Case Number: G063394
Court: California Court of Appeal, Fourth Appellate District, Division Three
Date Filed: August 31, 2025
Holding
The court held that, as the sole trustee of the restated Donald B. Clark and Linda Clark Trust, Linda Clark possessed standing to sue on the promissory notes transferred into the trust, and she was not required to obtain probate‑court authorization before bringing the action.
Narrative
Lead – In a decision that clarifies trustee standing and the procedural independence of trust‑based collection actions, the California Court of Appeal reversed a trial‑court judgment that had barred Linda Clark, trustee of the Donald B. Clark and Linda Clark Trust, from enforcing two promissory notes issued by former business partners of the decedent. The ruling underscores that a general assignment of property into a revocable inter‑vivos trust vests the trustee with both the power and duty to protect trust assets, without the need for separate probate court approval.
Procedural backdrop – The dispute originated when Donald B. Clark sold his company, Precision Airparts Support Services, Inc. (PASS), to Tony Ordaz and Ira Smith in December 2012. The buyers executed two notes—$50,000 for equipment and $920,000 for stock—payable beginning January 2018. After Donald’s death in August 2015, his widow, Linda Clark, served as sole trustee of the restated Donald B. Clark and Linda Clark Trust (the “Trust”), which had previously absorbed virtually all of the couple’s separate and community assets, including the notes.
When the buyers defaulted, Linda filed suit in Orange County Superior Court in November 2018, seeking repayment. The case was later consolidated with a counter‑claim by PASS alleging fraud and breach of contract. After a trial that began in May 2023, respondents moved for nonsuit on the ground that Linda lacked standing because she was not a holder in due course and, alternatively, because she was not authorized to sue as trustee. The trial court, after supplemental briefing, concluded that Linda had no standing and entered judgment for the defendants. Linda appealed.
Key factual findings – The appellate record confirms that:
- The Trust’s restatement expressly transferred “all our real, personal, tangible, and intangible property…whether separate or community” into the Trust, with only a narrow list of exclusions that did not include the promissory notes.
- Upon Donald’s death, Linda became the sole trustee, wielding absolute authority over the Trust’s “Survivor’s Trust” and “Marital Share.”
- The trial court allowed Linda to amend her complaint to sue “as an individual, as the surviving trustee and surviving beneficiary of the Trust, and as the community‑property owner of the Notes.” The amendment was both orally approved and subsequently reflected in two written minute orders.
- No evidence was presented that the notes were ever removed from the Trust after the restatement.
Issues presented – The appeal turned on two intertwined questions: (1) whether Linda, as trustee, had standing to enforce the notes, and (2) whether probate‑court authorization (e.g., a Heggstad petition) was required before a trustee could sue on trust assets that are personal property rather than real estate.
Court’s analysis –
Standing as trustee – The court applied California Probate Code §§ 15200, 16249, 16007, 16010 and parallel Colorado statutes (§ 15‑5‑401, § 15‑5‑816, § 15‑5‑809, § 15‑5‑811). Under these provisions, a trustee may “prosecute or defend actions…for the protection of trust property” and has a fiduciary duty to make trust assets productive and to enforce claims. The general assignment language in the Trust’s restatement satisfied the statutory definition of a valid transfer of personal property into a trust (see Ukkestad v. RBS Asset Finance, Inc., 235 Cal.App.4th 156 (2015); Kucker v. Kucker, 192 Cal.App.4th 90 (2011)). Consequently, the notes became trust assets, and Linda, as sole trustee, possessed both the power and the duty to sue on them.
Form of the pleading – The court noted that a trustee may sue in his or her own name without expressly naming the trust, citing Moeller v. Superior Court (1997) 16 Cal.4th 1124 and Hassoldt v. Patrick Media Group, Inc. (2000) 84 Cal.App.4th 153. Linda’s amended complaint, approved both orally and in writing, satisfied this procedural requirement; the trial court’s reliance on a technical defect was misplaced.
Probate‑court authorization – The appellate court rejected the respondents’ contention that a Heggstad petition or other probate proceeding was necessary. Estate of Heggstad (1993) 16 Cal.App.4th 943 addresses the transfer of real property; the notes are personal property, rendering Heggstad inapplicable. Moreover, both California Probate Code § 16200(b) and Colorado Rev. Stat. § 15‑5‑815(1)(b)(III) expressly allow trustees to exercise statutory powers without court approval. The Trust itself contained an explicit clause permitting the trustee to act “without prior approval from any court.” Accordingly, Linda’s action was fully authorized by statute and by the governing instrument.
Disposition – Because Linda possessed standing as trustee and required no probate authorization, the trial court’s judgment was reversed. The case was remanded for further proceedings consistent with the appellate opinion, and Linda was awarded appellate costs.
Impact and unresolved questions – This decision reinforces the principle that a properly drafted general assignment can sweep personal property, including negotiable instruments, into a revocable trust, thereby vesting enforcement authority in the trustee. Practitioners should ensure that trust restatements expressly encompass all categories of property to avoid later disputes over standing. The ruling also clarifies that procedural formalities—such as a written order confirming a complaint amendment—are satisfied when the court’s oral approval is subsequently reflected in the record, reducing the risk of technical dismissals.
Unresolved issues remain regarding the interaction of multi‑state trusts with differing statutes of fraud regimes. While the court found the California and Colorado statutes harmonized in this case, future disputes may arise where a trust’s situs and the location of the underlying asset diverge, potentially invoking conflict‑of‑laws analysis. Additionally, the opinion did not address whether a trustee must disclose the trust’s existence in the pleading when the claim involves personal property that could be traced to the settlor’s separate assets; lower courts may still grapple with the appropriate level of disclosure.
Overall, the opinion provides clear guidance for California and Colorado trustees seeking to enforce claims on trust‑held personal property, emphasizing statutory authority over procedural formalities and underscoring the fiduciary duty to protect trust assets without unnecessary court involvement.
Referenced Statutes and Doctrines
- California Probate Code §§ 15200, 62, 16249, 16007, 16010, 16200(b)
- California Code of Civil Procedure § 631.8 (motion for judgment)
- Colorado Revised Statutes §§ 15‑5‑401, 15‑5‑816, 15‑5‑809, 15‑5‑811, 15‑10‑201, 15‑5‑815(1)(b)(III)
- General assignment doctrine – transfer of real and personal property by written instrument (Ukkestad v. RBS Asset Finance, Inc., 235 Cal.App.4th 156 (2015); Kucker v. Kucker, 192 Cal.App.4th 90 (2011))
- Trustee standing and pleading – Moeller v. Superior Court (1997) 16 Cal.4th 1124; Hassoldt v. Patrick Media Group, Inc. (2000) 84 Cal.App.4th 153; People v. Rogers (2013) 57 Cal.4th 296; McKoin v. Rosefelt (1944) 66 Cal.App.2d 757
- Duty to enforce claims – Purdy v. Johnson (1917) 174 Cal. 521; Boshernitsan v. Bach (2021) 61 Cal.App.5th 883
- Heggstad petition – Estate of Heggstad (1993) 16 Cal.App.4th 943
- Probate avoidance – Weber v. Langholz (1995) 39 Cal.App.4th 1578; Zanelli v. McGrath (2008) 166 Cal.App.4th 615; Estate of Parrette (1985) 165 Cal.App.3d 157.