Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior of Los Angeles County No. BC371421. Susan Bryant-Deason, Judge.
Sigelman Law Firm and Paul Sigelman for Plaintiff and Appellant.
French & Lyon and James H. French for Defendant and Respondent.
Judge of the Orange Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
INTRODUCTION
Sonny Gibson brought this action against respondent HSBC Bank USA (the bank), to recover monies withdrawn from an account on which he was one of two signatories. He appeals from a summary judgment entered after the trial court found that the statute of limitations had run on his cause of action. Because the evidence showed that the account was held in the name of a trust of which Gibson was a beneficiary, and Gibson did not join the trust or allege that he was the trustee, we requested supplemental letter briefs addressing whether Gibson was the real party in interest with standing to appeal. As Gibson has not shown that he was the real party in interest, we find that he does not have standing, and we dismiss the appeal.
The events at issue began with the bank’s predecessor, Republic Bank.
BACKGROUND
Gibson commenced this action May 21, 2007. The complaint alleged that, in 1997, Gibson deposited $435,000 to open a joint banking account with Reparata Mazzola, who is not a party to the action or the appeal. The complaint alleged that Gibson and Reparata signed a new bank signature card in 2001, in order to require both their signatures for withdrawals in amounts over $5,000. Approximately two or three months later, beginning May 1, 2001, Gibson was incarcerated until January 11, 2006. The complaint alleged that, during that time, seven withdrawals or payments of checks in amounts in excess of $5,000 were made from the account without his signature, and thus were unauthorized under the terms of his contract with the bank. The complaint alleged that the final withdrawal was made April 12, 2002, but Gibson did not discover the withdrawals and payments until shortly after his release from prison in 2006.
Because three persons named Mazzola appear in the facts, we shall refer to them by their first names, to avoid confusion.
The bank answered the complaint and filed a motion for summary judgment on the ground that the action was barred by California Uniform Commercial Code sections 4406 and 4111. The first 12 items in the bank’s statement of undisputed facts merely restated the allegations of the complaint that we have summarized above, and were admitted by Gibson in his responsive statement. Gibson denied the two remaining items, Nos. 13 and 14.
Item 13 stated that throughout the period of the allegedly unauthorized transactions, May 2, 2001, through April 12, 2002, the bank mailed account statements with copies of the relevant checks to the address indicated by the account holders for the account. Item 13 was supported by the declaration of Robert Crutchley, the bank’s designated custodian of records, who attached copies of the statements, and stated that the statements were sent to an address obtained from the account customer, and that only the account customer could change the address. Until the August 2001 account statement, the statements were addressed to the DM Family Trust at an address on Esther Avenue in Los Angeles. After that time, until the account was closed, the statements were addressed to the DM Family Trust at an address on Brook Avenue in Passaic, New Jersey (Passaic address).
Item 14 of the bank’s statement of undisputed facts alleged that Gibson did not report the subject transactions to the bank prior to filing his complaint. It is supported by Crutchley’s statement that there was no evidence of such reporting.
Gibson offered a legal conclusion as his only additional allegedly undisputed fact. He asserted that the statute of limitations never accrued on his cause of action because the bank failed to deliver the account statements or cancelled checks to him in time to bar the action.
Gibson submitted four declarations in opposition to the motion, including the declaration of Gibson’s attorney, Paul S. Sigelman, who authenticated five attached exhibits. Exhibit 1 is an excerpt from the DM Family Trust, including the declaration of trust by the settlor, Dolores Mazzola, and the designation of Dolores as the primary beneficiary, with a class composed of Dolores, Gibson, and Reparata, as the income and principal beneficiaries. The trust sets forth the manner in which such income and principal is to be paid, and provides for the distribution of trust assets to Gibson and Reparata upon Dolores’s death.
Sigelman stated that exhibit 2 was the documentation for account No. 178080012, the same number that appears on the statements provided by Crutchley. The exhibit depicts a 1998 “Personal Account Signature Card,” signed by both Gibson and Reparata, with the notation, “closed,” handwritten on it, and a stamped notation stating that it superseded the 1997 signature card. The account title appears on the card as “DM family Trust,” with an address on Jefferson Boulevard in Culver City (Culver City address). The typed account No. 8030012225 is crossed out, and the No. 178080012 is handwritten to the left of it. Exhibit 3 consists of the January and February 1998 statements for that account, showing the same Culver City address for the trust.
Sigelman described exhibit 4 as a “true and correct copy of a check on the subject account in the amount of $70,000 signed by Delores Mazzola [sic] and bearing no other signature.” Sigelman’s statement that the check bears no other signature conflicts with the exhibit. Exhibit 4 is a copy of the front and back of a 2002 cancelled check (No. 1723), personalized with “DM Family Trust,” but no address, made payable to “Robert J. [or S.] Mazzola ITF Reparata Mazzola,” and endorsed by Robert and Reparata. Thus, Reparata’s signature appears on the back of the check.
