2, 2001, with a new proposal to purchase Home Ranch from the trusts. No action was taken on appellants offer before the court issued its tentative decision on February 4, 2002, approving the 1995 Unocal agreements. Appellants requested a statement of decision. However, on March 19, 2002, the probate court adopted verbatim its tentative decision as its final "Order: Statement of Decision." The statement of decision provided: "Pursuant to the order of the court of appeal . . . , this court has reconsidered Borels petition to approve the trustees sale of the Unocal property and the related settlement agreements. In the course of the reconsideration the court has reviewed and assessed the record on the petition to approve which was before the prior trial court as well as the rulings issued by this court regarding the trustors intent. First, on the basis of said reconsideration the court finds that the acts and transactions contemplated by the Unocal petition for approval and the terms of the purchase and sale agreement are within the bounds of reasonable judgment. Second, the court finds that the Unocal agreements do effectuate the intent of the trustor, in view of the alternative proposal for the Home Ranch by plaintiffs."
On May 13, 2002, appellants appealed yet again. They also moved for a new trial, alleging both procedural and substantive errors.
The 1995 Unocal agreements, as extended in 1998, were due to expire on May 15, 2002. On May 1, 2002, counsel for the appellants, the trusts and Jean LeRoy met to discuss appellants offer to purchase Home Ranch. On May 14, 2002, the trustees executed amended agreements with Unocal entitled "Third Amendment to Settlement Agreement" (2002 Unocal agreements). Among other things, the 2002 agreements increased the cash component of the settlement to more than $13.7 million and no longer required Borel to obtain final court approval as a condition of the sale. Appellants were notified of the 2002 agreements on May 17, 2002 when the trustees issued a joint report. On May 24, 2002, appellants filed a new petition under Probate Code section 17200, alleging that Borel, by executing the 2002 Unocal agreements, committed a breach of trust, abused its discretion, exceed its powers and failed to satisfy its duties as trustee. On the same date, appellants filed a motion for preliminary injunction seeking to prevent Borel from consummating the 2002 agreements with Unocal. The motion for preliminary injunction was heard on June 7, 2002. The court denied the motion and also denied appellants request for a stay pending resolution of an appeal from the order. Additionally, the court denied appellants motion for a new trial, and appellants appealed this order.
This petition has since been amended twice. The operative pleading is now the "second amended petition re the third amendment to settlement agreement and purchase and sale agreement."
On June 7, 2002, appellants filed a notice of appeal from the order denying their motion for an injunction and a petition for a writ of supersedeas in this court. This court entered a temporary stay. After Borel responded to the writ petition, we denied the petition and dissolved the stay. The agreement with Unocal was consummated on July 2, 2002.
We have consolidated the following appeals from: 1) the courts order approving the sale and settlement agreement; 2) the denial of the new trial motion; and 3) the denial of a preliminary injunction. Both parties agree that the third appeal is now moot.
DISCUSSION
In their reply brief, appellants contend for the first time that these consolidated appeals have been made moot by the sale of Home Ranch. In their opening brief, appellants expressed concern that Borel would raise the defense of mootness because escrow has closed and Home Ranch has been sold. Appellants pointed out that they have filed a second amended petition challenging the 2002 Unocal agreements and requesting that the sale be unwound. Appellants argued initially that because the sale of Home Ranch to Unocal may be unwound, this court has discretion to consider all issues on appeal. Appellants also argued, with no elaboration, that "some of the issues raised in this consolidated appeal could affect the outcome of the Second Amended Petition, the merits of which have not yet been decided."
In view of new arguments raised by appellants in their reply brief, we permitted Borel to file a sur-reply. After appellants reply brief was filed, Lorenzo Vecchioli secured separate counsel. At oral argument, Lorenzo contended the appeals are not moot.
In its opposition brief, Borel did not argue that the appeals are moot. On the contrary, it argued that the pending actions in the probate court create a "live controversy" and that our decision on the approval petition will directly affect this "related" litigation.
