In baseball, teams play just one team at a time and in one location. That is not always the case for their owners. The ongoing saga of the Seidler Family — owners of the San Diego Padres — being duked out in both Travis County, Texas Probate Court and in arbitration, illustrates a complex challenge facing modern litigation: What happens when trusts-and-estates disputes intersect with business agreements that contain mandatory arbitration clauses? This case highlights the growing complexity of multi-venue dispute resolution in an era where family wealth is increasingly tied to business entities with sophisticated governance structures.
Case Background: A Tale of Two Forums
The dispute centers on Sheel Kamal Seidler’s claims against Matthew and Robert Seidler regarding their roles as trustees of various trusts established by her late husband, Peter Seidler. Before he died in 2023, Peter Seidler was a co-founder of Seidler Kutsenda Management Company (SKMC), a private equity firm managing over $5 billion in assets, and owner of the San Diego Padres.
What makes this case particularly instructive is the dual nature of the claims. On one hand, Sheel filed suit in Travis County Probate Court seeking trustee removal and alleging breaches of fiduciary duty related to control and management of trust assets, San Diego Padres ownership issues, and general trustee misconduct. These are traditional probate matters that courts have long handled.
On the other hand, SKMC and one of its principals initiated an arbitration against Sheel two weeks before she brought her case in Texas. Therefore, Matthew and Robert moved to compel arbitration in the Texas matter, taking issue with Sheel trying to “publicly litigate” matters that they contend are subject to mandatory arbitration.
The Arbitration Web: Multiple Agreements, One Result
The defendants argue that Sheel’s SKMC-related claims must be arbitrated under several interconnected agreements. The primary arbitration sources include the core SKMC operating agreement, which contains broad arbitration language covering “any dispute relating to this Agreement.” Crucially, Sheel signed a spousal consent form acknowledging her binding commitment to the LLC agreement’s terms, including its arbitration provision.
The web extends further through the redemption agreement that explicitly incorporates the LLC agreement’s arbitration provision, the rescission agreement that also requires arbitration, and multiple general partner agreements with similar arbitration clauses. This creates a comprehensive framework where virtually any dispute touching on SKMC business matters arguably falls within arbitration requirements.
Perhaps most significantly, the defendants invoke the “direct benefits estoppel” doctrine, arguing that Sheel cannot simultaneously seek benefits under agreements while avoiding their arbitration requirements. This doctrine prevents parties from cherry-picking favorable contract terms while rejecting unfavorable ones, a principle with broad implications beyond this case.
Strategic Implications of Multi-Venue Disputes
Sheel’s strategy appears designed to keep all claims in probate court, where proceedings are public, traditional discovery rules apply, jury trials may be available (they are not available in all states, but they are in Texas), and judicial precedent provides more predictability. This approach allows her to frame the dispute as a matter of fiduciary duty and trustee misconduct rather than commercial contract disputes.
Arbitration proponents argue, however, this approach threatens to undermine contractual arbitration commitments, create inconsistent outcomes across forums, and increase costs through duplicative proceedings. The defendants face their own strategic challenges, including the prospect of partial arbitration where some claims may be arbitrated while others remain in court, coordination issues to ensure consistent factual findings across forums, and difficult decisions about whether to seek a complete stay or partial arbitration. They also have lost the benefit of confidentiality, which is often a driver behind wanting an arbitration provision.
Broader Trends and Implications
This case reflects broader trends in family wealth management that create fertile ground for multi-venue disputes. Modern family offices involve multiple entities with varying governance structures, creating complexity that didn’t exist when family wealth was held more simply.
The case also previews arbitration’s expanding reach into areas traditionally handled by courts. For instance, earlier this year, the Texas Court of Appeals reversed the lower court’s denial of testator’s children’s motion to compel arbitration against the grandchildren. Hollingsworth v. Swales, No. 10-23-00018-CV, 2025 Westlaw 479545 (Tex. App. Feb. 13, 2025) (not final). Family business disputes increasingly involve commercial arbitration clauses that affect family members who may not have directly negotiated them. Questions arise about whether trust beneficiaries can be bound by trustees’ arbitration agreements, challenging traditional notions of consent and contract formation. In contrast to Texas, a New Jersey court refused to enforce a will’s arbitration provision holding that, “a will is a unilateral disposition of property that does not require a meeting of the minds to be effective.” Matter of Est. of Hekemian, No. A-1774-21, 2023 WL 176098, at *6 (N.J. Super. Ct. App. Div. Jan. 13, 2023). It remains to be seen where jurisprudence on this issue will land, but at least for the time being, it will likely vary by state.
Practical Considerations for Practitioners
Drafting considerations become crucial in preventing these conflicts. Practitioners must clearly define which disputes are subject to arbitration while considering carve-outs for certain matters such as equitable relief or trustee removal. Including coordination mechanisms for staying related litigation pending arbitration can help manage multi-venue complexity. If attempting to add an arbitration provision to a will or other estate-planning document, counsel should determine whether courts in the controlling state will enforce it and consider providing alternatives in the event a court does not.
Litigation strategy requires early assessment to identify venue requirements before filing suit. And when on the receiving end of a lawsuit, determining whether there is an arbitration or other venue provision to enforce must be done quickly—otherwise, there is a risk of waiver.
Conclusion: Complexity in Modern Dispute Resolution
The Seidler case exemplifies the modern reality of dispute resolution, where clean separations between forums are increasingly rare. As family wealth becomes more institutionalized and business relationships more sophisticated, practitioners must develop strategies that account for multiple venues, overlapping jurisdictions, varying choice-of-law, and competing procedural requirements.
Ultimately, anytime there is a multi-front war, the primary winners are the lawyers, as these cases will cost the parties and trusts involved far more than a unilateral war. After all, significant time and resources will be spent fighting about where to fight the fight before the real fight can even begin.
Related Attorneys
Partner
