client-letter-mediation-preparation.docx

1035-00005 · Marguerite Delp · Correspondence/Client

client-letter-mediation-preparation.docx DOCUMENT M&A / Corporate

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CALDERWOOD & HARKNESS LLP Attorneys at Law 350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Telephone: (213) 555-7200 Facsimile: (213) 555-7201

March 28, 2023

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION

Via Personal Delivery and Electronic Mail

Ms. Marguerite D. Fonseca 1847 Coldwater Canyon Drive Beverly Hills, California 90210

Re: In re Estate of Teodoro R. Fonseca, Los Angeles County Superior Court, Case No. 22STPB09714 Calderwood & Harkness Matter No. 1035-00005 Mediation Preparation — Session Scheduled April 12, 2023

Dear Marguerite,

I. Purpose of This Letter

I am writing to prepare you for the upcoming mediation session that has been scheduled for April 12, 2023. This letter is intended to provide you with a comprehensive overview of the current state of the probate proceedings involving the estate of your late husband, Teodoro R. Fonseca, a thorough analysis of the legal issues in dispute, and a detailed discussion of our approach and strategy for the mediation. I ask that you read this letter carefully and in its entirety, as the information contained herein will be essential to your participation in the mediation process.

The mediation will be held before the Honorable Constance Adler (Ret.) at the Westside Dispute Resolution Center, located at 11400 West Olympic Boulevard, Suite 550, Los Angeles, California 90064. As you may recall, the mediation was ordered pursuant to a stipulation executed by all parties and filed with the Court on March 10, 2023. This stipulation reflected the agreement of all sides to explore whether a negotiated resolution can be reached on all contested issues before the parties incur the additional litigation expenditures that would be associated with depositions, expert discovery, and ultimately a trial on the merits.

The contestants in this proceeding — Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca (Teodoro's three children from his first marriage) — will be represented at the mediation by Damian R. Ortega and Lydia Kwan of Brennan, Ortega & Saldívar LLP. We anticipate that some or all of the contestants will attend the session in person, as is typical in mediations of this nature.

It is important that you understand from the outset that all mediation communications are confidential and are inadmissible in any subsequent court proceedings. This means that proposals, concessions, and statements made during the mediation cannot later be used against you or any other party if the matter does not settle and proceeds to trial. This confidentiality protection is a fundamental feature of mediation under California law and is designed to encourage candid and productive negotiation.

I will attend the mediation as lead counsel on your behalf. Elliot Nguyen, the lead associate assigned to your matter, will also attend in a supporting role. Your personal attendance at the mediation is required, as the mediator will want the opportunity to speak with you directly and because any settlement reached at the mediation would require your personal authorization and, likely, your signature.

II. Summary of the Current Procedural Posture

To ensure that you have a clear and complete understanding of where we stand procedurally, I want to summarize the key events in this case from its inception through the present date.

Your husband, Teodoro R. Fonseca, passed away on September 3, 2022, from cardiac arrest. At the time of his death, Teodoro did not have a valid last will and testament in place. His estate therefore passes under the California laws of intestate succession, which are codified in Probate Code Sections 6400 through 6414. The application of these statutes — and, in particular, how they interact with the characterization of estate assets as community property versus separate property — lies at the heart of the disputes in this case.

On October 5, 2022, we filed a Petition for Letters of Administration on your behalf, seeking your appointment as administrator of the estate. As the surviving spouse, you have priority under the Probate Code for appointment in that role.

On November 14, 2022, the contestants — Rafael, Isabela, and Nicolás — through their counsel at Brennan, Ortega & Saldívar LLP, filed their initial objection to your petition. That objection challenged your appointment as administrator on the grounds that a conflict of interest existed between your interests as surviving spouse and the interests of the estate's other beneficiaries. The objection also raised, for the first time, a dispute over the characterization of certain estate assets, with the contestants contending that significant assets within the estate should be classified as Teodoro's separate property rather than community property.

We filed our Response to Contestants' Initial Objection on December 12, 2022, addressing each of the contestants' arguments in detail and defending your right to serve as administrator and the community property characterization of the disputed assets.

On January 9, 2023, the contestants filed an Amended Objection that introduced a significant new allegation: the claim that a premarital agreement, purportedly dated May 30, 2008 — approximately two weeks before your June 14, 2008 wedding — exists and governs the characterization of property acquired during the marriage. This was the first time any mention of a premarital agreement had been raised in the proceedings, and the contestants produced only a photocopy of a two-page document in support of this claim. I will discuss this alleged premarital agreement in considerable detail below, as it represents one of the most important issues in the case.

We filed our Response to the Amended Objection on February 6, 2023, challenging the authenticity and enforceability of the alleged premarital agreement and reasserting the community property characterization of all disputed assets.

Separately, on January 18, 2023, we filed a Petition for Preliminary Distribution of Non-Probate Assets, specifically seeking judicial confirmation that the $5,000,000 in life insurance proceeds are non-probate assets payable directly to you as the named beneficiary. These proceeds consist of two policies:

• Meridian Mutual Life Insurance Co., Policy No. GH-TL-2019-05582, with a death benefit of $3,000,000; and

• Commonwealth Fidelity Assurance Corp., Policy No. GH-WL-2014-01247, with a death benefit of $2,000,000.

The contestants have not formally contested your entitlement to these life insurance proceeds, and we expect the petition to be granted without objection. These funds pass outside of probate and are payable to you directly as the named beneficiary on each policy.

Most recently, on March 22, 2023, a Stipulation for Appointment of a Neutral Administrator was filed with the Court. The stipulation provides for the appointment of Ashford Fiduciary Services Inc. — with Gerald Whitmore serving as the principal officer and point of contact — to act as a neutral, independent administrator of the estate during the pendency of the litigation. The agreed-upon compensation for Ashford Fiduciary Services is a monthly administration fee of $8,500 plus 0.15% of assets under administration per annum. These costs are to be shared equally between the parties, meaning that your share of the monthly administration fee is $4,250 per month, plus your proportionate share of the annual asset-based fee. While these costs are not insubstantial, the appointment of a neutral administrator was a practical necessity given the contestants' objection to your serving in that role, and it helps ensure that estate assets are being preserved and properly managed during the litigation.

III. Overview of Estate Assets and Competing Characterizations

The disputes in this case center primarily on two related questions: (1) the value of the estate's assets, and (2) whether those assets should be characterized as community property or as Teodoro's separate property. I want to walk you through each major asset category, our position on characterization, and the contestants' competing position.

A. Total Probate Estate Value

Based on the preliminary valuations performed by our retained appraiser, Pinnacle West Appraisal Group LLC (with Dr. Sandra Fujimoto, ASA, CVA serving as the lead appraiser), we estimate the total probate estate to be valued at approximately $71,112,000. This figure encompasses all assets that pass through the probate estate, including real property, business interests, financial accounts, intellectual property, and personal property.

The contestants, relying on valuations prepared by their retained appraiser, Hargrove & Linden Appraisals Inc. (with Morton Linden, CFA, ASA serving as the lead appraiser), have set forth a competing estimate of the total probate estate at approximately $68,750,000. The difference between the two estimates — approximately $2,362,000 — reflects differing methodologies and assumptions applied to certain asset categories, which I will discuss in more detail below.

In addition to the probate estate, there are non-probate assets consisting of the $5,000,000 in life insurance proceeds described above. These are not contested and are payable directly to you as the named beneficiary. They are not part of the probate estate and are not subject to the characterization disputes.

B. Asset-by-Asset Summary and Characterization Disputes

The following is a detailed summary of each significant asset within the probate estate, our position on characterization, and the contestants' competing position.

1. Beverly Hills Residence — 1847 Coldwater Canyon Drive, Beverly Hills, CA 90210

The family residence in Beverly Hills has been appraised by Pinnacle West at a fair market value of $8,450,000. This is the property where you currently reside, and it was acquired during the marriage.

Our position: This property is community property in its entirety. It was purchased during the marriage using community funds, title was taken in both your and Teodoro's names, and there is no credible basis for claiming any separate property interest.

Contestants' position: The contestants contend that the Beverly Hills residence is partially separate property, alleging that the down payment was made using pre-marital funds belonging to Teodoro. We have demanded documentation supporting this claim, and the contestants have not produced any bank records, wire transfer confirmations, or other financial records establishing a traceable separate property contribution to the down payment. We believe this claim will not withstand scrutiny.

2. Malibu Beach House — 27100 Pacific Coast Highway, Malibu, CA 90265

The Malibu property has been appraised by Pinnacle West at a fair market value of $6,200,000. This property was purchased on August 22, 2007, for $4,750,000 — approximately ten months before your June 14, 2008 marriage. It is therefore the one property in the estate that was indisputably acquired, at least initially, as Teodoro's separate property. However, substantial community property contributions were made to this property during the marriage, which give rise to a significant community property interest under California law.

Our position: The community has a substantial interest in this property under the Moore/Marsden analysis. Specifically, during the marriage, the community contributed approximately $1,800,000 toward a comprehensive renovation of the property that was completed in 2016. In addition, mortgage payments totaling approximately $2,016,400 were made from joint bank accounts during the marriage. This figure is based on approximately 142 monthly payments at approximately $14,200 per month, made from June 2008 (the month of the marriage) through the mortgage payoff in March 2020. The total community contributions are therefore approximately $3,816,400. When this amount is divided by the current fair market value of $6,200,000, the community property interest is approximately 61.6% of the total value of the property, representing a community interest of approximately $3,819,200.

Contestants' position: The contestants contend that the Malibu Beach House is entirely Teodoro's separate property because it was purchased before the marriage. They have not, in any of their filings to date, addressed or acknowledged the community contributions made during the marriage. We expect them to contest the Moore/Marsden calculation at mediation, but the bank records and renovation invoices strongly support our analysis.