In their reply brief, appellants assert that the appeals are moot because this court can provide no relief, given that Home Ranch has been sold. Appellants argue that Borel requested approval on the terms set forth in the 1995 sale and settlement agreements and sought instructions to complete the acts and transactions contemplated in those agreements. However, appellants claim that Borel executed new agreements materially different from the original ones and consummated the sale under these new terms. Thus, appellants argue that affirming the approval of the 1995 agreements is meaningless. Appellants now contend, "Thus, even if this Court were to agree with Appellants as to the errors of the court below in approving the 1995 Approval Action, as framed by Borel in their Approval Petition under Probate Code § 17200, a remand would accomplish nothing because the Approval Petition and the agreements on which it was based are no longer relevant. Borel cannot obtain immunity for its now completed acts taken pursuant to the materially changed New Unocal Agreements where its original Approval Petition requested pre-action approval (and immunity) based on sale and settlement agreements that have been superceded. To put it more directly, by its own actions Borel withdrew its 1995 Approval Petition and there is nothing left for this Court (or the Probate Court) to review."
Appellants no longer assert in their reply brief that the sale can be "unwound."
A. 2002 Unocal Agreements and Pending Actions in Probate Court
In discussing whether the consolidated appeals are moot, both parties refer to the 2002 Unocal agreements, which are not before this court. Also referenced are appellants second amended petition and second amended complaint for damages, which are pending in the probate court. In our mootness analysis, we recite, without deciding, the arguments made by both sides regarding the materiality of changes in the Unocal agreements. We also summarize, without resolving, the allegations of the actions pending in the probate court.
Both sides agree that certain terms have changed in the 2002 Unocal agreements: the purchase price has been increased; the description of the parcel of land sold has changed; Unocals payments to the trustees for reimbursement of the trustees past legal fees has increased; a fund to reimburse the trust for legal fees resulting from future litigation by the beneficiaries has been established; and the requirement of court approval has been deleted. Appellants claim that these changes result in materially different terms that significantly alter the original agreement. Borel contends that the only significant change in the agreements is the amount of consideration paid by Unocal. Borel argues, "Such a change does not transform the initial Agreements into something new and different and does not render the 1995 petition moot."
In their second amended petition, appellants assert that Borel breached its fiduciary duty by "voiding the original agreements and abandoning the Approval Action . . . ." Appellants claim that Borel, by signing new agreements that no longer require court approval, failed to comply with trust requirements. Appellants claim Borel further breached its duties by engaging in secret negotiations without consulting appellants as the trust instrument required. Appellants assert that when they learned of the new Unocal agreements, they submitted a new offer with an increased purchase price. They claim that Borel breached its duties by refusing to negotiate with them in a meaningful way. Appellants claim that the 2002 agreements, "do not comport with the trustors intent to keep real property intact as far as possible, and the terms are not objectively reasonable under the circumstances." They contend that the final sale price did not reflect the maximum value for the property, and that their offer was competitive and "more nearly conformed to trustor intent." Appellants assert that Borel breached its duty of loyalty in negotiating a new term in which the trustees legal fees were paid by Unocal. Appellants claim that Unocal should have paid this money to the trust as part of the sale and settlement. However, even if Unocal had done so, appellants claim that the amount would not have compensated the trust for losses it sustained as a result of Unocals pollution of the property. Appellants assert that the trustees did not receive fair compensation for lost royalties. They also rely on an updated valuation by expert Dr. Richard Weinbrandt to assert that Borel violated its duty to make the trust property productive by undervaluing the remaining oil reserves.
