Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC405815, Kenneth R. Freeman, Judge.
Hillel Chodos, Plaintiff and Appellant, in propria persona.
David M. Bass & Associates, Inc., David M. Bass and Peter M. Cho, for Defendant and Respondent.
MOSK, J.
INTRODUCTION
Plaintiff and appellant Hillel Chodos appeals from a summary judgment in favor of defendant and respondent Steven Spector, under Code of Civil Procedure section 437(c), on Chodos’s claim for recovery of attorney fees against Spector in his personal capacity. We hold that as the attorney engagement letter provides that Chodos represented Spector in his capacity as trustee, Chodos, as a matter of law, cannot recover attorney fees from Spector in his individual capacity. We affirm.
Pursuant to the applicable standard of review discussed below, we state the facts in the light most favorable to Chodos as the party against whom summary judgment was entered. (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142.)
In a RICO action filed in the United States District Court for the Central District of California (RICO action), a second amended complaint (SAC), named as defendants, Spector “as trustee of” various trusts, Medhi Ektefaie as “an individual, ” and others. The SAC provides that, “Plaintiffs sue Spector in his capacity as a director, manager, protector, and/or the sole or co-trustee of” various trusts, and that Spector was being sued in his representative capacity as trustee of the Trusts. The allegations include claims against Spector in his capacity as trustee for violation of various sections of the RICO act, for fraudulent conveyance, and for civil conspiracy.
18 U.S.C. § 1964, subsection (c) (Racketeering Influenced and Corrupt Organizations Act).
Chodos disputes that Spector was sued only in his representative capacity, but the court determined there was no material fact on this issue because Chodos failed to cite to any specific evidence that supports his position.
Chodos agreed to represent Spector and drafted and sent to him a retainer letter in which Chodos states: “You have asked me to represent you, and I have agreed to represent you in your capacity as Trustee of the various Trusts indentified in the complaint, in the defense of the [RICO] action. [¶] First of all, this will confirm that I have only been asked, and have only agreed, to represent you in your capacity as Trustee with respect to the action.” Chodos acknowledged in a document filed in the RICO action that he “has requested, and the Court has ordered, that [his] fees be paid out of the funds of the Kramer Trusts which are in Spector’s hands.”
Spector resigned as trustee of the trusts, and Joseph F. Etienne became the successor trustee. Spector filed an ex parte application in the RICO action for an order substituting Etienne for Spector as a defendant in the RICO action. Plaintiffs in the RICO action did not oppose Spector’s ex parte application for an order substituting Etienne for Spector in the RICO action. The United States District Court entered an order substituting Etienne for Spector in the RICO action, thereby dismissing Spector from the RICO action.
Chodos disputes this but he does so without any evidentiary support.
Chodos contends he was not paid for a portion of the attorneys fees for the services he rendered in connection with the RICO action, although this fact was not included in his separate statement of facts. Chodos filed a “Complaint for Attorney Fees” against Spector seeking to recover $145,175 in unpaid attorney fee charges. Chodos thereafter opposed a motion filed by Etienne, the new trustee, for leave to intervene, and ultimately Etienne dismissed his First Amended Complaint in Intervention.
Spector filed a motion for summary judgment contending that he was not personally liable for the attorney’s fees because he agreed to pay them in his representative capacity as trustee for certain specified trusts, and he is no longer the trustee of the trusts. Chodos opposed the motion, contending that Spector is personally liable for the debt. Chodos argued that he was not retained to represent the trusts because the trusts were not defendants in the RICO action, and instead he “was retained by Spector to represent him and various entities he then controlled.” The trial court denied Chodos’s evidentiary objections, all made on the grounds of relevance, to Spector’s undisputed material facts, and granted Spector’s motion. Judgment was entered in favor of Spector. Chodos timely appealed.
DISCUSSION
A. Standard of Review
“We review the grant of summary judgment de novo. (Szadolci v. Hollywood Park Operating Co. (1993) 14 Cal.App.4th 16, 19 [17 Cal.Rptr.2d 356].) We make ‘an independent assessment of the correctness of the trial court’s ruling, applying the same legal standard as the trial court in determining whether there are any genuine issues of material fact or whether the moving party is entitled to judgment as a matter of law.’ (Iverson v. Muroc Unified School Dist. (1995) 32 Cal.App.4th 218, 222 [38 Cal.Rptr.2d 35].) A defendant moving for summary judgment meets its burden of showing that there is no merit to a cause of action by showing that one or more elements of the cause of action cannot be established or that there is a complete defense to that cause of action. (Code Civ. Proc., § 437c, subd. (p)(2).) Once the defendant has made such a showing, the burden shifts back to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or as to a defense to the cause of action. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849, 853 [107 Cal.Rptr.2d 841, 24 P.3d 493].)” (Moser v. Ratinoff (2003) 105 Cal.App.4th 1211, 1216-1217.)