3. Lumiére Canyon Studios LLC — Decedent's 50% Membership Interest

Lumiére Canyon Studios LLC is a media production company that was co-founded by you and Teodoro. The LLC was formed on March 18, 2009, during the marriage, and the operating agreement dated March 18, 2009 establishes a 50/50 membership interest between you and Teodoro. As of the most recent internal valuation dated December 31, 2021, the enterprise value of Lumiére Canyon Studios LLC was $31,600,000. Teodoro's 50% membership interest is therefore valued at approximately $15,800,000.

Our position: Teodoro's 50% membership interest in Lumiére Canyon Studios LLC is community property. The LLC was formed during the marriage, both spouses were co-founders with equal membership interests as documented in the operating agreement, and the business was built through the joint efforts of both spouses during the marriage. The community property characterization of this asset is, in our view, extremely strong.

Contestants' position: The contestants contend that Lumiére Canyon Studios LLC is separate property, alleging that it was funded substantially with pre-marital capital that Teodoro derived from media assets he held prior to the marriage. This argument requires the contestants to establish a clear and unbroken tracing chain from the pre-marital funds to the initial capitalization of the LLC — a burden they have not yet met and that we believe they will have great difficulty meeting given that the operating agreement reflects 50/50 ownership and that the LLC was formed during the marriage with both spouses as active participants.

4. Pacific Rim Narrative Partners LLC — Decedent's 35% Membership Interest

Pacific Rim Narrative Partners LLC ("PRNP") is a media investment fund with approximately $78,500,000 in assets under management. Teodoro held a 35% membership interest in PRNP, which our appraiser has preliminarily valued at $27,475,000. PRNP was formed in 2015, during the marriage, and the managing member of the fund is Victor Sandoval.

Our position: Teodoro's 35% membership interest in PRNP is community property. The LLC was formed during the marriage, and Teodoro's investment in and commitment of time to the fund constituted community efforts and the expenditure of community resources.

Contestants' position: The contestants contend that PRNP is separate property, alleging that the investment was made with separate property funds. As with the Lumiére Canyon claim, the contestants bear the burden of tracing the source of funds, and we believe the community property presumption will prevail in the absence of credible tracing evidence.

5. Veltara Basin Bank, N.A. Accounts

The estate includes three accounts held at Veltara Basin Bank, N.A., with the following approximate balances as of the date of death:

Our position: All three accounts are community property. The accounts were maintained during the marriage, funded with community earnings, and used for community purposes.

Contestants' position: The contestants concede that the personal checking account (ending -3091) is community property but contend that the brokerage account (ending -4782) and the money market account (ending -6155) are mixed or partially separate property, suggesting that separate property funds were commingled into these accounts. Again, the burden of tracing rests with the contestants, and the account statements and transaction histories from Veltara Basin Bank reflect a pattern of community income deposits that is inconsistent with the contestants' characterization.

6. Intellectual Property Portfolio

The estate includes interests in an extensive intellectual property portfolio consisting of fourteen (14) feature films and six (6) television series, from which the estate receives ongoing royalty streams and residual payments. Pinnacle West has conducted a preliminary analysis of the net present value of these income streams and has valued the IP portfolio at approximately $4,600,000 NPV.

Our position: The IP portfolio is community property. The creative works that generate these income streams were produced during the marriage, and the associated royalty and residual rights were acquired as a result of community efforts.

Contestants' position: The contestants contend that the IP portfolio is partially separate property, alleging that some of the intellectual property originated before the marriage or was created through efforts that should be attributed to Teodoro's separate property. This argument will require the contestants to identify specific works and establish that they were created before the marriage or with separate property resources — a burden we believe they will struggle to meet, particularly for works that were produced or substantially developed during the fourteen-year marriage.

7. Personal Property

The estate also includes personal property consisting of art, vehicles, and furnishings with an aggregate estimated value of approximately $1,250,000. Both sides agree that this personal property is community property, and it is not a source of dispute.

C. Isabela's Promissory Note Claim

In addition to the characterization disputes described above, the contestants have raised two individual claims against the estate. The first of these is asserted by Isabela C. Fonseca-Greer.

Isabela claims that the decedent executed a promissory note dated January 15, 2020, in the principal amount of $1,200,000, payable to Amber Light Documentary Films LLC — an entity in which Isabela holds a controlling interest. The promissory note purportedly bears an annual interest rate of 3.5% and a maturity date of January 15, 2025. As of the date of Teodoro's death on September 3, 2022, the claim with accrued interest totals approximately $1,310,460, calculated as follows: $1,200,000 in principal plus approximately $110,460 in interest at 3.5% per annum over the approximately 2.63 years between issuance and the date of death.

Our position: The transfer of funds from Teodoro to Amber Light Documentary Films LLC was a gift, not a loan. No repayment was ever demanded by Isabela or Amber Light. No payments of principal or interest were ever made by Teodoro or received by the purported lender. The circumstances surrounding the transfer — including the father-daughter relationship, the absence of any repayment history, and the lack of any commercial purpose for the supposed loan — are inconsistent with a bona fide arm's-length lending arrangement and are instead consistent with a donative transfer. The promissory note, if it exists in the form described by Isabela, lacks the indicia of a genuine debt obligation and should not be recognized as a valid creditor claim against the estate.

We expect the contestants to press this claim vigorously at mediation, seeking to have the estate pay the full $1,310,460 as a creditor claim that would take priority over distributions to beneficiaries. This is a significant claim, and we are prepared to challenge it.

D. Nicolás's Educational Expense Claim

The second individual claim is asserted by Nicolás R. Fonseca. Nicolás claims reimbursement of $387,500 in educational expenses based on an alleged oral promise by the decedent to cover tuition and living expenses for Nicolás's graduate study. The alleged promise purportedly covered the period from 2021 through the anticipated completion of Nicolás's program in 2024.

Our position: This claim is barred by the California Statute of Frauds (Civil Code § 1624). An agreement that by its terms cannot be performed within one year from the date of making — as an agreement to fund educational expenses through 2024 could not have been — must be in writing to be enforceable. Nicolás has produced no written evidence of this promise. There is no letter, email, text message, or other writing in which Teodoro memorialized the alleged commitment.

Nicolás may attempt to invoke the doctrine of promissory estoppel or partial performance to avoid the Statute of Frauds defense, but these arguments are inherently weak in this context. Promissory estoppel requires clear and unambiguous evidence of a definite promise, reasonable and foreseeable reliance, and injury resulting from the reliance. Proving an oral agreement against a decedent's estate is notoriously difficult because the decedent is obviously unavailable to confirm or deny the alleged promise, and courts are rightly skeptical of uncorroborated claims of oral promises made by deceased persons.

IV. Strengths of Our Position

Having reviewed the assets, characterization disputes, and individual claims, I want to highlight the key legal strengths of our position as we enter the mediation.

A. Surviving Spouse's Statutory Rights Under Intestacy

The legal framework governing this estate is extremely favorable to your interests. Under the California intestate succession statutes, specifically Probate Code Sections 6400 through 6414, you are entitled as the surviving spouse to one hundred percent (100%) of the decedent's share of community property under Section 6401. This means that if the estate's major assets are properly characterized as community property — as we contend they should be — you inherit Teodoro's entire community property share, and the contestants (his children from his prior marriage) receive nothing from community assets under the intestacy statutes.

The contestants' inheritance rights arise only with respect to Teodoro's separate property. Under Section 6402, if the decedent is survived by more than one child (or issue of a deceased child), the surviving spouse receives only one-third of the decedent's separate property estate. The remainder would pass to the children in equal shares. This is why the characterization dispute is so central to this case: the difference between community property and separate property is, quite literally, the difference between your receiving 100% of the decedent's share and your receiving only one-third.

The practical consequence of this legal framework is that the contestants have a powerful incentive to reclassify as much of the estate as possible from community property to separate property. Conversely, every asset that we successfully defend as community property reduces the pool of assets available for distribution to the contestants. This dynamic will shape the mediation negotiations and is a fundamental advantage in our position.

B. The Premarital Agreement Is Likely Unenforceable

One of the most critical issues in this case is the contestants' claim that a premarital agreement exists and governs the characterization of property acquired during the marriage. As I mentioned earlier, the contestants produced only a photocopy of a two-page document purportedly dated May 30, 2008 — approximately two weeks before your June 14, 2008 wedding.

There are several significant problems with this alleged premarital agreement that, in our assessment, render it likely unenforceable:

First, the photocopy bears what appears to be Teodoro's signature on the first page, but it lacks your signature on the second page. You have consistently and unequivocally denied ever executing this agreement, and the absence of your signature on the produced document is consistent with your denial.

Second, we retained Dr. Elaine Prescott of Brindoval Forensic Document Services LLC (located at 921 North La Brea Avenue, Suite 200, Los Angeles, California 90038) to conduct a forensic examination of the photocopy. Dr. Prescott issued a preliminary report dated February 22, 2023, in which she concluded that the photocopy shows signs of alteration and that the absence of the second-page signature is consistent with an incomplete or draft document — that is, a document that was never finalized or executed. This forensic evidence significantly undermines the contestants' claim.

Third, under the California Family Code Sections 1610 through 1617 (the Uniform Premarital Agreement Act as adopted in California), a premarital agreement must satisfy several mandatory requirements to be enforceable:

(a) The agreement must be in writing and signed by both parties;

(b) The agreement must have been entered into voluntarily — that is, without coercion, duress, or undue influence;

(c) There must have been adequate financial disclosure by both parties prior to execution, or an express waiver of such disclosure; and

(d) The party against whom enforcement is sought must have had access to independent legal counsel or must have expressly waived the right to independent counsel with at least seven calendar days' notice before the signing date.

The photocopy produced by the contestants fails even the most basic of these requirements — it does not bear both parties' signatures. Moreover, there is no evidence that you were provided independent legal counsel, that adequate financial disclosures were exchanged, or that the agreement was entered into voluntarily. The contestants bear the burden of establishing each of these elements, and they cannot do so based on the evidence currently available.