In 1996, appellants filed a complaint for damages alleging negligence and breaches of trust, fiduciary duty, and the duty of loyalty. After two demurrers, the current pleading is a second amended complaint filed in August 1997. The matter was administratively consolidated with the removal and approval actions, but stayed pending resolution of the removal and approval petitions. The complaint, filed while the removal and approval actions were pending, generally concerns the mismanagement of Home Ranch. Borel acknowledges that many of the allegations of the second amended complaint, have been disposed of by the removal action. Nevertheless, the complaint claims that Borel agreed to sell the Home Ranch to Unocal for inadequate consideration. Appellants also contend that Borel failed to conduct a thorough investigation of the crude oil reserves remaining in the Guadalupe Oil Field. Appellants further assert that Borel failed "to conduct analyses and consider all factors which Andre LeRoy and Eugene LeRoy would have conducted or considered prior to entering to [sic] the Agreements." Additionally, appellants complain that Borel failed to disclose "the truth regarding the respective liabilities of the Andre Trust, Borel, Bankers Trust and plaintiff Beneficiaries for claims arising out of the contamination of the Home Ranch by Unocal."
In a footnote in their reply brief, appellants state: "Once these consolidated appeals are remanded to the Probate Court, the Vecchioli Family will be faced with a decision regarding what to do with the Damages Action filed in 1997, including, but not limited to, amending it and/or consolidating it with the Second Amended Petition to reflect the events that have occurred since it was filed."
B. Mootness Doctrine and Application
As a general rule, appellate courts will not address the merits of an appeal that has been rendered moot while the appeal is pending. (Eye Dog Foundation v. State Board of Guide Dogs for the Blind (1967) 67 Cal.2d 536, 541 (Eye Dog Foundation).) A case is moot when the decision of the reviewing court "can have no practical impact or provide the parties effectual relief. [Citation.]" (Woodland Park Homeowners Assn. v. Garreks, Inc. (2000) 77 Cal.App.4th 880, 888.) "[T]he duty of this court, as of every other judicial tribunal, is to decide actual controversies by a judgment which can be carried into effect, and not to give opinions upon moot questions or abstract propositions, or to declare principles or rules of law which cannot affect the matter in issue in the case before it. It necessarily follows that when, pending an appeal from the judgment of a lower court, and without any fault of the defendant, an event occurs which renders it impossible for this court, if it should decide the case in favor of plaintiff, to grant him any effectual relief whatever, the court will not proceed to a formal judgment, but will dismiss the appeal." (Consol. etc. v. United A. etc. Workers (1946) 27 Cal.2d 859, 863, quoting Mills v. Green (1895) 159 U.S. 651, 653.) Whether a case has become moot is determined by evaluating the continuing viability of the parties original claims in light of the subsequent event. (Davis v. Superior Court (1985) 169 Cal.App.3d 1054, 1058.)
In determining whether this court can effect relief, we consider the matter before us: the approval petition filed in 1995. Probate Code section 17200, subdivision (a) provides: "Except as provided in Section 15800, a trustee or beneficiary of a trust may petition the court . . . concerning the internal affairs of the trust or to determine the existence of the trust." Proceedings concerning the internal affairs include "[s]ettling the accounts and passing upon the acts of the trustee, including the exercise of discretionary powers" (§ 17200, subd. (b)(5)) and "[i]nstructing the trustee" (§ 17200, subd. (b)(6)). As applicable to the circumstances here, "[w]hen the trustee or trustees attorney anticipates that a beneficiarys objection to the trustees past or proposed actions could lead to a . . . civil suit, the trustee is advised to seek court instructions or approval of an action under [Probate Code] § 17200(b)(6)." (2 Cal. Trust Administration (Cont.Ed.Bar 2d ed.2003), Court Proceedings, § 15.26, p. 927.)
Relying on these subdivisions (5) and (6), Borel requested that probate court: "1. Approv[e] the settlement agreement and purchase and sale agreement, and instruct[] the Trustee to complete all acts and transactions contemplated therein. [¶] 2. Approv[e] the sale of the Guadalupe Oil Field portion of the Home Ranch real property to Unocal on the terms set forth in the purchase and sale agreement." In a parallel procedure, Bankers Trust sought approval on behalf of the Eugene LeRoy Trust.
