Lead Opinion
Anthony Aulisio, Jr., appeals from a jury verdict that found defendants, consisting of his homeowners association’s management company (Optimum Professional Property Management and Debra Kovach), the patrol service it employed (BLB Enterprises, Inc., doing business as Patrol One, and Bill Bancroft), and a towing company (PD Transport, doing business as Southside Towing, and John Vach), did not wrongfully tow and convert his Jeep vehicle, or convert the personal property it contained. CAAJ Leasing Trust (CAAJ), which Aulisio created as sole grantor, trustee, and trust beneficiary, owned legal title to the Jeep and also appeals. Specifically, CAAJ appeals the trial court’s ruling at the outset of trial that CAAJ “can’t participate in the proceedings” with Aulisio appearing in propria persona as the trust’s sole trustee and sole beneficiary.
The trial court relied on precedent that an executor or personal representative may not appear in propria persona in court proceedings outside the probate context on behalf of a decedent’s estate because representing another person or entity’s interest in a lawsuit constitutes the unauthorized practice of law. (Hansen v. Hansen (2003)
The purpose of the State Bar Act (Bus. & Prof. Code, § 6000 et seq.; all undesignated statutory references are to this code) and its prohibition against the unauthorized practice of law (§ 6125) is to protect the public, the courts, and litigants who rely on attorneys by “ ‘assuring] the competency of those performing [legal] services.’ ” (Drake v. Superior Court (1994)
Consequently, we conclude that a sole trustee of a revocable living trust who is also the sole settlor and beneficiary of the trust assets he or she is
I
FACTUAL AND PROCEDURAL BACKGROUND
Aulisio includes in the appellate record only the reporter’s transcript of the trial court’s pretrial hearings, a printout of the trial court’s summary register of filings in the case, and the judgment and notice of judgment, but not the trial transcript or any of the actual pleadings, motions, or other filed documents. This scant record barely suffices as a basis to review CAAJ’s appeal of the trial court’s pretrial ruling. (See Nielsen v. Gibson (2009)
Defendants towed Aulisio’s 1987 Jeep Cherokee from his driveway or the road outside his home in a condominium complex in June 2009. According to defendants, the patrol company retained by the homeowners association cited the Jeep on several occasions for parking in the complex with expired “tags,” in violation of the association’s parking rules requiring current vehicle registration. When Aulisio did not move the Jeep or update the expired tags, the patrol company cited the vehicle again and had it towed. According to Aulisio, he displayed prominently on the Jeep’s dashboard a “moving pass” issued by the Department of Motor Vehicles that constituted valid, current vehicle registration, and therefore defendants wrongfully cited and towed his Jeep. According to Aulisio, despite his attempts to recover the Jeep and its contents, defendants “refused to return the property . . . , all of which eventually disappeared with no explanation.”
Aulisio retained a lawyer who filed a complaint on his behalf and on behalf of CAAJ for the allegedly wrongful towing and conversion. CAAJ owned the
The trial court resolved the issue at a hearing on the day of trial. First, the trial court substituted Aulisio, in his capacity as CAAJ’s sole trustee, for CAAJ as a plaintiff in the lawsuit. Confirming “that you, Mr. Aulisio, are the only trustee for the CAAJ Leasing Trust,” the trial court “amend[ed] the plaintiffs name [on the complaint] from CAAJ Leasing Trust to Anthony Aulisio, Jr., as trustee for the CAAJ Leasing Trust.” The court explained, “I am doing that sua sponte because the leasing [trustee has] a fiduciary duty with respect to [protecting trust] property.” The trial court correctly substituted the trustee as the proper plaintiff instead of the trust itself because in a cause of action brought on behalf of a trust, the trustee is the real party in interest, not the trust itself or its beneficiaries. (Powers v. Ashton (1975)
Next, the trial court rejected Aulisio’s suggestion that as CAAJ’s sole trustee and sole beneficiary he was entitled to appear in propria persona to vindicate his interest in the Jeep. Aulisio relied on an oft-cited federal case, C.E. Pope Equity Trust v. U.S. (9th Cir. 1987)
The court explained to Aulisio, “[Yjou’re entitled as the trustee to assert the rights to protect the property of the trust,” but concluded, “not in pro per, not by yourself, not you representing it.” Reasoning from the example in Hansen of an executor unsuccessfully attempting to represent the decedent’s estate in a nonprobate plaintiff’s action (Hansen, supra, 114 Cal.App.4th at pp. 619-620), the trial court concluded: “In California, a trustee who is not a lawyer cannot appear in pro per in legal proceedings to protect the assets of the estate . . . .” The trial court emphasized to Aulisio, “You cannot do that,” but acknowledged candidly, “I may be wrong about that, [f] It may be that there is an exception . . . you may be right in the long run that [such a] trust is entitled to be represented by the trustee whether they’re a lawyer or not. [But that] is not what the case law says. That is not what this district has said.”