Fourth, we issued a demand letter dated December 1, 2022, to Brennan, Ortega & Saldívar LLP, specifically requesting the production of the original premarital agreement. To date, no original has been produced. The failure to produce an original, despite a specific demand and ample time to locate and produce it, raises serious questions about whether an executed original ever existed. Without an authenticated original bearing both parties' signatures, the agreement is, in our assessment, unenforceable.

C. Community Property Presumption Favors Us

California law establishes a strong presumption that all assets acquired during the marriage are community property. This presumption is codified in Family Code Section 760, which provides that all property acquired by either spouse during the marriage is community property, except as otherwise provided by statute. The burden of overcoming this presumption falls on the party asserting a separate property interest — in this case, the contestants.

This presumption operates powerfully in our favor with respect to the major assets in dispute:

• Lumiére Canyon Studios LLC was formed on March 18, 2009, squarely during the marriage. Both you and Teodoro were co-founders, and the operating agreement explicitly establishes 50/50 membership. The community property presumption applies with full force.

• Pacific Rim Narrative Partners LLC was formed in 2015, also during the marriage. The investment was made and the membership interest acquired during the marital period.

• The Veltara Basin Bank accounts were maintained and funded during the marriage, and the deposits reflect community income.

• The IP portfolio was developed through creative efforts undertaken during the marriage.

To overcome this presumption, the contestants must present clear and convincing tracing evidence establishing that each disputed asset was acquired with identifiable separate property funds. General allegations of pre-marital capital are insufficient — the contestants must trace specific dollars from a specific separate property source to the specific acquisition. This is a heavy burden, and we believe the contestants will not be able to meet it.

With respect to the Malibu Beach House, which was admittedly purchased before the marriage, the community property analysis takes a different form. Under the Moore/Marsden line of cases, when community funds are used to pay down the mortgage or improve a separate property asset during the marriage, the community acquires a pro rata interest in the property. As detailed above, the community contributed approximately $3,816,400 toward this property during the marriage — through mortgage payments and renovations — supporting a community interest of approximately 61.6% of the property's current fair market value. The Moore/Marsden analysis is well-established in California law and provides a clear and principled basis for our claim.

D. Contestants' Individual Claims Are Weak

As discussed in Section III above, both of the individual claims asserted by the contestants are legally vulnerable.

Isabela's promissory note claim ($1,310,460) lacks the hallmarks of a genuine arm's-length lending arrangement. The absence of any repayment demands, the absence of any payments of principal or interest, and the familial context of the transfer all point toward a donative rather than contractual purpose. We are confident that this claim can be successfully challenged if it proceeds to adjudication, and we intend to use that confidence as leverage in the mediation.

Nicolás's educational expense claim ($387,500) faces insurmountable statutory and evidentiary barriers. The Statute of Frauds requires a writing, and no writing exists. Equitable doctrines such as promissory estoppel cannot easily be invoked to circumvent the Statute of Frauds in a probate context where the alleged promisor is deceased and cannot be examined, and where there is no corroborating documentary evidence.

V. Anticipated Arguments from Contestants at Mediation

To ensure that you are not surprised by anything that may be raised at the mediation, I want to preview the arguments that we expect the contestants and their counsel to advance.

A. Premarital Agreement

The contestants will almost certainly continue to argue that the photocopy they produced constitutes evidence of a valid, executed premarital agreement that governs the characterization of assets acquired during the marriage. They may attempt to present the document as a complete and authentic agreement notwithstanding the absence of your signature.

We also anticipate that the contestants will rely on the declaration of Claudette Marchetti — Teodoro's first wife, who resides at 3200 Laurel Terrace, Pasadena, California 91101 — in support of their position. Ms. Marchetti's declaration asserts that a premarital agreement existed and further contends that certain media assets in the estate originated during Teodoro's first marriage and should be treated as his separate property. The evidentiary weight of Ms. Marchetti's declaration is questionable, as she was not a party to the alleged premarital agreement between you and Teodoro, and her testimony about the origins of specific assets is of limited probative value on the community versus separate property characterization question.

The contestants may also argue that the original of the premarital agreement was lost or destroyed and that, under the California secondary evidence rules (Evidence Code Sections 1500 through 1553), the photocopy should be admitted as secondary evidence of the agreement's contents. However, even under the secondary evidence rules, the proponent of the evidence must establish the authenticity of the document — that is, that the photocopy is a true and accurate representation of an original that once existed and was duly executed. Given the forensic evidence of alteration identified by Dr. Prescott, the absence of your signature, your denial of ever executing the document, and the contestants' failure to produce an original despite our demand, we believe this argument will fail.

Our response at mediation: We will present Dr. Prescott's preliminary forensic document report and emphasize the fundamental deficiencies in the alleged premarital agreement. We will make clear that any attempt to rely on this document at trial would face a vigorous authenticity challenge, and that the contestants bear the burden of establishing the validity and enforceability of the agreement under Family Code Sections 1610 through 1617 — a burden they are unlikely to meet.

B. Separate Property Characterization of Key Assets

Beyond the premarital agreement, the contestants will advance asset-specific arguments in support of their separate property characterization claims.

With respect to Lumiére Canyon Studios LLC, the contestants will argue that the LLC was funded substantially with pre-marital capital that Teodoro derived from media assets he held before the marriage. They may attempt to present financial records or testimony suggesting that Teodoro's initial capital contribution to the LLC came from accounts that contained pre-marital funds.

With respect to Pacific Rim Narrative Partners LLC, the contestants will advance a similar argument, contending that Teodoro's investment in PRNP was made with separate property funds that can be traced to pre-marital sources.

With respect to the Malibu Beach House, the contestants will argue that the property is entirely separate because it was purchased before the marriage. They may downplay or challenge the community contributions, either by disputing the amounts or by arguing that the community was adequately compensated through the use and enjoyment of the property during the marriage — an argument that has no support in the Moore/Marsden case law.

Our response at mediation: We will reiterate that the community property presumption applies to all assets acquired during the marriage; that the contestants bear the burden of tracing any alleged separate property source and overcoming the presumption by clear and convincing evidence; that the Lumiére Canyon operating agreement confirms 50/50 ownership by both spouses and was executed during the marriage; and that the community contributions to the Malibu property totaling $3,816,400 create a substantial community interest that cannot be ignored.

C. Competing Valuations

We expect that Hargrove & Linden Appraisals Inc. will present valuations that are lower than those prepared by Pinnacle West. As noted above, the overall gap between our valuation of the probate estate ($71,112,000) and the contestants' valuation ($68,750,000) is approximately $2,362,000. While this gap is significant in absolute terms, it is relatively modest as a percentage of the total estate value (approximately 3.3%).

The specific areas where we expect the most divergence between the two appraisers include the IP portfolio valuation (where different discount rates, royalty projections, and residual income assumptions can produce materially different net present value calculations) and the PRNP membership interest valuation (where the illiquidity discount and the minority interest discount applied to a 35% non-managing membership interest can vary significantly depending on the appraiser's methodology).

These valuation differences may become a negotiation point at mediation, and we should be prepared to discuss them. However, they are secondary to the characterization disputes, which have a far greater impact on the overall outcome.

D. Isabela's and Nicolás's Individual Claims

At mediation, Isabela will push the promissory note claim ($1,310,460) as a creditor claim against the estate. If characterized as a valid debt obligation, a creditor claim would be entitled to payment before any distributions are made to beneficiaries. This could reduce the assets available for distribution to you and the other beneficiaries. We expect Isabela to present the promissory note, any supporting correspondence, and testimony regarding the circumstances of the alleged loan.

Nicolás will assert equitable grounds — including promissory estoppel and partial performance — for his $387,500 educational expense claim. He may present evidence of his enrollment in a graduate program, his reliance on his father's alleged promise, and the expenses he has incurred. Attorney Ortega may use the claimed amounts as additional bargaining leverage in the settlement negotiations.

We anticipate that Damian Ortega may use these individual claims strategically — not necessarily because they are strong claims on the merits, but because their inclusion in the mediation increases the overall size of the contestants' demand and creates additional settlement pressure. We should be prepared for this tactic and should not allow these claims to distort the mediation dynamic.

VI. Key Documents and Evidence for Mediation

In preparation for the mediation, we will assemble a comprehensive document binder that includes the following key materials:

1. Dr. Elaine Prescott's Preliminary Forensic Document Report, dated February 22, 2023, prepared by Brindoval Forensic Document Services LLC — demonstrating signs of alteration in the alleged premarital agreement photocopy and concluding that the document is consistent with an incomplete or draft document.

2. Pinnacle West Appraisal Group LLC Preliminary Valuation Findings — supporting our asset valuations for Lumiére Canyon Studios LLC ($31,600,000 enterprise value / $15,800,000 for the 50% interest), PRNP ($27,475,000 for the 35% interest), the IP portfolio ($4,600,000 NPV), the Beverly Hills residence ($8,450,000), and the Malibu Beach House ($6,200,000).

3. Lumiére Canyon Studios LLC Operating Agreement, dated March 18, 2009, confirming the 50/50 membership interest structure between you and Teodoro.

4. California Secretary of State filings for the relevant LLCs, including Lumiére Canyon Studios LLC (Filing No. 200906410337), Pacific Rim Narrative Partners LLC (Filing No. 201518720492), and Amber Light Documentary Films LLC (Filing No. 201912360185).

5. Veltara Basin Bank, N.A. account statements and transaction histories for the brokerage account (ending -4782), personal checking account (ending -3091), and money market account (ending -6155), demonstrating community property deposits and the community character of the account funds.

6. Coastline Title & Escrow Co. records for both the Beverly Hills residence and the Malibu Beach House. The contact at Coastline Title is Andrea Solis, and their offices are located at 9401 Wilshire Boulevard, Suite 720, Beverly Hills, California 90212.

7. Malibu renovation records and mortgage payment history, establishing the community contributions of approximately $1,800,000 in renovation costs and approximately $2,016,400 in mortgage payments, for a total community contribution of approximately $3,816,400.

8. Marriage certificate reflecting your marriage to Teodoro R. Fonseca on June 14, 2008, in Los Angeles County, California.