In its petition for approval, Borel explained why it sought a court order: "Because of (a) the serious nature and extent of the contamination problems at the Home Ranch, (b) the liability exposure to the Andre Trust (both individually and jointly with the Eugene Trust), (c) the joint retention of Folger & Levin, (d) the sensitivity of the negotiations with Unocal concerning possible sale of a portion of the Home Ranch and the opportunity to obtain a comprehensive secured indemnity for the LeRoy Trusts and theirs [sic] beneficiaries, (e) the fact that the Andre Trust owns only an undivided 50% interest in the Home Ranch real property and the Trustees belief that it is in the best interests of the Andre Trust to deal with its undivided interest in concert with the trustee of the Eugene Trust (which holds the other undivided 50% interest), (f) the magnitude of any decision ultimately made with respect to any disposition of the Home Ranch and settlement of claims with respect to the diluent contamination; and (g) the dissent expressed by the Vecchioli Family and Annette LeRoy, the Trustee believes and has consistently maintained the position that any disposition of the Home Ranch and resolution of the diluent contamination problems should be conditioned upon receiving the approval of this Court."
On remand, the probate court approved the 1995 Unocal agreements. The effect of the order was to give Borel the relief it requested: to approve the sale on the terms of the 1995 agreements and to instruct Borel to complete all acts and transactions contemplated in those agreements. However, while appeal of the probate courts order was pending, Borel amended the agreements and sold Home Ranch. Thus, our determination of the sufficiency of the evidence supporting the probate courts order is a futile act. We must be able to decide an actual controversy by a judgment that can be carried into effect. (Consol. etc. Corp. v. United A. etc. Workers, supra, 27 Cal.2d at p. 863.) We cannot do so here. By affirming the courts order, we cannot give Borel the relief it requested pursuant to the 1995 petition. It is meaningless to approve a purchase and sale agreement that was not put into effect. We cannot give instructions to complete a sale that has already been consummated under amended terms. Nor can we provide relief to appellants. Reversal of the probate courts order would have no impact because Home Ranch has been sold. The consolidated appeals are moot.
C. Exception to the Mootness Doctrine
Nevertheless, Borel, relying on one of the discretionary exceptions to the mootness doctrine, argues that the appeals cannot be dismissed because material questions remain to be determined. Borel argues that appellants second amended petition and the amended complaint for damages "involve the same primary rights and the same nexus of facts as the matter now on appeal," and that a decision on the merits of the appeal from the probate courts order will have a significant impact on these two matters.
Borel contends that the Supreme Courts decision in Eye Dog Foundation is on point. In Eye Dog Foundation, supra, the plaintiff corporation, engaged in the training of service dogs, sought a declaratory judgment that statutes concerning these dogs are unconstitutional on their face and as applied to the plaintiff. The plaintiff also sought an injunction prohibiting the defendant, licensing board (board), from enforcing these statutes and interfering with the operation of plaintiffs business. The trial court determined that all the statutes were constitutional. The trial court enjoined the board from enforcing that statute for 120 days. (67 Cal.2d at p. 540.) The board appealed from the portion of the judgment partially invalidating the one statute and the corporation appealed from the remaining portions of the judgment upholding the constitutionality of the others. (Id. at pp. 540-541.)
Several months after entry of judgment, the corporations license was reinstated, mooting the appeal of the injunction. However, the Supreme Court noted that plaintiff also sought a declaratory judgment regarding the constitutionality of the legislation. The court stated that the general rule regarding mootness "becomes subject to the case-recognized qualification that an appeal will not be dismissed where, despite the happening of the subsequent event, there remain material questions for the courts determination. This qualification or exception has been applied to actions for declaratory relief upon the ground that the court must do complete justice once jurisdiction has been assumed [citation], and the relief thus granted may encompass future and contingent legal rights." (Eye Dog Foundation, supra, 67 Cal.2d at p. 541, fn. omitted, italics added.) The court recognized that unless it determined the constitutionality of the statues, these parties and others may face the same issue in the future. The court stated, "[B]oth sides agree that the instant judgment necessarily affects their rights in the future. Thus, if the entire legislation should be stricken down, the defendant board would be powerless to enforce its provisions against plaintiff Foundation or any other entity similarly engaged; plaintiff, in turn, would be deprived of the grace period (120 days) during which it could solicit funds if the validity of section 7210.5, as presently worded, is sustained on appeal." (Id. at p. 542.)