Accordingly, the trial court explained that in the absence of a licensed attorney appearing on behalf of the trust, “[I]t is like [CAAJ] didn’t show up today for the hearing, for the matter. [|] So that is the way it is going to sit at this point. [A]t this point, there is no evidence. They [CAAJ] can’t participate in the proceedings.”
The court also clarified: “[T]he issue of the [Jeep] is not an issue we’re going to try. Well, you—Mr. Aulisio, you can present evidence with regard to the car but no—you’re not going to be able to seek any damages for the car. You didn’t own the car. [][]... There may—there will be evidence, I am sure, about the towing of the car. Because that is the basis for the claim that they owe you with respect to the personal property, your personal property [in the car]. [][] But you’re not going to be allowed to argue that they have any liability for whatever was leased, the car and anything else that was leased [by] CAAJ, because you’re not representing them, the trust. I will tell [the jury] that the trust—well, I will tell them that CAAJ at this point is not a party to the case.”
Consequently, CAAJ and Aulisio in his capacity as CAAJ’s trustee did not participate in the remainder of the trial. After the jury rendered a defense verdict, the trial court entered a written judgment “for all defendants and against Anthony Aulisio, Jr.,” and “for all defendants and against Anthony Aulisio, Jr., as Trustee for the CAAJ Leasing Trust.” Aulisio now appeals for himself individually and as CAAJ’s trustee.
DISCUSSION
A. Aulisio’s Right to Appear in Propria Persona to Litigate CAAJ’s Interests
Aulisio contends the trial court erred in concluding he could not appear in the trial proceedings on behalf of the trust as its sole settlor, trustee, and beneficiary without violating the statutory prohibition against the unauthorized practice of law. We agree. Section 6125 provides: “No person shall practice law in California unless the person is an active member of the State Bar.” Because the facts are undisputed, we review de novo whether a person’s conduct amounts to practicing law without a license. (See Hansen, supra,
The trial court’s reliance on Hansen and its antecedent, City of Downey, was misplaced because those cases involved a personal representative and an executor purporting to represent a decedent’s estate in nonprobate general civil suits, not as here a trustee who was also the trust’s sole settlor and beneficiary. In Hansen, the plaintiff (Patricia) claimed to be the personal representative of her mother’s estate and on the estate’s behalf sued her sister Christine, alleging Christine withdrew and misspent $90,000 from their mother’s bank account before the mother died. (Hansen, supra,
Similarly, in City of Downey the court explained the executor of a decedent’s estate could not defend “in propria persona” against the city’s eminent domain action against the decedent’s property. (City of Downey, supra,
Ziegler articulates a similar general prohibition for nonattomey trustees. Ziegler recognized that unlike a corporation or similar entities, a “ ‘trust is not a person but rather “a fiduciary relationship with respect to property.” [Citations.] Indeed, “ ‘ “an ordinary express trust is not an entity separate from its trastees.” ’ ” [Citation.]’ [Citations.]” (Ziegler, supra,
Ziegler explained, however, that “ ‘a trustee’s duties in connection with his or her office do not include the right to present argument [in propria persona] in courts of the state, because in this capacity such trustee would be representing interests of others and would therefore be engaged in the unauthorized practice of law. [Citation.]’ [Citations.] [f] Stated otherwise, ‘[a] trustee must always act solely in the beneficiaries’ interest. [Citations.]’ [Citations.]” (Ziegler, supra, 64 Cal.App.4th at pp. 548-549, original italics, some brackets added.) Consequently, Ziegler held: “A nonattomey trustee who represents the trust in court is representing and affecting the interests of the beneficiary and is thus engaged in the unauthorized practice of law.” (Id. at p. 549.) Ziegler therefore affirmed on appeal the trial court’s order directing the nonlawyer trustee to withdraw as the trust’s attorney in a lawsuit involving the trust’s purchase of a mobilehome, and to instead retain a lawyer to appear for the trust. (Id. at pp. 547, 549.) Like Hansen and City of Downey, Ziegler articulates a general rale that nonattomeys who purport to conduct litigation on behalf of others violate the prohibition against the unauthorized practice of law.