“In performing our de novo review, we view the evidence in the light most favorable to plaintiffs as the losing parties. [Citation.] In this case, we liberally construe plaintiffs’ evidentiary submissions and strictly scrutinize defendants’ own evidence, in order to resolve any evidentiary doubts or ambiguities in plaintiffs’ favor.” (Wiener v. Southcoast Childcare Centers, Inc., supra, 32 Cal.4th at p. 1142.)
B. The Trial Court Did Not Err In Granting the Motion
Chodos contends the motion should be denied because there was a triable issue of fact as to whether Spector was personally liable for the attorney’s fees. We reject this contention.
A trust in not a legal entity, but an aggregate of assets and liabilities. (Stoltenberg v. Newman (2009) 179 Cal.App.4th 287, 293; Tanner v. Best (1940) 40 Cal.App.2d 442, 445.) The trustee holds title and controls the assets of the trust, and as such, only the trustee may enforce the trust’s claims or defend claims against the trust. (Tanner v. Best, supra, 40 Cal.App.2d at p. 445.) A party can assert a claim against a trustee in the trustee’s personal capacity, in the trustee’s representative capacity, or in both capacities, depending on the circumstances. (Probate Code, §§ 18000, subdivision (a), 18002, and 18004; Stoltenberg v. Newman, supra, 179 Cal.App.4th at p. 295.)
All statutory citations hereafter are to the Probate Code unless otherwise indicated.
Section 18002 provides that, “A trustee is personally liable for torts committed in the course of administration of the trust only if the trustee is personally at fault.”
Section 18004 provides that, “A claim based on a contract entered into by a trustee in the trustee’s representative capacity, on an obligation arising from ownership or control of trust property, or on a tort committed in the course of administration of the trust may be asserted against the trust by proceeding against the trustee in the trustee’s representative capacity, whether or not the trustee is personally liable on the claim.”
Section 18000, subdivision (a), provides that, “Unless otherwise provided in the contract or in this chapter, a trustee is not personally liable on a contract properly entered into in the trustee’s fiduciary capacity in the course of administration of the trust unless the trustee fails to reveal the trustee’s representative capacity or identify the trust in the contract.” Chodos agreed to represent Spector “in his capacity as trustee....” The retainer letter, drafted by Chodos, discloses both Spector’s representative capacity and the identities of the trusts. It provides that, “[Spector] has provided [Chodos] with a copy of the federal complaint filed on behalf of Fidelity National Financial, Inc., against... [Spector] as Trustee of various trusts....” The engagement letter further provides that, “[Chodos has] agreed to represent [Spector] in [Spector’s] capacity as a Trustee of the various Trusts identified in the complaint, in the defense of the action....” [¶] First of all, this will confirm that [Chodos has] only been asked, and [had] only agreed, to represent [Spector] in [Spector’s] capacity as a Trustee with respect to the action.” By revealing Spector’s representative capacity as trustee, and identifying the trusts, the retainer letter satisfies the requirements of section 18000, subdivision (a), as to Spector’s representative but not personal liability.
Spector is no longer the trustee for the trusts, a new trustee having been appointed for them. Any claim against the trusts, therefore, cannot be brought by suing Spector in his individual capacity. (§ 18004; Tanner v. Best, supra, 40 Cal.App.2d at p. 445.)
It appears from the record that at one point Etienne, the new trustee, intervened in the action, over Chodos’s objection, and ultimately Etienne voluntarily dismissed his First Amended Complaint in Intervention.
Chodos in claiming against Spector personally, relies on Presta v. Tepper (2009) 179 Cal.App.4th 909 (Presta), for the proposition that the trustee of a trust, rather than the trust, is always the real party in interest in litigation involving trust. Chodos argues that because Spector, named as a trustee, is the real party in interest in the RICO action, “it was Spector, not the trusts, whom Chodos agreed to represent; and it was Spector, not the trusts, who contracted with Chodos to provide that representation.”
In Presta, supra, 179 Cal.App.4th 909, two trustees of different trusts entered into property partnership agreements in their capacities as trustees of the trusts. The agreements contained a clause providing that if one partner died, the deceased partner’s interest would be sold to the other partner. Upon the death of one trustee, the successor trustee refused to sell the property to the other partner, claiming that the partner was the trust, not the trustee, and therefore that no partner had died. The court found that because a trust was not capable of entering into a business relationship, it was the trustee who was considered to be the partner. Therefore, the trustee’s death invoked the sale upon death provision. (Id. at 914.)