Borel compares its situation to Eye Dog Foundation by arguing: "While a petition seeking approval of a trustees actions does not arise under the statute authorizing declaratory relief actions, it functions in the same way by determining the rights of the parties with respect to an action either contemplated or already taken. In this case, although Borel has already taken action, the rights and liabilities of the parties with respect to that action remain very much in dispute."
The flaw in Borels analysis is that the "action" currently in dispute is the sale of Home Ranch under the 2002 agreements. To effect declaratory relief, a trial court may declare and adjudicate the rights and duties of parties when there is an "actual controversy" relating to those legal rights and duties. (Code. Civ. Proc., § 1060.) In Eye Dog Foundation, the "actual controversy" encompassed future rights because litigation involving the constitutionality of the same statutes was likely to recur. Declaratory relief " `serves to set controversies at rest before they lead to repudiation of obligations, invasion of rights or commission of wrongs; in short, the remedy is to be used in the interests of preventive justice, to declare rights rather than execute them. " (Babb v. Superior Court (1971) 3 Cal.3d 841, 848, quoting Travers v. Louden (1967) 254 Cal.App.2d 926, 931.) By contrast, there is no longer an actual controversy as to legal rights and duties arising under the agreement that was before the probate court in the approval action and is now before us. The pending actions in the probate court concern the 2002 Unocal agreements.
Borel argues that the amendments to the 2002 agreements do not "transform the initial Agreements into something new and different." It is undisputed that the 1995 Unocal agreements were amended and the sale occurred pursuant to the amended agreements. The amended agreements are not before this court. Whether the two agreements are materially different is a factual determination to be made in the trial court. Because no future action will arise under the same agreements that are before us on appeal, there is no basis for declaratory relief. To satisfy the exception to the mootness doctrine, it is not sufficient for Borel to argue that a decision by us on the merits of the appeal "will have a significant bearing" on the matters pending in the probate court. It must appear "that the same controversy between the parties is likely to recur." (Eisenberg, et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2002) [¶] 5:33, p. 5-10, citing Cucamongans United for Reasonable Expansion v. City of Rancho Cucamonga (2000) 82 Cal.App.4th 473, 479-480.)
Borel correctly points out that the pending actions, particularly the second amended petition, raise arguments that have been repeated throughout the eight years of litigation in this matter. For example, appellants argue that the final sale price does not reflect the value of Home Ranch, considering the value of the oil reserves; that the sale terms do not comport with the trustors intent to keep the property intact; that appellants were not adequately consulted during the negotiation with Unocal; and, that appellants offer to buy the property was not properly considered despite the desire of the trustor that the property remain in the family. Also, appellants argue that the valuation of the oil reserves should have been considered in light of Dr. Weinbrandts updated analysis. This is the same argument appellants made in the probate court concerning the 1995 approval action. Nevertheless, while the same fiduciary duties are implicated in the pending probate court matters, the allegations of Borels wrongdoing arise in the context of the negotiation, execution and terms of the 2002 agreements. Thus, the issues presented in the matters pending in the probate court are essentially factual in nature and must be resolved on the basis of those facts. "Because plaintiffs claim is a particularly factual determination that must be resolved on a case-by-case basis, dependent upon the specific facts of a given situation, it is not one on which we would exercise our discretion to address on the merits, despite the fact that it is moot." (Giles v. Horn (2002) 100 Cal.App.4th 206, 228.)
Borel also quotes the court in Viejo Bancorp, Inc. v. Wood (1989) 217 Cal.App.3d 200, 205: "A material question exists when the judgment, if left unreversed, would preclude a party from litigating its liability on an issue still in controversy." Borel states, "This is precisely what the Vecchiolis argued in their opening brief on appeal. [Citation.] They got it right the first time." However, appellants have abandoned this argument and it has no application to Borel. Borel is seeking affirmance of the probate courts decision.
