Portico Management Group, LLC v. Harrison
136 Cal. Rptr. 3d 151
Cal. Ct. App.2011Background
- Portico contracted to purchase the Continental from the Harrison Trusts; arbitration awarded Portico damages (about $1.62M) against the trust and HFE II, not against individual trustees; 2007 judgment confirmed the award against the trust and HFE II, excluding trustees; Portico sought enforcement by levying on rents and funds, naming successor trustees and Wei-Jen Harrison as WHRT trustee as potential judgment debtors; the trial court shifted from ruling that the trust could be a judgment debtor to holding the trust non-entity and the judgment unenforceable against trust assets; Kim and Lynn were appointed as cotrustees and filed a third-party claim on levied funds; numerous motions to amend the judgment and to add debtors were filed, with mixed rulings; ultimately the court denied adding Wei-Jen as a judgment debtor, but the appellate court reversed on that specific issue and remanded for further proceedings to determine alter-ego and added-debtor issues; the court affirmed other judgments and the award of fees to successor trustees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a judgment against a trust is enforceable against trust assets. | Portico argues judgments against the trust are enforceable against trust assets. | HCT/Harrisons contend a trust is not an entity and cannot be a judgment debtor. | No; judgments against a trust are unenforceable; enforceability requires naming trustees. |
| Whether Wei-Jen Harrison or the WHRT can be added as judgment debtors. | Portico sought to add Wei-Jen as WHRT trustee and WHRT as a judgment debtor. | Wei-Jen argued lack of alter ego and improper adding of debtors; court initially denied. | Remanded for further proceedings on alter-ego and debtor status; error identified in denial. |
| Whether the attorney-fee award to the successor trustees was correct. | Portico challenges the award to Kim and Lynn as prevailing parties. | Respondents supported the award under the contract provision. | affirmed; the award to successor trustees was sustained. |
Key Cases Cited
- Galdjie v. Darwish, 113 Cal.App.4th 1331 (Cal.App.4th 2003) (trust property held by trustees; signatures by individuals can bind trust)
- Jans v. Nelson, 83 Cal.App.4th 848 (Cal.App.4th 2000) (judgment against trustee; trustee liability; limitations of phrasing as against the trust)
- Haskett v. Villas at Desert Falls, 90 Cal.App.4th 864 (Cal.App.4th 2001) (claims may be asserted against the trust via proceeding against the trustee)
- Presta v. Tepper, 179 Cal.App.4th 909 (Cal.App.4th 2009) (trusts not entities; trustee standing to sue; property held in trust)
- Roehl v. Ritchie, 147 Cal.App.4th 338 (Cal.App.4th 2007) (cautionary about confirming arbitration awards; dress up issues in final awards)
- Moncharsh v. Heily & Blase, 3 Cal.4th 1 (Cal.4th 1992) (arbitrator decisions generally not reviewable for errors of fact or law)
- Mossman v. City of Oakdale, 170 Cal.App.4th 83 (Cal.App.4th 2009) (remand to arbitrator for clarification when award ambiguous)