Opinion
D081157
01-11-2024
ERIC WYSER CHARITABLE REMAINDER UNITRUST, Plaintiff and Respondent, v. NOUR-DEAN ANAKAR, Defendant and Appellant.
Nour-Dean Anakar, in pro. per., for Defendant and Appellant. Law Offices of Gregory S. Page and Gregory S. Page for Plaintiff and Respondent.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of San Diego County No. 37-2019-00054078-CU-BC-CTL, Joel R. Wohlfeil, Judge. Remanded with directions.
Nour-Dean Anakar, in pro. per., for Defendant and Appellant.
Law Offices of Gregory S. Page and Gregory S. Page for Plaintiff and Respondent.
MEMORANDUM OPINION
CASTILLO, J.
Nour-Dean Anakar appeals a judgment against him for breach of two promissory notes. He contends insufficient evidence supported the trial court's findings that he was liable to repay the Eric Wyser Charitable Remainder Unitrust (Trust), which brought the lawsuit. We find this matter appropriately resolved by memorandum opinion (see generally People v. Garcia (2002) 97 Cal.App.4th 847) and discern no reversible error on the merits on Anakar's incomplete appellate record. Nonetheless, as a trust cannot sue, we remand to the trial court with directions.
I.
This appeal arises from a contract dispute. In light of the deficient appellate record, we draw background facts from the pleadings and other portions of the written record as necessary for context.
A.
Michael P. Farah, an investment advisor, has been trustee of the Trust (Trustee) since 2008.
Anakar previously had a substantial ownership interest in, operated, and managed San Diego Surf Polo Club, LLC (Polo Club). He also controlled Polo Club's finances and financial records. Polo Club is now inactive but previously hosted polo matches.
Sometime in 2014, Farah met Anakar through polo events. In August 2017, Trustee issued a promissory note for $55,000 (Note 1) to Anakar and Polo Club to pay off Polo Club's liabilities, to purchase necessary equipment for polo matches, and as working capital for the organization. Anakar and Polo Club were jointly and severally liable under Note 1. In December 2018, Note 1 was replaced by a new promissory note for $82,500 (Note 3), representing the unpaid interest and principal owing on Note 1.
Trustee also issued a promissory note for $30,000 (Note 2) as a personal loan to Anakar for investment purposes.
Neither Anakar nor Polo Club has repaid Trustee under either of the remaining promissory notes.
B.
The Trust filed a complaint in the San Diego Superior Court alleging, as relevant here, that Anakar and Polo Club breached the promissory notes by failing to pay the sums due. Farah was not named as a plaintiff, either individually or as Trustee. However, the complaint repeatedly refers to Farah as a "plaintiff" and identifies numerous acts Farah undertook "on behalf of" the Trust. In addition, the joint trial readiness conference report identified Farah as a percipient witness, and he testified at the trial.
Following a one-day bench trial, the trial court issued a tentative decision and judgment in the Trust's favor and against Anakar for breach of the promissory notes. No party requested a statement of decision, so the trial court did not issue one. (Cal. Rules of Court, rule 3.1590(d), (h) &(i).) In the subsequently issued written judgment, the trial court declared the Trust was entitled to recover from Anakar $157,966.00 for breach of Notes 2 and 3, postjudgment interest, and attorney fees.
In his notice designating the record on appeal, Anakar elected to proceed without a record of the oral proceedings.
II.
A.
Anakar contends the trial court erred when it found him liable for breach of Notes 2 and 3, "as there is no substantial evidence to support that finding." But the appellate record is insufficient for Anakar to meet his burden to show the trial court's findings are not supported by substantial evidence.
1.
It is incumbent on the appellant to show error by way of an adequate record. (Null v. City of Los Angeles (1988) 206 Cal.App.3d 1528, 1532.) A trial court's judgment is presumed correct, "and all intendments and presumptions are indulged in favor of its correctness." (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.)
Where, as here, there is no reporter's transcript or other record of the oral proceedings below, "[t]he sufficiency of the evidence is not open to review. The trial court's findings of fact and conclusions of law are presumed to be supported by substantial evidence and are binding on the appellate court, unless reversible error appears on the record." (Bond v. Pulsar Video Productions (1996) 50 Cal.App.4th 918, 924 (Bond).) We must presume "that the unreported trial testimony would demonstrate the absence of error." (Estate of Fain (1999) 75 Cal.App.4th 973, 992.)
In addition, two consequences flow from an appellate record that, as here, lacks a statement of decision. First, "any objection to the trial court's failure to make all findings necessary to support its decision" is waived. (Acquire II, Ltd. v. Colton Real Estate Group (2013) 213 Cal.App.4th 959, 970.) "Second, the appellate court applies the doctrine of implied findings and presumes the trial court made all necessary findings supported by substantial evidence." (Ibid.)
2.
Anakar fails to support his contentions of error with citations to legal authority or developed arguments, and thus we deem them waived. (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785.) Even were that not the case, however, we would decide against Anakar on the merits.
As there is no reporter's transcript, we presume substantial evidence supported the judgment. Likewise, as there is no statement of decision, we presume the trial court made all factual findings necessary to support the judgment. These presumptions are fatal to Anakar's appeal to the extent he challenges the sufficiency of the evidence. We are bound by the trial court's findings of fact and conclusions of law "unless reversible error appears on the record." (Bond, supra, 50 Cal.App.4th at p. 924). We discern no such error here.