D. Procedure for Dismissal
There remains the question of the proper disposition of the two pending consolidated appeals. In Paul v. Milk Depots, Inc. (1964) 62 Cal.2d 129, the Supreme Court explained that a dismissal is not always the appropriate course of action when an appeal is rendered moot. "Ordinarily, of course, when a case becomes moot pending an appellate decision, `the court will not proceed to a formal judgment, but will dismiss the appeal. [Citation.] But Code of Civil Procedure section 995 declares that . . . `The dismissal of an appeal is in effect an affirmance of the judgment or order appealed from . . . . As we do not reach the merits of the appeal in the case at bench, it is appropriate to avoid thus `impliedly affirming a judgment . . . . Since the basis for that judgment has now disappeared we should `dispose of the case, not merely of the appellate proceeding that brought it here. [Citations.] That result can be achieved by reversing the judgment solely for the purpose of restoring the matter to the jurisdiction of the superior court, with directions to the court to dismiss the proceeding. [Citations.] Such a reversal, of course, does not imply approval of a contrary judgment, but is merely a procedural step necessary to a proper disposition of the this case." (Id. at pp. 134-135, italics added.)
In 1968, Code of Civil Procedure section 995 was repealed. It was replaced with Code of Civil Procedure section 913, which provides: "The dismissal of an appeal shall be with prejudice to the right to file another appeal within the time permitted, unless the dismissal is expressly made without prejudice to another appeal." Despite this change in the statutory language, courts have continued to follow the holding in Paul v. Milk Deposits, Inc. that the dismissal of an appeal on grounds of mootness constitutes an affirmance of the order or judgment appealed from. "[W]here the action itself is moot, and the judgment was therefore improperly rendered below, dismissal of the appeal operates as an affirmance of the judgment . . . , the exact opposite of the reviewing courts intention. The correct order is reversal of the judgment with directions to the lower court to dismiss the action. [Citations.]" (9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, § 654, p. 690, italics omitted; San Bernardino Valley Audubon Society v. Metropolitan Water Dist. (1999) 71 Cal.App.4th 382, 403-404.) This approach disposes of the case, not merely the proceeding that brought it before the appellate court. (Paul v. Milk Deposits, supra, 62 Cal.2d. at p. 34.)
Appellants request that we reverse and remand the matter with directions to the probate court to dismiss the approval action. Appellants argue that to do otherwise would deprive them of review of their procedural arguments.
Appellants contend that the probate court failed to follow proper procedure on remand by: 1) failing to hold an evidentiary hearing; 2) failing to require that the 1995 approval petition be amended to reflect post-1995 events; and 3) requiring the filing of simultaneous briefs, which precluded appellants from responding to Borels submission. Appellants also claim the probate court failed to follow proper post-trial procedures by issuing a statement of decision that lacked explanation of its factual and legal basis. Appellants further contend the probate court issued the statement of decision before they could file objections.
Under the circumstances, the appropriate procedure is to vacate the judgment with directions to the probate court to dismiss the approval action as moot. "Reversal with directions to the trial court to dismiss is the equivalent of dismissal of the appeal, but avoids the ambiguity of the latter procedure which does not dispose of a subsisting trial court judgment in a case wherein the issues are moot." (Bell v. Board of Supervisors (1976) 55 Cal.App.3d 629, 637.)
Appellants concede that because the sale of Home Ranch to Unocal has been consummated the appeal of the denial of the motion for preliminary injunction is now moot. The trustee can no longer be enjoined from selling the property. Nevertheless, appellants, in a footnote, request that this court not dismiss this portion of the appeal as moot, but rather remand the matter back to the probate court for further proceedings. We decline to do so.
In this opinion, we state only that the three consolidated appeals are moot and that reversal of the approval action is the appropriate procedure. We express no opinion on the merit of those appeals. The merits of appellants petition and complaint are for determination solely by the probate court in the first instance.
DISPOSITION
The trial courts judgment is reversed, and the matter is remanded with directions to the trial court to dismiss the approval action as moot. The appeal from the order denying injunctive relief is dismissed as moot. Parties to bear their own costs.
We concur: Parrilli, J., Pollak, J.