But where, as here, the trustee is also the sole settlor and trust beneficiary, the rationale underlying the prohibition on a trustee’s in propria persona representation does not apply. Simply put, a trustee litigating on behalf of a trust in which he as the settlor has designated himself the sole beneficiary is not representing the interests of others. The interest he represents is his own.
The trial court here analogized to sole shareholder corporations as a reason to preclude Aulisio from proceeding in court on the trust’s behalf. “A
But as Ziegler explained, corporations and trusts differ in important respects. “In contrast to a coiporation which is a ‘ “. . . distinct legal entity separate from its stockholder and from its officers” [citation],’ ” a trust is “ ‘not a person but rather “a fiduciary relationship” ’ ” between the trustee and trust beneficiaries. (Ziegler, supra,
It is critical here that Aulisio is the sole trust settlor. In a revocable trust, the “trustee owes a fiduciary duty to the settlor, not to the beneficiaries, as long as the settlor is alive. During that time, the trustee needs to account to the settlor only and not also to the beneficiaries. When the settlor dies, the trust becomes irrevocable, and the beneficiaries’ interest in the trust vests.” (Estate of Giraldin (2012)
But as CAAJ’s sole settlor, trustee, and beneficiary, the interests Aulisio attempted to represent at trial were his own. The right of self-representation is long established, with examples dating to statehood and long predating the State Bar Act. (E.g., Ex parte Field (1850)
B. Aulisio’s Personal Property in the Jeep
Aulisio argues in his own capacity that the judgment in favor of defendants and against him personally should also be reversed because the jury “would have been confused that the liability related to the taking of the Jeep was not at issue and thus [mistakenly concluded] its contents, including the computer[,] could not have been wrongfully taken.” Aulisio, however, does not include in the record on appeal any of the trial proceedings. He does not include a reporter’s transcript of the trial or any portion of the trial, nor any jury instructions or other trial materials.
It appears from the transcript of the trial court’s self-representation ruling on the first day of trial that the court excluded evidence of damages concerning the Jeep, but not whether it was wrongfully towed. The court explained: “[T]he issue of the [Jeep] is not an issue we’re going to try. Well, you—Mr. Aulisio, you can present evidence with regard to the car but no—you’re not going to be able to seek any damages for the car. You didn’t own the car. [][]... There may—there will be evidence, I am sure, about the towing of the car. Because that is the basis for the claim that they owe you with respect to the personal property, your personal property [in the car]. [][] But you’re not going to be allowed to argue that they have any liability for whatever was leased, the car and anything else that was leased [by] CAAJ, because you’re not representing them, the trust. I will tell [the jury] that the trust—well, I will tell them that CAAJ at this point is not a party to the case.”
On this record, the distinction between damages for the Jeep and causation, i.e., whether it was wrongfully towed and therefore also resulted in the loss of Aulisio’s personal property, does not establish any error in the judgment concerning Aulisio in his individual capacity. He did not own the Jeep in that capacity and therefore was not entitled to assert damages for its loss. His suggestion the jury would have been confused by the difference between damages and causation fails because we presume jurors are intelligent and capable of sorting through the evidence and applying the law. We may not assume the trial court erroneously excluded towing or other causation evidence relevant to Aulisio’s loss of his personal property, nor may we assume the trial court erroneously instructed the jury or somehow committed other
C. Structural Error
The towing defendants argue that because the jury heard and rejected evidence the towing was improper, “[flhere is no possible different result if a conversion of the Jeep claim had been tried . ...” In effect, the towing defendants argue the jury’s verdict renders “moot” any error in precluding Aulisio from representing CAAJ and thereby preventing CAAJ from participating in the trial. According to defendants, “Evidence about the validity of the tow consumed virtually the entire trial. It was ‘the’ issue,” and they do not want to retry it as to CAAJ and damages for the Jeep. Defendants rely on the principle that an appellant must demonstrate not only error, but also prejudice, and they claim that in failing to provide the trial record and thereby also failing to prove any prejudicial evidentiary or instructional error, CAAJ is not entitled to reversal. They insist there is no reasonable probability a different judgment could have been rendered.