9. Our demand letter dated December 1, 2022, addressed to Brennan, Ortega & Saldívar LLP, requesting production of the original premarital agreement — to which no original has been produced to date.

10. Ridgeway Accounting Partners LLP preliminary estate inventory and financial reconciliation materials, prepared under the supervision of Dennis Chua, CPA, providing a comprehensive accounting of estate assets, liabilities, and income as of the most recent reporting period.

Elliot Nguyen and I will review these materials in advance and ensure that we have indexed copies available for use during the mediation. If, during your review of this letter, you identify any additional documents that you believe would be helpful, please let us know promptly so that we can incorporate them into the binder.

VII. Mediation Strategy and Settlement Parameters

A. Our Approach at Mediation

Our strategy at the mediation will be to open with our strongest position and to make clear from the outset that we approach the mediation from a position of legal and evidentiary strength. Specifically, we intend to:

First, establish that the alleged premarital agreement is unenforceable. We will present the forensic evidence of alteration, emphasize the absence of your signature, and explain the statutory requirements that the contestants cannot satisfy. We want the mediator and, through her, the contestants to understand that reliance on this document as a basis for reclassifying community property is both legally and factually untenable.

Second, demonstrate that all major assets in the estate are community property — either because they were acquired during the marriage (and therefore presumptively community property under Family Code Section 760) or because substantial community contributions were made during the marriage (as in the case of the Malibu property under the Moore/Marsden analysis).

Third, emphasize the legal consequence of a community property characterization: under Probate Code Section 6401, you are entitled to 100% of the decedent's share of community property. If the estate is properly characterized as entirely community property, the contestants receive nothing from community assets under the intestacy statutes. This is a powerful reality check for the other side, and it is important that the mediator appreciate this dynamic.

Fourth, present the forensic document analysis and the supporting documentary evidence to undermine the premarital agreement claim and to bolster our community property tracing for the Malibu property.

You should be prepared for a full-day session. Mediations in cases of this complexity and value typically begin with a joint session in which both sides make opening presentations to the mediator, followed by a series of private caucuses in which the mediator meets separately with each side to discuss the case, explore settlement possibilities, and convey proposals and counterproposals. The mediator, Judge Adler, is an experienced jurist who will be direct and candid in her assessments, and she may at times express views about the strengths and weaknesses of each side's position. I want you to be prepared for the possibility that she may identify areas where our position is strong as well as areas where she perceives potential vulnerability. This is a normal part of the mediation process and should not cause you alarm.

B. Settlement Considerations

While our legal position is strong, and while I believe we have the better of the arguments on both the law and the facts, I want to be candid with you about certain practical realities that bear on the settlement calculus.

Litigation is inherently expensive, unpredictable, and emotionally taxing. The total fees billed to date in this matter are substantial, and a trial on all contested issues — including the validity of the premarital agreement, the characterization of each disputed asset, the individual claims asserted by Isabela and Nicolás, and the competing valuations — could significantly increase those costs. Additionally, trials involve risk. Although we are confident in our position, no outcome is guaranteed, and a trial judge's assessment of the evidence may differ in some respects from our own.

A negotiated settlement may therefore be advisable if it accomplishes your primary objectives. Based on our discussions to date, I understand your core priorities to be:

(a) Preserving your ownership of Lumiére Canyon Studios LLC, the company that you co-founded and that is central to your professional life;

(b) Retaining the Beverly Hills residence as your home;

(d) Resolving all outstanding claims — including Isabela's promissory note claim ($1,310,460) and Nicolás's educational expense claim ($387,500) — on terms that are final and comprehensive.

A settlement that achieves these objectives while making a reasonable payment to the contestants in exchange for a full and final release of all claims may serve your interests better than continued litigation, even if the payment to the contestants exceeds what they would be legally entitled to receive if we prevailed on all issues at trial. The value of certainty, finality, and the avoidance of further legal fees and emotional burden should not be underestimated.

I want to emphasize, however, that this letter provides only a preliminary framework for our settlement approach. The specific settlement parameters — including the range of acceptable settlement amounts, the structure of any payments, and the terms that we would require in a settlement agreement — will be discussed in detail during a separate privileged conversation that I would like to schedule with you prior to the mediation. That conversation will allow us to refine our approach based on your current thinking and to develop a detailed negotiation plan that we can execute at the mediation table.

C. Potential Standstill Agreement

If the mediation does not result in a full settlement of all issues — which is, of course, a possibility — we may recommend entering into a standstill agreement with the contestants. A standstill agreement would toll litigation deadlines (including discovery and motion deadlines) for a specified period of time while preserving the possibility of continued informal settlement discussions.

The principal advantage of a standstill agreement is that it reduces costs during the dormant period. With litigation activity on hold, both sides would avoid the substantial expenses associated with depositions, written discovery, expert witness preparation, and motion practice. At the same time, the agreement would protect your rights by ensuring that no deadlines are inadvertently missed and that neither side is prejudiced by the pause in formal proceedings.

During any standstill period, Ashford Fiduciary Services Inc. would continue to serve as the neutral administrator of the estate, ensuring that estate assets are preserved, managed, and accounted for. The monthly administration costs would continue during this period.

VIII. Logistics for April 12, 2023 Mediation

The following is a summary of the logistical details for the mediation:

Please bring a valid photo identification (driver's license or passport) to the mediation. The dispute resolution center may require identification for building access, and a photo ID may be needed if any documents are executed at the session.

I would ask that you review this letter thoroughly and prepare any questions or concerns that you would like to discuss during a pre-mediation strategy conference that we will schedule during the week of April 3, 2023. During that conference, we will walk through the anticipated flow of the mediation, discuss settlement parameters in detail, prepare you for the types of questions the mediator may ask, and address any issues that you want to raise.

IX. Confidentiality Reminder

I want to underscore a critically important point about the confidentiality of the mediation process. Under California Evidence Code Sections 1115 through 1128, all mediation proceedings are confidential. This means that:

• Nothing said, written, or offered during the mediation may be disclosed to the Court or used in any subsequent court proceedings.

• Settlement proposals, concessions, and counteroffers made during the mediation are confidential and cannot be introduced as evidence at trial.

• The mediator's statements, evaluations, and recommendations — if any — are likewise confidential and may not be disclosed.

• If the mediation does not result in a settlement, the litigation will proceed as if the mediation had never occurred, and no party may refer to what transpired during the mediation session.

This confidentiality protection extends to all participants in the mediation, including counsel, parties, and the mediator. I would ask that you not discuss the substance of the mediation — including any offers, counteroffers, or statements made by any party or the mediator — with anyone outside of the attorney-client relationship. This includes family members, friends, business associates, and any other person who is not part of our legal team. Maintaining strict confidentiality protects your interests and ensures that the mediation process can function as it is intended to.

X. Next Steps

In the period between now and the mediation, the following steps need to be completed:

1. Pre-Mediation Strategy Conference: We will schedule a meeting with you during the week of April 3, 2023, to discuss the mediation in detail, review our settlement parameters, and prepare you for the session. My office will reach out to coordinate a date and time that works with your schedule.

2. Confidential Mediation Brief: Calderwood & Harkness will prepare and submit a comprehensive confidential mediation brief to Hon. Constance Adler (Ret.) by April 5, 2023. This brief will outline our legal positions, summarize the key evidence, and provide the mediator with the context she needs to facilitate productive negotiations. The brief will be submitted on a confidential basis and will not be shared with opposing counsel.

3. Document Binders: We will assemble the final document binders for use at the mediation, incorporating all of the materials described in Section VI above.

4. Confirmation of Availability: Please confirm at your earliest convenience that you are available for the full day on April 12, 2023, beginning at 9:00 a.m. If there are any scheduling conflicts, please let us know immediately so that we can address them.

5. Questions and Concerns: If you have any questions about this letter, the mediation process, or any other aspect of the case, please do not hesitate to contact me or Elliot Nguyen at:

Calderwood & Harkness LLP 350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Telephone: (213) 555-7200

Marguerite, I want to close this letter by expressing my confidence in the strength of your legal position. The community property presumption, the infirmities in the alleged premarital agreement, the supporting documentary evidence, and the weaknesses in the contestants' individual claims all favor our side. While mediation is, by its nature, a process of negotiation and compromise, we enter this mediation with substantial leverage and a clear-eyed understanding of both the strengths and the risks of your case.

Our team — Elliot, Grace Nakamura, and I — has been working diligently to prepare for this session, and we are confident that we will be well-positioned to advocate effectively on your behalf. Whatever the outcome of the mediation, you can be assured that we are prepared for all contingencies and that your interests will be vigorously protected.

