Winning Appeal Sets New Standard in Contract Law

LOS ANGELES, Feb. 25, 2021 /PRNewswire/ -- Appellants challenging the removal of a trust manager have prevailed in a first-of-its-kind decision that sets new standards in California contract law.

The defendant successfully asked the Second Appellate District to overturn an order from Los Angeles County Superior Court Judge Gregory W. Alarcon that allowed plaintiff and co-trustee Harry Roussos to hand select a replacement in favor of the proper fund-appointed director. The dispute was between several entities and trusts that invest in residential real estate.

The decision marks a major victory for RMO LLP – counsel to beneficiaries of the trust filing as amicus. RMO Attorney David Greco, amicus' counsel, said the decision blocks the plaintiff's improper attempt to skirt the court system.

"The opposition argued that a years-old contract bound Ted to arbitrate all issues, forever into the future, in front of a specific arbitrator," Greco said. "We're thrilled the panel saw through this deception."

The successful appeal, brought by Harry's brother and co-trustee Theodosios Roussos, seemingly invalidates the newly installed director's actions, which include the selling of properties below market value to the detriment of the business and the beneficiaries of the trusts where the business keeps its profits. The panel found the lower court improperly granted an arbitrator's award favoring the plaintiff and conflicted with state mandatory disqualification provisions. The defendant's request to qualify the arbitrator was timely filed and disclosed.

The case holds that a party may not sign a contract that purports to waive a party's right to challenge an arbitrator before arbitration commences. The opinion—which is the first published opinion to rule on this specific issue—held that such a contract is void because it violates California's public policy of ensuring arbitrator neutrality.

RMO LLP provides personal, cost-effective litigation services to individual and institutional clients. The firm's trust attorneys and probate lawyers focus on beneficiary disputes, contested inheritance rights, disputed creditor claims, breaches of fiduciary duty, will and trust contests, capacity issues, claims of undue influence, financial elder abuse, contested powers of attorney, contested accountings, fraudulent transfers, partition actions, trustee theft, securities and business litigation. RMO has offices in Los Angeles, Orange County, San Diego, Ventura, Miami and Kansas City. For more information, please visit https://rmolawyers.com.

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SOURCE RMO LLP