Both Notes 2 and 3 are facially valid promissory notes clearly stating the relevant terms. We must presume the testimony before the trial court confirmed the validity of these promissory notes and evidenced Anakar's breach of the promissory notes. Therefore, the trial court did not err in granting judgment against Anakar.
Ultimately, while Anakar "feels very strongly" that the trial court erred and asks that the judgment "be reconsidered and rejudged," that request is not within our province. "The Court of Appeal is not a second trier of fact." (James B. v. Superior Court (1995) 35 Cal.App.4th 1014, 1021.) Given Anakar's failure to provide an adequate appellate record, he has not met his burden of showing reversible error, and given his failure to adequately support his arguments, he additionally has waived his claims. We thus conclude the judgment is not reversible on the grounds Anakar raises.
B.
That determination does not, however, conclude our analysis. After this appeal was fully briefed, this court requested supplemental briefing from the parties on the following issue:
Here, the trial court issued judgment in favor of plaintiff and respondent the Eric Wyser Charitable Remainder Unitrust. (See 1 CT 97-99.) A trust, however, "is simply a collection of assets held for the benefit of designated beneficiaries" that "has no ability to sue or otherwise act independently from a trustee." (Jo Redland Trust, U.A.D. 4-6-05 v. CIT Bank, N.A. (2023) 92 Cal.App.5th 142, 156.) "[N]o lawful judgment can be rendered against" or in favor of a nonexistent entity. (Oliver v. Swiss Club Tell (1963) 222 Cal.App.2d 528, 538.)
What impact, if any, does this defect have on the instant appeal?
Anakar's supplemental letter brief was unresponsive to our request. The Trust's supplemental brief conceded the defect but requested we "modify the Judgment, the Amended Judgment, and, if necessary, the Complaint, nunc pro tunc, to reflect that Farah, as Trustee of the Trust, is the actual and substituted Plaintiff and Judgment creditor[ ] and . . . affirm the Judgment and Amended Judgment, as so modified." In the alternative, the Trust requested we (1) remand "for the sole purpose of directing the trial court to modify the Judgment[ ]" and (2) affirm the judgment, so modified.
"[A] trust cannot sue or be sued or otherwise act in its own name; instead the trustee acts on behalf of the trust." (Han v. Hallberg (2019) 35 Cal.App.5th 621, 632.) Accordingly, the trustee, not the trust, is the real party in interest with standing to prosecute a cause of action on the trust's behalf. (Saks v. Damon Raike &Co. (1992) 7 Cal.App.4th 419, 427; Code Civ. Proc., § 369, subd. (a)(2).) As a result, a judgment in favor of a trust, rather than its trustee, is unenforceable. (Portico Management Group, LLC v. Harrison (2011) 202 Cal.App.4th 464, 474.)
Here, because Trustee was not named as a party, there is not only a defect in the judgment as presently issued, but also in the parties. (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 1004.) Nonetheless, amendments to pleadings to substitute a party with standing for one without are liberally permitted so long as the amendment does not substantively alter the underlying claims. (Klopstock v. Superior Court of San Francisco (1941) 17 Cal.2d 13, 21; Code Civ. Proc., § 473, subd. (a)(1).)
Although Trustee was not named as a party in the complaint and the entire action was litigated in the name of the Trust rather than Trustee, the record is clear-despite Anakar's contrary claims during argument-that the parties were aware throughout the litigation that the actions underlying the claims were undertaken by Trustee on the Trust's behalf. The disputed promissory notes were signed by Farah in his role as Trustee for the benefit of the Trust. Farah, as Trustee, is repeatedly referred to as a plaintiff in the complaint. The joint trial readiness conference report identified Farah, not the Trust, as a witness, and Farah testified at the bench trial. The technical party defect went entirely unnoticed until this appeal. In these circumstances, amendment to substitute Trustee as plaintiff in the Trust's stead is warranted under Code of Civil Procedure section 473, subdivision (a)(1). (See Jo Redland Trust, U.A.D. 4-6-05 v. CIT Bank, N.A. (2023) 92 Cal.App.5th 142, 161-169 [trial court abused discretion in denying proposed amendment to substitute trustee as plaintiff in place of trust given lack of both prejudice and futility].)
We decline the Trust's invitation to amend the complaint in the first instance, however, as we believe the trial court is better situated to determine the question of prejudice for purposes of amendment. And because the complaint must be amended before the judgment may be, we further decline the invitation to amend and affirm the judgment at this time.
We cannot affirm a defective judgment like the one at issue here. However, we also conclude an unqualified reversal, which would necessitate retrial of the merits, would be an inequitable waste of the parties' and the trial court's time and resources. Should the trial court find limited amendment of the complaint to substitute Trustee in the Trust's stead proper, the amendment would have no effect on the merits of the claims already decided. We thus determine remand with directions is the appropriate disposition under these circumstances.
III.
We remand this matter to the trial court with directions to grant the Trust thirty days to file a motion to amend the complaint for the limited purpose of substituting Trustee for the Trust as plaintiff. Then, consistent with this opinion, the trial court shall consider the Trust's motion and enter judgment in this matter.
Each party shall bear its own costs on appeal.
WE CONCUR: DO, Acting P. J. KELETY, J.