I look forward to speaking with you during our pre-mediation conference the week of April 3rd.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Howard Quinn Partner 350 South Grand Avenue, Suite 4800 Los Angeles, California 90071

cc (via internal distribution — Calderwood & Harkness LLP): Patricia Dunmore, Billing Partner Elliot Nguyen, Lead Associate Grace Nakamura, Working Associate

Account	Account Number (last 4)	Approximate Balance
Brokerage Account	-4782	$5,120,000
Personal Checking Account	-3091	$342,000
Money Market Account	-6155	$1,875,000
Total	$7,337,000
Date:	April 12, 2023
Time:	9:00 a.m. (please plan for a full-day session; we may not conclude until the late afternoon or early evening)
Location:	Westside Dispute Resolution Center, 11400 West Olympic Boulevard, Suite 550, Los Angeles, CA 90064
Mediator:	Honorable Constance Adler (Ret.)
Attending for Ms. Fonseca:	Howard Quinn and Elliot Nguyen, Calderwood & Harkness LLP, together with Ms. Fonseca personally
Attending for Contestants:	Damian R. Ortega and Lydia Kwan of Brennan, Ortega & Saldívar LLP; presumably Rafael T. Fonseca, Isabela C. Fonseca-Greer, and potentially Nicolás R. Fonseca