Here, Spector as trustee is a party to the retainer letter. That, however, does not make Spector personally liable. Presta, supra, 179 Cal.App.4th 909, does not discuss the applicability of section 18000, which provides those limited circumstances under which a trustee can be personally liable on a contract. That a trust may only be sued by naming the trustee as the real party in interest does not mean that the trustee becomes personally liable for attorney fees incurred in defending the suit against the trust. Under Chodos’s argument, a trustee would always be personally liable for the contracts made on behalf of the trust simply because a trust lacks the capacity in litigation to sue or defend in its own name. As discussed, the requirement in section 18000 that the trustees representative capacity and the trust’s identity be disclosed to a party contracting with the trust has been satisfied in this case such that Spector is not personally liable. And Chodos has not cited any authority holding that a trustee is liable in his personal capacity on a contract entered into on behalf of the trust.
Chodos relies on Nicholson v. Fazeli (2003) 113 Cal.App.4th 1091 (Nicholson), cited in Presta, supra, 179 Cal.App.4th at pages 914-915, for the proposition that the trustee was the real party in interest in the allegedly malicious cross-complaint the trustee filed on behalf of the trust and, therefore, could be held liable in his individual capacity for the tort of malicious prosecution. (Nicholson, supra, at pp. 1102-1103.) Chodos argues, therefore, that Spector, in his individual capacity, was the real party in interest in the RICO action. It is true that Spector can be sued in his individual capacity for torts that he commits as a trustee in the course of administration of the trusts. (§ 18002.) In Nicholson, the trustee purportedly committed the tort of malicious prosecution by filing the lawsuit on behalf of the trust. That does not mean that Spector can be held liable in his individual capacity unless the RICO plaintiffs sue him as such, as the plaintiff did in Nicholson. (Nicholson, supra, at p. 1095, fn. 2.) Spector, however, was not sued in his individual capacity in the RICO action. In addition, the scope of the retention is for Chodos to represent Spector, in his capacity as trustee, “in defense of the [RICO action].”
In Andrews v. Horton (1935) 8 Cal.App.2d 40, the court held that an attorney could recover fees against a trustee individually because in that case, the trustees were named in the case in which the attorney represented them in their individual capacities, and the trial court found that the defendants entered into the attorney fee contract in their individual capacities. Also in that case, the defendants had previously paid the plaintiff attorneys out of their personal funds. Moreover, unlike this case, there the agreement did not specify that the representation of the trustees was in their capacity as trustees. That case highlights the elements that are necessary for any attorney to recover against a trustee individually-elements not present in the instant case.
C. Triable Issues of Fact
Chodos contends there is a material question of fact because Chodos never agreed to recover the attorney fees only from the trust assets. Chodos, however, never asserted this in his additional undisputed facts, nor did he dispute any of Spector’s undisputed facts on this basis. Chodos expressly represented Spector only in his capacity as trustee, and there is no evidence that Spector and Chodos agreed that Chodos could collect the attorneys fees from any source other than the trusts’ assets.
As an additional undisputed fact, Chodos contends that “Chodos and Spector both believed, when Chodos was retained, that Spector had potential personal liability in the... RICO action.” According to Chodos, this makes the issue of personal liability a material question of fact requiring that the motion be denied. The contention that Spector knew he had potential personal liability in the RICO action, however, is unsupported by any evidence. In any event, this does not create a disputed material fact because it is irrelevant. The scope of the retention is unambiguously defined in the retention letter and provides for Chodos to represent Spector, in his capacity as trustee, “in defense of the [RICO action].” The SAC in the RICO action names Spector as a defendant, “as trustee of” various trusts, and provides, “Plaintiffs sue Spector in his capacity as a director, manager, protector, and/or the sole or co-trustee of” various trusts. Claims asserted against a trust are made by proceeding against the trustee. (Prob. Code, § 18004.) The scope of Spector’s retention of Chodos, in Spector’s capacity as trustee, did not extend to representation of Spector in his personal capacity for “potential liability” in connection with the RICO action. Indeed, such representation could involve a conflict of interest. (See Estate of McLellan (1936) 8 Cal.2d 49, 54 [“It has always been against public policy for a trustee to occupy any position in which his actions affect his individual interests”].)
Chodos further contends there is a triable issue of material fact because Spector’s version of the retainer letter includes handwritten language that does not appear on Chodos’s version of the retainer letter. Spector’s motion attaches both versions of the retainer letter. Chodos does not explain how or why the handwriting on Spector’s version affects the otherwise unambiguous language of the agreement defining the scope of the retention. Chodos does not dispute that both versions of the retainer letter contain the language expressly stating that Chodos represents Spector only in his capacity as trustee. Specifically, Chodos does not dispute that he “drafted an engagement letter in which [Chodos] states: ‘You have asked me to represent you, and I have agreed to represent you in your capacity as Trustee of the various Trusts indentified in the complaint, in the defense of the [RICO action]. [¶] First of all, this will confirm that I have only been asked, and have only agreed, to represent you in your capacity as a Trustee with respect to the action.” Chodos has not raised any dispute of material facts that would preclude the granting of the motion for summary judgment.
DISPOSITION
The summary judgment is affirmed. Defendant shall recover his costs.
We concur: ARMSTRONG, Acting, P. J., KRIEGLER, J.