Structural error requires reversal here. Structural errors affect “the framework within which the trial proceeds, rather than simply an error in the trial process itself.” (Arizona v. Fulminante (1991)
The trial court committed structural error here by effectively precluding CAAJ from participating in the trial. The trial court recognized that with its
Due process is a flexible concept, but at its core includes the right to be heard. (Mathews v. Eldridge (1976)
III
DISPOSITION
The judgment is affirmed as to Aulisio in his individual capacity. The judgment is reversed as to CAAJ and Aulisio as CAAJ’s trustee, and remanded for further proceedings consistent with this opinion. Aulisio is entitled to costs on appeal.
Ikola, J., concurred.
Notes
C.E. Pope was the first to recognize the prohibition against unauthorized legal practice does not apply to a trustee who is also “the actual beneficial owner of the claims being asserted by the Trusts.” (C.E. Pope, supra,
Concurrence Opinion
As the author of Hansen v. Hansen (2003)
Business and Professions Code section 6125, part of the State Bar Act, provides that “[n]o person shall practice law in California unless the person is an active member of the State Bar.” As Hansen explains, “[sjince the passage of the State Bar Act in 1927, persons may represent their own interests in legal proceedings, but may not represent the interests of another unless they are active members of the State Bar.” (Hansen, supra,
An ordinary express trust is not an entity separate from its trustees but rather is “ ‘a fiduciary relationship with respect to property.’ ” (Moeller v. Superior Court (1997)
The record does not reveal much about the CAAJ Trust. Indeed, we do not even have a copy of the purported trust instrument. What we do know is based only on representations made by Aulisio on the first day of trial. He represented to the trial court, and the parties have accepted as true for purposes of the appeal, that the CAAJ Trust is a revocable living trust, and that Aulisio, who is a natural person, is its sole settlor, sole trustee, and sole beneficiary.
A trust is presumed to be revocable by the settlor unless the trust instrument expressly makes the trust irrevocable. (Prob. Code, § 15400.) “A revocable trust is a trust that the person who creates it, generally called the settlor, can revoke during the person’s lifetime. The beneficiaries’ interest in the trust is contingent only, and the settlor can eliminate that interest at any time. When the trustee of a revocable trust is someone other than the settlor, that trustee owes a fiduciary duty to the settlor, not to the beneficiaries, as long as the settlor is alive.” (Estate of Giraldin (2012)
Those principles support the proposition that when, as in this case, the settlor, trustee, and beneficiary are the same natural person, and the settlor can revoke the trust at any time, the trustee litigating to defend the trust corpus is in effect representing his or her own interests. The trustee’s fiduciary duties are owed to the settlor, who is the same person as the trustee. In this very limited situation, the trustee may invoke the right of self-representation and appear and represent the trust in litigation affecting trust property.
I emphasize that if any one of those facts is different—i.e., the trustee was not the sole settlor or the sole beneficiary, there is more than one trustee, the trustee is not a natural person,
If the evidence presented after remand shows the facts regarding the CAAJ Trust are different from those represented by Aulisio, the majority and concurring opinions do not preclude the trial court from considering again whether Aulisio, as trustee, can represent the CAAJ Trust in propria persona without violating the rule against nonlawyers representing the interests of others.
The decision in this matter is consistent with Ziegler, Hansen, and City of Downey. As noted, Ziegler did not expressly state whether the trust in that case was revocable and whether the trustee was the sole settlor and the sole beneficiary. Hansen and City of Downey concerned executors of decedents’ estates, and not trustees of revocable trusts. Hansen held, “[a] person who is unlicensed to practice law and who represents a decedent’s estate cannot appear in propria persona on behalf of the estate in matters outside the probate proceedings.” (Hansen, supra,
Considering the lack of California authority dealing precisely with the issue presented in this case, the trial court understandably relied on Hansen and City of Downey. Those decisions, and Ziegler, though distinguishable from this matter, were correctly decided, and nothing in the majority opinion can or should be read to limit or abrogate them.
Finally, I concur in the portion of the majority opinion affirming the judgment against Aulisio in his personal capacity.
“ ‘A corporation cannot represent itself in court, either in propria persona or through an officer or agent who is not an attorney.’ ” (Merco Constr. Engineers, Inc. v. Municipal Court (1978)
Hansen left open the issue whether the personal representative of a decedent’s estate may represent herself in propria persona in litigating a petition in the probate proceedings. (Hansen, supra,