CALDERWOOD & HARKNESS LLP Attorneys at Law 350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Telephone: (213) 555-7200 Facsimile: (213) 555-7201
March 28, 2023
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION
Via Personal Delivery and Electronic Mail
Ms. Marguerite D. Fonseca 1847 Coldwater Canyon Drive Beverly Hills, California 90210
Re: In re Estate of Teodoro R. Fonseca, Los Angeles County Superior Court, Case No. 22STPB09714 Calderwood & Harkness Matter No. 1035-00005 Mediation Preparation — Session Scheduled April 12, 2023
Dear Marguerite,
I. Purpose of This Letter
I am writing to prepare you for the upcoming mediation session that has been scheduled for April 12, 2023. This letter is intended to provide you with a comprehensive overview of the current state of the probate proceedings involving the estate of your late husband, Teodoro R. Fonseca, a thorough analysis of the legal issues in dispute, and a detailed discussion of our approach and strategy for the mediation. I ask that you read this letter carefully and in its entirety, as the information contained herein will be essential to your participation in the mediation process.
The mediation will be held before the Honorable Constance Adler (Ret.) at the Westside Dispute Resolution Center, located at 11400 West Olympic Boulevard, Suite 550, Los Angeles, California 90064. As you may recall, the mediation was ordered pursuant to a stipulation executed by all parties and filed with the Court on March 10, 2023. This stipulation reflected the agreement of all sides to explore whether a negotiated resolution can be reached on all contested issues before the parties incur the additional litigation expenditures that would be associated with depositions, expert discovery, and ultimately a trial on the merits.
The contestants in this proceeding — Rafael T. Fonseca, Isabela C. Fonseca-Greer, and Nicolás R. Fonseca (Teodoro's three children from his first marriage) — will be represented at the mediation by Damian R. Ortega and Lydia Kwan of Brennan, Ortega & Saldívar LLP. We anticipate that some or all of the contestants will attend the session in person, as is typical in mediations of this nature.
It is important that you understand from the outset that all mediation communications are confidential and are inadmissible in any subsequent court proceedings. This means that proposals, concessions, and statements made during the mediation cannot later be used against you or any other party if the matter does not settle and proceeds to trial. This confidentiality protection is a fundamental feature of mediation under California law and is designed to encourage candid and productive negotiation.
I will attend the mediation as lead counsel on your behalf. Elliot Nguyen, the lead associate assigned to your matter, will also attend in a supporting role. Your personal attendance at the mediation is required, as the mediator will want the opportunity to speak with you directly and because any settlement reached at the mediation would require your personal authorization and, likely, your signature.
II. Summary of the Current Procedural Posture
To ensure that you have a clear and complete understanding of where we stand procedurally, I want to summarize the key events in this case from its inception through the present date.
Your husband, Teodoro R. Fonseca, passed away on September 3, 2022, from cardiac arrest. At the time of his death, Teodoro did not have a valid last will and testament in place. His estate therefore passes under the California laws of intestate succession, which are codified in Probate Code Sections 6400 through 6414. The application of these statutes — and, in particular, how they interact with the characterization of estate assets as community property versus separate property — lies at the heart of the disputes in this case.
On October 5, 2022, we filed a Petition for Letters of Administration on your behalf, seeking your appointment as administrator of the estate. As the surviving spouse, you have priority under the Probate Code for appointment in that role.
On November 14, 2022, the contestants — Rafael, Isabela, and Nicolás — through their counsel at Brennan, Ortega & Saldívar LLP, filed their initial objection to your petition. That objection challenged your appointment as administrator on the grounds that a conflict of interest existed between your interests as surviving spouse and the interests of the estate's other beneficiaries. The objection also raised, for the first time, a dispute over the characterization of certain estate assets, with the contestants contending that significant assets within the estate should be classified as Teodoro's separate property rather than community property.
We filed our Response to Contestants' Initial Objection on December 12, 2022, addressing each of the contestants' arguments in detail and defending your right to serve as administrator and the community property characterization of the disputed assets.
On January 9, 2023, the contestants filed an Amended Objection that introduced a significant new allegation: the claim that a premarital agreement, purportedly dated May 30, 2008 — approximately two weeks before your June 14, 2008 wedding — exists and governs the characterization of property acquired during the marriage. This was the first time any mention of a premarital agreement had been raised in the proceedings, and the contestants produced only a photocopy of a two-page document in support of this claim. I will discuss this alleged premarital agreement in considerable detail below, as it represents one of the most important issues in the case.
We filed our Response to the Amended Objection on February 6, 2023, challenging the authenticity and enforceability of the alleged premarital agreement and reasserting the community property characterization of all disputed assets.
Separately, on January 18, 2023, we filed a Petition for Preliminary Distribution of Non-Probate Assets, specifically seeking judicial confirmation that the $5,000,000 in life insurance proceeds are non-probate assets payable directly to you as the named beneficiary. These proceeds consist of two policies:
•  Meridian Mutual Life Insurance Co., Policy No. GH-TL-2019-05582, with a death benefit of $3,000,000; and
•  Commonwealth Fidelity Assurance Corp., Policy No. GH-WL-2014-01247, with a death benefit of $2,000,000.
The contestants have not formally contested your entitlement to these life insurance proceeds, and we expect the petition to be granted without objection. These funds pass outside of probate and are payable to you directly as the named beneficiary on each policy.
Most recently, on March 22, 2023, a Stipulation for Appointment of a Neutral Administrator was filed with the Court. The stipulation provides for the appointment of Ashford Fiduciary Services Inc. — with Gerald Whitmore serving as the principal officer and point of contact — to act as a neutral, independent administrator of the estate during the pendency of the litigation. The agreed-upon compensation for Ashford Fiduciary Services is a monthly administration fee of $8,500 plus 0.15% of assets under administration per annum. These costs are to be shared equally between the parties, meaning that your share of the monthly administration fee is $4,250 per month, plus your proportionate share of the annual asset-based fee. While these costs are not insubstantial, the appointment of a neutral administrator was a practical necessity given the contestants' objection to your serving in that role, and it helps ensure that estate assets are being preserved and properly managed during the litigation.
III. Overview of Estate Assets and Competing Characterizations
The disputes in this case center primarily on two related questions: (1) the value of the estate's assets, and (2) whether those assets should be characterized as community property or as Teodoro's separate property. I want to walk you through each major asset category, our position on characterization, and the contestants' competing position.
A. Total Probate Estate Value
Based on the preliminary valuations performed by our retained appraiser, Pinnacle West Appraisal Group LLC (with Dr. Sandra Fujimoto, ASA, CVA serving as the lead appraiser), we estimate the total probate estate to be valued at approximately $71,112,000. This figure encompasses all assets that pass through the probate estate, including real property, business interests, financial accounts, intellectual property, and personal property.
The contestants, relying on valuations prepared by their retained appraiser, Hargrove & Linden Appraisals Inc. (with Morton Linden, CFA, ASA serving as the lead appraiser), have set forth a competing estimate of the total probate estate at approximately $68,750,000. The difference between the two estimates — approximately $2,362,000 — reflects differing methodologies and assumptions applied to certain asset categories, which I will discuss in more detail below.
In addition to the probate estate, there are non-probate assets consisting of the $5,000,000 in life insurance proceeds described above. These are not contested and are payable directly to you as the named beneficiary. They are not part of the probate estate and are not subject to the characterization disputes.
B. Asset-by-Asset Summary and Characterization Disputes
The following is a detailed summary of each significant asset within the probate estate, our position on characterization, and the contestants' competing position.
1. Beverly Hills Residence — 1847 Coldwater Canyon Drive, Beverly Hills, CA 90210
The family residence in Beverly Hills has been appraised by Pinnacle West at a fair market value of $8,450,000. This is the property where you currently reside, and it was acquired during the marriage.
Our position: This property is community property in its entirety. It was purchased during the marriage using community funds, title was taken in both your and Teodoro's names, and there is no credible basis for claiming any separate property interest.
Contestants' position: The contestants contend that the Beverly Hills residence is partially separate property, alleging that the down payment was made using pre-marital funds belonging to Teodoro. We have demanded documentation supporting this claim, and the contestants have not produced any bank records, wire transfer confirmations, or other financial records establishing a traceable separate property contribution to the down payment. We believe this claim will not withstand scrutiny.
2. Malibu Beach House — 27100 Pacific Coast Highway, Malibu, CA 90265
The Malibu property has been appraised by Pinnacle West at a fair market value of $6,200,000. This property was purchased on August 22, 2007, for $4,750,000 — approximately ten months before your June 14, 2008 marriage. It is therefore the one property in the estate that was indisputably acquired, at least initially, as Teodoro's separate property. However, substantial community property contributions were made to this property during the marriage, which give rise to a significant community property interest under California law.
Our position: The community has a substantial interest in this property under the Moore/Marsden analysis. Specifically, during the marriage, the community contributed approximately $1,800,000 toward a comprehensive renovation of the property that was completed in 2016. In addition, mortgage payments totaling approximately $2,016,400 were made from joint bank accounts during the marriage. This figure is based on approximately 142 monthly payments at approximately $14,200 per month, made from June 2008 (the month of the marriage) through the mortgage payoff in March 2020. The total community contributions are therefore approximately $3,816,400. When this amount is divided by the current fair market value of $6,200,000, the community property interest is approximately 61.6% of the total value of the property, representing a community interest of approximately $3,819,200.
Contestants' position: The contestants contend that the Malibu Beach House is entirely Teodoro's separate property because it was purchased before the marriage. They have not, in any of their filings to date, addressed or acknowledged the community contributions made during the marriage. We expect them to contest the Moore/Marsden calculation at mediation, but the bank records and renovation invoices strongly support our analysis.
3. Lumiére Canyon Studios LLC — Decedent's 50% Membership Interest
Lumiére Canyon Studios LLC is a media production company that was co-founded by you and Teodoro. The LLC was formed on March 18, 2009, during the marriage, and the operating agreement dated March 18, 2009 establishes a 50/50 membership interest between you and Teodoro. As of the most recent internal valuation dated December 31, 2021, the enterprise value of Lumiére Canyon Studios LLC was $31,600,000. Teodoro's 50% membership interest is therefore valued at approximately $15,800,000.
Our position: Teodoro's 50% membership interest in Lumiére Canyon Studios LLC is community property. The LLC was formed during the marriage, both spouses were co-founders with equal membership interests as documented in the operating agreement, and the business was built through the joint efforts of both spouses during the marriage. The community property characterization of this asset is, in our view, extremely strong.
Contestants' position: The contestants contend that Lumiére Canyon Studios LLC is separate property, alleging that it was funded substantially with pre-marital capital that Teodoro derived from media assets he held prior to the marriage. This argument requires the contestants to establish a clear and unbroken tracing chain from the pre-marital funds to the initial capitalization of the LLC — a burden they have not yet met and that we believe they will have great difficulty meeting given that the operating agreement reflects 50/50 ownership and that the LLC was formed during the marriage with both spouses as active participants.
4. Pacific Rim Narrative Partners LLC — Decedent's 35% Membership Interest
Pacific Rim Narrative Partners LLC ("PRNP") is a media investment fund with approximately $78,500,000 in assets under management. Teodoro held a 35% membership interest in PRNP, which our appraiser has preliminarily valued at $27,475,000. PRNP was formed in 2015, during the marriage, and the managing member of the fund is Victor Sandoval.
Our position: Teodoro's 35% membership interest in PRNP is community property. The LLC was formed during the marriage, and Teodoro's investment in and commitment of time to the fund constituted community efforts and the expenditure of community resources.
Contestants' position: The contestants contend that PRNP is separate property, alleging that the investment was made with separate property funds. As with the Lumiére Canyon claim, the contestants bear the burden of tracing the source of funds, and we believe the community property presumption will prevail in the absence of credible tracing evidence.
5. Veltara Basin Bank, N.A. Accounts
The estate includes three accounts held at Veltara Basin Bank, N.A., with the following approximate balances as of the date of death:
Our position: All three accounts are community property. The accounts were maintained during the marriage, funded with community earnings, and used for community purposes.
Contestants' position: The contestants concede that the personal checking account (ending -3091) is community property but contend that the brokerage account (ending -4782) and the money market account (ending -6155) are mixed or partially separate property, suggesting that separate property funds were commingled into these accounts. Again, the burden of tracing rests with the contestants, and the account statements and transaction histories from Veltara Basin Bank reflect a pattern of community income deposits that is inconsistent with the contestants' characterization.
6. Intellectual Property Portfolio
The estate includes interests in an extensive intellectual property portfolio consisting of fourteen (14) feature films and six (6) television series, from which the estate receives ongoing royalty streams and residual payments. Pinnacle West has conducted a preliminary analysis of the net present value of these income streams and has valued the IP portfolio at approximately $4,600,000 NPV.
Our position: The IP portfolio is community property. The creative works that generate these income streams were produced during the marriage, and the associated royalty and residual rights were acquired as a result of community efforts.
Contestants' position: The contestants contend that the IP portfolio is partially separate property, alleging that some of the intellectual property originated before the marriage or was created through efforts that should be attributed to Teodoro's separate property. This argument will require the contestants to identify specific works and establish that they were created before the marriage or with separate property resources — a burden we believe they will struggle to meet, particularly for works that were produced or substantially developed during the fourteen-year marriage.
7. Personal Property
The estate also includes personal property consisting of art, vehicles, and furnishings with an aggregate estimated value of approximately $1,250,000. Both sides agree that this personal property is community property, and it is not a source of dispute.
C. Isabela's Promissory Note Claim
In addition to the characterization disputes described above, the contestants have raised two individual claims against the estate. The first of these is asserted by Isabela C. Fonseca-Greer.
Isabela claims that the decedent executed a promissory note dated January 15, 2020, in the principal amount of $1,200,000, payable to Amber Light Documentary Films LLC — an entity in which Isabela holds a controlling interest. The promissory note purportedly bears an annual interest rate of 3.5% and a maturity date of January 15, 2025. As of the date of Teodoro's death on September 3, 2022, the claim with accrued interest totals approximately $1,310,460, calculated as follows: $1,200,000 in principal plus approximately $110,460 in interest at 3.5% per annum over the approximately 2.63 years between issuance and the date of death.
Our position: The transfer of funds from Teodoro to Amber Light Documentary Films LLC was a gift, not a loan. No repayment was ever demanded by Isabela or Amber Light. No payments of principal or interest were ever made by Teodoro or received by the purported lender. The circumstances surrounding the transfer — including the father-daughter relationship, the absence of any repayment history, and the lack of any commercial purpose for the supposed loan — are inconsistent with a bona fide arm's-length lending arrangement and are instead consistent with a donative transfer. The promissory note, if it exists in the form described by Isabela, lacks the indicia of a genuine debt obligation and should not be recognized as a valid creditor claim against the estate.
We expect the contestants to press this claim vigorously at mediation, seeking to have the estate pay the full $1,310,460 as a creditor claim that would take priority over distributions to beneficiaries. This is a significant claim, and we are prepared to challenge it.
D. Nicolás's Educational Expense Claim
The second individual claim is asserted by Nicolás R. Fonseca. Nicolás claims reimbursement of $387,500 in educational expenses based on an alleged oral promise by the decedent to cover tuition and living expenses for Nicolás's graduate study. The alleged promise purportedly covered the period from 2021 through the anticipated completion of Nicolás's program in 2024.
Our position: This claim is barred by the California Statute of Frauds (Civil Code § 1624). An agreement that by its terms cannot be performed within one year from the date of making — as an agreement to fund educational expenses through 2024 could not have been — must be in writing to be enforceable. Nicolás has produced no written evidence of this promise. There is no letter, email, text message, or other writing in which Teodoro memorialized the alleged commitment.
Nicolás may attempt to invoke the doctrine of promissory estoppel or partial performance to avoid the Statute of Frauds defense, but these arguments are inherently weak in this context. Promissory estoppel requires clear and unambiguous evidence of a definite promise, reasonable and foreseeable reliance, and injury resulting from the reliance. Proving an oral agreement against a decedent's estate is notoriously difficult because the decedent is obviously unavailable to confirm or deny the alleged promise, and courts are rightly skeptical of uncorroborated claims of oral promises made by deceased persons.
IV. Strengths of Our Position
Having reviewed the assets, characterization disputes, and individual claims, I want to highlight the key legal strengths of our position as we enter the mediation.
A. Surviving Spouse's Statutory Rights Under Intestacy
The legal framework governing this estate is extremely favorable to your interests. Under the California intestate succession statutes, specifically Probate Code Sections 6400 through 6414, you are entitled as the surviving spouse to one hundred percent (100%) of the decedent's share of community property under Section 6401. This means that if the estate's major assets are properly characterized as community property — as we contend they should be — you inherit Teodoro's entire community property share, and the contestants (his children from his prior marriage) receive nothing from community assets under the intestacy statutes.
The contestants' inheritance rights arise only with respect to Teodoro's separate property. Under Section 6402, if the decedent is survived by more than one child (or issue of a deceased child), the surviving spouse receives only one-third of the decedent's separate property estate. The remainder would pass to the children in equal shares. This is why the characterization dispute is so central to this case: the difference between community property and separate property is, quite literally, the difference between your receiving 100% of the decedent's share and your receiving only one-third.
The practical consequence of this legal framework is that the contestants have a powerful incentive to reclassify as much of the estate as possible from community property to separate property. Conversely, every asset that we successfully defend as community property reduces the pool of assets available for distribution to the contestants. This dynamic will shape the mediation negotiations and is a fundamental advantage in our position.
B. The Premarital Agreement Is Likely Unenforceable
One of the most critical issues in this case is the contestants' claim that a premarital agreement exists and governs the characterization of property acquired during the marriage. As I mentioned earlier, the contestants produced only a photocopy of a two-page document purportedly dated May 30, 2008 — approximately two weeks before your June 14, 2008 wedding.
There are several significant problems with this alleged premarital agreement that, in our assessment, render it likely unenforceable:
First, the photocopy bears what appears to be Teodoro's signature on the first page, but it lacks your signature on the second page. You have consistently and unequivocally denied ever executing this agreement, and the absence of your signature on the produced document is consistent with your denial.
Second, we retained Dr. Elaine Prescott of Brindoval Forensic Document Services LLC (located at 921 North La Brea Avenue, Suite 200, Los Angeles, California 90038) to conduct a forensic examination of the photocopy. Dr. Prescott issued a preliminary report dated February 22, 2023, in which she concluded that the photocopy shows signs of alteration and that the absence of the second-page signature is consistent with an incomplete or draft document — that is, a document that was never finalized or executed. This forensic evidence significantly undermines the contestants' claim.
Third, under the California Family Code Sections 1610 through 1617 (the Uniform Premarital Agreement Act as adopted in California), a premarital agreement must satisfy several mandatory requirements to be enforceable:
(a) The agreement must be in writing and signed by both parties;
(b) The agreement must have been entered into voluntarily — that is, without coercion, duress, or undue influence;
(c) There must have been adequate financial disclosure by both parties prior to execution, or an express waiver of such disclosure; and
(d) The party against whom enforcement is sought must have had access to independent legal counsel or must have expressly waived the right to independent counsel with at least seven calendar days' notice before the signing date.
The photocopy produced by the contestants fails even the most basic of these requirements — it does not bear both parties' signatures. Moreover, there is no evidence that you were provided independent legal counsel, that adequate financial disclosures were exchanged, or that the agreement was entered into voluntarily. The contestants bear the burden of establishing each of these elements, and they cannot do so based on the evidence currently available.
Fourth, we issued a demand letter dated December 1, 2022, to Brennan, Ortega & Saldívar LLP, specifically requesting the production of the original premarital agreement. To date, no original has been produced. The failure to produce an original, despite a specific demand and ample time to locate and produce it, raises serious questions about whether an executed original ever existed. Without an authenticated original bearing both parties' signatures, the agreement is, in our assessment, unenforceable.
C. Community Property Presumption Favors Us
California law establishes a strong presumption that all assets acquired during the marriage are community property. This presumption is codified in Family Code Section 760, which provides that all property acquired by either spouse during the marriage is community property, except as otherwise provided by statute. The burden of overcoming this presumption falls on the party asserting a separate property interest — in this case, the contestants.
This presumption operates powerfully in our favor with respect to the major assets in dispute:
•  Lumiére Canyon Studios LLC was formed on March 18, 2009, squarely during the marriage. Both you and Teodoro were co-founders, and the operating agreement explicitly establishes 50/50 membership. The community property presumption applies with full force.
•  Pacific Rim Narrative Partners LLC was formed in 2015, also during the marriage. The investment was made and the membership interest acquired during the marital period.
•  The Veltara Basin Bank accounts were maintained and funded during the marriage, and the deposits reflect community income.
•  The IP portfolio was developed through creative efforts undertaken during the marriage.
To overcome this presumption, the contestants must present clear and convincing tracing evidence establishing that each disputed asset was acquired with identifiable separate property funds. General allegations of pre-marital capital are insufficient — the contestants must trace specific dollars from a specific separate property source to the specific acquisition. This is a heavy burden, and we believe the contestants will not be able to meet it.
With respect to the Malibu Beach House, which was admittedly purchased before the marriage, the community property analysis takes a different form. Under the Moore/Marsden line of cases, when community funds are used to pay down the mortgage or improve a separate property asset during the marriage, the community acquires a pro rata interest in the property. As detailed above, the community contributed approximately $3,816,400 toward this property during the marriage — through mortgage payments and renovations — supporting a community interest of approximately 61.6% of the property's current fair market value. The Moore/Marsden analysis is well-established in California law and provides a clear and principled basis for our claim.
D. Contestants' Individual Claims Are Weak
As discussed in Section III above, both of the individual claims asserted by the contestants are legally vulnerable.
Isabela's promissory note claim ($1,310,460) lacks the hallmarks of a genuine arm's-length lending arrangement. The absence of any repayment demands, the absence of any payments of principal or interest, and the familial context of the transfer all point toward a donative rather than contractual purpose. We are confident that this claim can be successfully challenged if it proceeds to adjudication, and we intend to use that confidence as leverage in the mediation.
Nicolás's educational expense claim ($387,500) faces insurmountable statutory and evidentiary barriers. The Statute of Frauds requires a writing, and no writing exists. Equitable doctrines such as promissory estoppel cannot easily be invoked to circumvent the Statute of Frauds in a probate context where the alleged promisor is deceased and cannot be examined, and where there is no corroborating documentary evidence.
V. Anticipated Arguments from Contestants at Mediation
To ensure that you are not surprised by anything that may be raised at the mediation, I want to preview the arguments that we expect the contestants and their counsel to advance.
A. Premarital Agreement
The contestants will almost certainly continue to argue that the photocopy they produced constitutes evidence of a valid, executed premarital agreement that governs the characterization of assets acquired during the marriage. They may attempt to present the document as a complete and authentic agreement notwithstanding the absence of your signature.
We also anticipate that the contestants will rely on the declaration of Claudette Marchetti — Teodoro's first wife, who resides at 3200 Laurel Terrace, Pasadena, California 91101 — in support of their position. Ms. Marchetti's declaration asserts that a premarital agreement existed and further contends that certain media assets in the estate originated during Teodoro's first marriage and should be treated as his separate property. The evidentiary weight of Ms. Marchetti's declaration is questionable, as she was not a party to the alleged premarital agreement between you and Teodoro, and her testimony about the origins of specific assets is of limited probative value on the community versus separate property characterization question.
The contestants may also argue that the original of the premarital agreement was lost or destroyed and that, under the California secondary evidence rules (Evidence Code Sections 1500 through 1553), the photocopy should be admitted as secondary evidence of the agreement's contents. However, even under the secondary evidence rules, the proponent of the evidence must establish the authenticity of the document — that is, that the photocopy is a true and accurate representation of an original that once existed and was duly executed. Given the forensic evidence of alteration identified by Dr. Prescott, the absence of your signature, your denial of ever executing the document, and the contestants' failure to produce an original despite our demand, we believe this argument will fail.
Our response at mediation: We will present Dr. Prescott's preliminary forensic document report and emphasize the fundamental deficiencies in the alleged premarital agreement. We will make clear that any attempt to rely on this document at trial would face a vigorous authenticity challenge, and that the contestants bear the burden of establishing the validity and enforceability of the agreement under Family Code Sections 1610 through 1617 — a burden they are unlikely to meet.
B. Separate Property Characterization of Key Assets
Beyond the premarital agreement, the contestants will advance asset-specific arguments in support of their separate property characterization claims.
With respect to Lumiére Canyon Studios LLC, the contestants will argue that the LLC was funded substantially with pre-marital capital that Teodoro derived from media assets he held before the marriage. They may attempt to present financial records or testimony suggesting that Teodoro's initial capital contribution to the LLC came from accounts that contained pre-marital funds.
With respect to Pacific Rim Narrative Partners LLC, the contestants will advance a similar argument, contending that Teodoro's investment in PRNP was made with separate property funds that can be traced to pre-marital sources.
With respect to the Malibu Beach House, the contestants will argue that the property is entirely separate because it was purchased before the marriage. They may downplay or challenge the community contributions, either by disputing the amounts or by arguing that the community was adequately compensated through the use and enjoyment of the property during the marriage — an argument that has no support in the Moore/Marsden case law.
Our response at mediation: We will reiterate that the community property presumption applies to all assets acquired during the marriage; that the contestants bear the burden of tracing any alleged separate property source and overcoming the presumption by clear and convincing evidence; that the Lumiére Canyon operating agreement confirms 50/50 ownership by both spouses and was executed during the marriage; and that the community contributions to the Malibu property totaling $3,816,400 create a substantial community interest that cannot be ignored.
C. Competing Valuations
We expect that Hargrove & Linden Appraisals Inc. will present valuations that are lower than those prepared by Pinnacle West. As noted above, the overall gap between our valuation of the probate estate ($71,112,000) and the contestants' valuation ($68,750,000) is approximately $2,362,000. While this gap is significant in absolute terms, it is relatively modest as a percentage of the total estate value (approximately 3.3%).
The specific areas where we expect the most divergence between the two appraisers include the IP portfolio valuation (where different discount rates, royalty projections, and residual income assumptions can produce materially different net present value calculations) and the PRNP membership interest valuation (where the illiquidity discount and the minority interest discount applied to a 35% non-managing membership interest can vary significantly depending on the appraiser's methodology).
These valuation differences may become a negotiation point at mediation, and we should be prepared to discuss them. However, they are secondary to the characterization disputes, which have a far greater impact on the overall outcome.
D. Isabela's and Nicolás's Individual Claims
At mediation, Isabela will push the promissory note claim ($1,310,460) as a creditor claim against the estate. If characterized as a valid debt obligation, a creditor claim would be entitled to payment before any distributions are made to beneficiaries. This could reduce the assets available for distribution to you and the other beneficiaries. We expect Isabela to present the promissory note, any supporting correspondence, and testimony regarding the circumstances of the alleged loan.
Nicolás will assert equitable grounds — including promissory estoppel and partial performance — for his $387,500 educational expense claim. He may present evidence of his enrollment in a graduate program, his reliance on his father's alleged promise, and the expenses he has incurred. Attorney Ortega may use the claimed amounts as additional bargaining leverage in the settlement negotiations.
We anticipate that Damian Ortega may use these individual claims strategically — not necessarily because they are strong claims on the merits, but because their inclusion in the mediation increases the overall size of the contestants' demand and creates additional settlement pressure. We should be prepared for this tactic and should not allow these claims to distort the mediation dynamic.
VI. Key Documents and Evidence for Mediation
In preparation for the mediation, we will assemble a comprehensive document binder that includes the following key materials:
1.  Dr. Elaine Prescott's Preliminary Forensic Document Report, dated February 22, 2023, prepared by Brindoval Forensic Document Services LLC — demonstrating signs of alteration in the alleged premarital agreement photocopy and concluding that the document is consistent with an incomplete or draft document.
2.  Pinnacle West Appraisal Group LLC Preliminary Valuation Findings — supporting our asset valuations for Lumiére Canyon Studios LLC ($31,600,000 enterprise value / $15,800,000 for the 50% interest), PRNP ($27,475,000 for the 35% interest), the IP portfolio ($4,600,000 NPV), the Beverly Hills residence ($8,450,000), and the Malibu Beach House ($6,200,000).
3.  Lumiére Canyon Studios LLC Operating Agreement, dated March 18, 2009, confirming the 50/50 membership interest structure between you and Teodoro.
4.  California Secretary of State filings for the relevant LLCs, including Lumiére Canyon Studios LLC (Filing No. 200906410337), Pacific Rim Narrative Partners LLC (Filing No. 201518720492), and Amber Light Documentary Films LLC (Filing No. 201912360185).
5.  Veltara Basin Bank, N.A. account statements and transaction histories for the brokerage account (ending -4782), personal checking account (ending -3091), and money market account (ending -6155), demonstrating community property deposits and the community character of the account funds.
6.  Coastline Title & Escrow Co. records for both the Beverly Hills residence and the Malibu Beach House. The contact at Coastline Title is Andrea Solis, and their offices are located at 9401 Wilshire Boulevard, Suite 720, Beverly Hills, California 90212.
7.  Malibu renovation records and mortgage payment history, establishing the community contributions of approximately $1,800,000 in renovation costs and approximately $2,016,400 in mortgage payments, for a total community contribution of approximately $3,816,400.
8.  Marriage certificate reflecting your marriage to Teodoro R. Fonseca on June 14, 2008, in Los Angeles County, California.
9.  Our demand letter dated December 1, 2022, addressed to Brennan, Ortega & Saldívar LLP, requesting production of the original premarital agreement — to which no original has been produced to date.
10.  Ridgeway Accounting Partners LLP preliminary estate inventory and financial reconciliation materials, prepared under the supervision of Dennis Chua, CPA, providing a comprehensive accounting of estate assets, liabilities, and income as of the most recent reporting period.
Elliot Nguyen and I will review these materials in advance and ensure that we have indexed copies available for use during the mediation. If, during your review of this letter, you identify any additional documents that you believe would be helpful, please let us know promptly so that we can incorporate them into the binder.
VII. Mediation Strategy and Settlement Parameters
A. Our Approach at Mediation
Our strategy at the mediation will be to open with our strongest position and to make clear from the outset that we approach the mediation from a position of legal and evidentiary strength. Specifically, we intend to:
First, establish that the alleged premarital agreement is unenforceable. We will present the forensic evidence of alteration, emphasize the absence of your signature, and explain the statutory requirements that the contestants cannot satisfy. We want the mediator and, through her, the contestants to understand that reliance on this document as a basis for reclassifying community property is both legally and factually untenable.
Second, demonstrate that all major assets in the estate are community property — either because they were acquired during the marriage (and therefore presumptively community property under Family Code Section 760) or because substantial community contributions were made during the marriage (as in the case of the Malibu property under the Moore/Marsden analysis).
Third, emphasize the legal consequence of a community property characterization: under Probate Code Section 6401, you are entitled to 100% of the decedent's share of community property. If the estate is properly characterized as entirely community property, the contestants receive nothing from community assets under the intestacy statutes. This is a powerful reality check for the other side, and it is important that the mediator appreciate this dynamic.
Fourth, present the forensic document analysis and the supporting documentary evidence to undermine the premarital agreement claim and to bolster our community property tracing for the Malibu property.
You should be prepared for a full-day session. Mediations in cases of this complexity and value typically begin with a joint session in which both sides make opening presentations to the mediator, followed by a series of private caucuses in which the mediator meets separately with each side to discuss the case, explore settlement possibilities, and convey proposals and counterproposals. The mediator, Judge Adler, is an experienced jurist who will be direct and candid in her assessments, and she may at times express views about the strengths and weaknesses of each side's position. I want you to be prepared for the possibility that she may identify areas where our position is strong as well as areas where she perceives potential vulnerability. This is a normal part of the mediation process and should not cause you alarm.
B. Settlement Considerations
While our legal position is strong, and while I believe we have the better of the arguments on both the law and the facts, I want to be candid with you about certain practical realities that bear on the settlement calculus.
Litigation is inherently expensive, unpredictable, and emotionally taxing. The total fees billed to date in this matter are substantial, and a trial on all contested issues — including the validity of the premarital agreement, the characterization of each disputed asset, the individual claims asserted by Isabela and Nicolás, and the competing valuations — could significantly increase those costs. Additionally, trials involve risk. Although we are confident in our position, no outcome is guaranteed, and a trial judge's assessment of the evidence may differ in some respects from our own.
A negotiated settlement may therefore be advisable if it accomplishes your primary objectives. Based on our discussions to date, I understand your core priorities to be:
(a) Preserving your ownership of Lumiére Canyon Studios LLC, the company that you co-founded and that is central to your professional life;
(b) Retaining the Beverly Hills residence as your home;
(c) Securing the bulk of the investment accounts and financial assets; and
(d) Resolving all outstanding claims — including Isabela's promissory note claim ($1,310,460) and Nicolás's educational expense claim ($387,500) — on terms that are final and comprehensive.
A settlement that achieves these objectives while making a reasonable payment to the contestants in exchange for a full and final release of all claims may serve your interests better than continued litigation, even if the payment to the contestants exceeds what they would be legally entitled to receive if we prevailed on all issues at trial. The value of certainty, finality, and the avoidance of further legal fees and emotional burden should not be underestimated.
I want to emphasize, however, that this letter provides only a preliminary framework for our settlement approach. The specific settlement parameters — including the range of acceptable settlement amounts, the structure of any payments, and the terms that we would require in a settlement agreement — will be discussed in detail during a separate privileged conversation that I would like to schedule with you prior to the mediation. That conversation will allow us to refine our approach based on your current thinking and to develop a detailed negotiation plan that we can execute at the mediation table.
C. Potential Standstill Agreement
If the mediation does not result in a full settlement of all issues — which is, of course, a possibility — we may recommend entering into a standstill agreement with the contestants. A standstill agreement would toll litigation deadlines (including discovery and motion deadlines) for a specified period of time while preserving the possibility of continued informal settlement discussions.
The principal advantage of a standstill agreement is that it reduces costs during the dormant period. With litigation activity on hold, both sides would avoid the substantial expenses associated with depositions, written discovery, expert witness preparation, and motion practice. At the same time, the agreement would protect your rights by ensuring that no deadlines are inadvertently missed and that neither side is prejudiced by the pause in formal proceedings.
During any standstill period, Ashford Fiduciary Services Inc. would continue to serve as the neutral administrator of the estate, ensuring that estate assets are preserved, managed, and accounted for. The monthly administration costs would continue during this period.
VIII. Logistics for April 12, 2023 Mediation
The following is a summary of the logistical details for the mediation:
Please bring a valid photo identification (driver's license or passport) to the mediation. The dispute resolution center may require identification for building access, and a photo ID may be needed if any documents are executed at the session.
I would ask that you review this letter thoroughly and prepare any questions or concerns that you would like to discuss during a pre-mediation strategy conference that we will schedule during the week of April 3, 2023. During that conference, we will walk through the anticipated flow of the mediation, discuss settlement parameters in detail, prepare you for the types of questions the mediator may ask, and address any issues that you want to raise.
IX. Confidentiality Reminder
I want to underscore a critically important point about the confidentiality of the mediation process. Under California Evidence Code Sections 1115 through 1128, all mediation proceedings are confidential. This means that:
•  Nothing said, written, or offered during the mediation may be disclosed to the Court or used in any subsequent court proceedings.
•  Settlement proposals, concessions, and counteroffers made during the mediation are confidential and cannot be introduced as evidence at trial.
•  The mediator's statements, evaluations, and recommendations — if any — are likewise confidential and may not be disclosed.
•  If the mediation does not result in a settlement, the litigation will proceed as if the mediation had never occurred, and no party may refer to what transpired during the mediation session.
This confidentiality protection extends to all participants in the mediation, including counsel, parties, and the mediator. I would ask that you not discuss the substance of the mediation — including any offers, counteroffers, or statements made by any party or the mediator — with anyone outside of the attorney-client relationship. This includes family members, friends, business associates, and any other person who is not part of our legal team. Maintaining strict confidentiality protects your interests and ensures that the mediation process can function as it is intended to.
X. Next Steps
In the period between now and the mediation, the following steps need to be completed:
1.  Pre-Mediation Strategy Conference: We will schedule a meeting with you during the week of April 3, 2023, to discuss the mediation in detail, review our settlement parameters, and prepare you for the session. My office will reach out to coordinate a date and time that works with your schedule.
2.  Confidential Mediation Brief: Calderwood & Harkness will prepare and submit a comprehensive confidential mediation brief to Hon. Constance Adler (Ret.) by April 5, 2023. This brief will outline our legal positions, summarize the key evidence, and provide the mediator with the context she needs to facilitate productive negotiations. The brief will be submitted on a confidential basis and will not be shared with opposing counsel.
3.  Document Binders: We will assemble the final document binders for use at the mediation, incorporating all of the materials described in Section VI above.
4.  Confirmation of Availability: Please confirm at your earliest convenience that you are available for the full day on April 12, 2023, beginning at 9:00 a.m. If there are any scheduling conflicts, please let us know immediately so that we can address them.
5.  Questions and Concerns: If you have any questions about this letter, the mediation process, or any other aspect of the case, please do not hesitate to contact me or Elliot Nguyen at:
Calderwood & Harkness LLP 350 South Grand Avenue, Suite 4800 Los Angeles, California 90071 Telephone: (213) 555-7200
Marguerite, I want to close this letter by expressing my confidence in the strength of your legal position. The community property presumption, the infirmities in the alleged premarital agreement, the supporting documentary evidence, and the weaknesses in the contestants' individual claims all favor our side. While mediation is, by its nature, a process of negotiation and compromise, we enter this mediation with substantial leverage and a clear-eyed understanding of both the strengths and the risks of your case.
Our team — Elliot, Grace Nakamura, and I — has been working diligently to prepare for this session, and we are confident that we will be well-positioned to advocate effectively on your behalf. Whatever the outcome of the mediation, you can be assured that we are prepared for all contingencies and that your interests will be vigorously protected.
I look forward to speaking with you during our pre-mediation conference the week of April 3rd.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Howard Quinn Partner 350 South Grand Avenue, Suite 4800 Los Angeles, California 90071
cc (via internal distribution — Calderwood & Harkness LLP): Patricia Dunmore, Billing Partner Elliot Nguyen, Lead Associate Grace Nakamura, Working Associate
Account | Account Number (last 4) | Approximate Balance
Brokerage Account | -4782 | $5,120,000
Personal Checking Account | -3091 | $342,000
Money Market Account | -6155 | $1,875,000
Total | $7,337,000
Date: | April 12, 2023
Time: | 9:00 a.m. (please plan for a full-day session; we may not conclude until the late afternoon or early evening)
Location: | Westside Dispute Resolution Center, 11400 West Olympic Boulevard, Suite 550, Los Angeles, CA 90064
Mediator: | Honorable Constance Adler (Ret.)
Attending for Ms. Fonseca: | Howard Quinn and Elliot Nguyen, Calderwood & Harkness LLP, together with Ms. Fonseca personally
Attending for Contestants: | Damian R. Ortega and Lydia Kwan of Brennan, Ortega & Saldívar LLP; presumably Rafael T. Fonseca, Isabela C. Fonseca-Greer, and potentially Nicolás R. Fonseca

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