Exhibit 5 is a copy of what appears to be a cashier’s check or money order dated April 12, 2002, payable to DM Family Trust, in the sum of $75,458. Copied on the same page is a document that appears to be a stub or receipt for the check, addressed to DM Family Trust c/o Robert Mazzola, on Tara Lane in Montville, New Jersey.
Gibson submitted his own declaration in which he stated he was a beneficiary of the trust, and a signatory of the subject bank account, which he opened with his business partner, Reparata, using the Culver City address. He stated that he signed a signature card in 1998, which required two signatures for withdrawals over $5,000. Gibson stated that during the time of his incarceration, the bank did not inform him that monies and account statements were being diverted to others without his signature or authorization. He claimed he never received any statements from the bank. Referring to the statements attached to Crutchley’s declaration, Gibson stated that “for reasons unknown, and unexplained by the bank” it sent all statements to the Passaic address. Gibson represented that neither he nor Reparata had ever resided or received mail at the Passaic address. Gibson also represented that neither he nor Reparata had ever resided or received mail at the Montville address, and that Robert was “not a signatory nor authorized to deal with the account.” Gibson stated that until February 2006, he was never informed that checks were being drawn on the account in excess of $5,000.
The complaint alleged that the two-signature requirement appeared in a later signature card signed in February or March 2001, but that card was not in evidence. In her declaration, Reparata also claims that the change was made in 2001. The 1998 signature card attached to Sigelman’s declaration as exhibit 2 does not contain that restriction.
Gibson also submitted Reparata’s declaration. She stated that she opened account No. 8030012225 in 1997, and added Gibson as cosignatory in 1998, when she and Gibson began depositing receipts from their joint business into the account. Reparata explained that the account number was changed from 8030012225 to 178080012 when the bank became HSBC. She stated that in February 2001, she and Gibson went to the bank together, requested that all withdrawals from the account in excess of $5,000 require two signatures, and signed new signature cards with that restriction. Referring to check No. 1723 (exh. 4 to Sigelman’s declaration), Reparata denied that signature on the check -- Dolores Mazzola’s -- was hers, or that her name was Dolores Mazzola. She stated that the next check (exh. 5 to Sigelman’s declaration) did not bear her signature, front or back, or Gibson’s signature. Reparata stated that after she was incarcerated in November 2001, she received no account statements from the bank.
The fourth declaration submitted by Gibson was that of Richard Mandell, who was employed as Gibson’s driver in 2001. Mandell recalled driving Gibson and Reparata to the bank in February 2001 and overhearing them request that all withdrawals over $5,000 require two signatures. Mandell also recalled that a bank employee gave them paperwork to sign for that purpose, and that they both signed.
On the day of the hearing on the motion, Gibson’s attorney filed an additional memorandum of points and authorities, with two exhibits attached. One exhibit was a copy of a letter dated June 19, 2006, from a bank officer stating that the bank would comply with Sigelman’s request of April 10, 2006, for copies of signature cards and cancelled checks for the DM Family Trust account No. 8030012225. The second exhibit was a copy of a cancelled personalized DM Family Trust check for $25,000, dated December 20, 2001, payable to an illegible payee, and apparently drawn by Reparata. The endorsement is illegible in this record.
The record was submitted in appellant’s and respondent’s appendices.
The trial court granted the motion after concluding that the action was barred by the three-year statute of limitations set forth in California Uniform Commercial Code section 4111. Judgment was entered May 14, 2008, and Gibson filed a timely notice of appeal.
DISCUSSION
“Every action must be prosecuted in the name of the real party in interest....” (Code Civ. Proc., § 367.) “Generally, the beneficiary of a trust, having no legal title or ownership interest in the trust assets, is not the real party in interest and may not sue in the name of the trust. [Citations.]” (Wolf v. Mitchell, Silberberg & Knupp (1999) 76 Cal.App.4th 1030, 1036.) “A trust beneficiary has no legal title or ownership interest in the trust assets; his or her right to sue is ordinarily limited to the enforcement of the trust, according to its terms. [Citation.]” (Saks v. Damon Raike & Co. (1992) 7 Cal.App.4th 419, 427.) It is up to the trustee to enforce the trust’s cause of action against a third party, and when the trustee cannot or refuses to do so, the beneficiary is limited to an action against the trustee. (Ibid.)
The issue of Gibson’s standing was not raised in the trial court. However, a plaintiff who never had standing in the trial court has no standing to appeal. (Code Civ. Proc., § 902; see also Marsh v. Mountain Zephyr, Inc. (1996) 43 Cal.App.4th 289, 295.) Standing to appeal is a jurisdictional defect. (McKinny v. Board of Trustees (1982) 31 Cal.3d 79, 90.) Thus, standing is a threshold issue to be resolved before this court can reach the merits of the appeal. (Blumhorst v. Jewish Family Services of Los Angeles (2005) 126 Cal.App.4th 993, 1000.)
Gibson’s evidence in opposition to the motion for summary judgment showed that he was the beneficiary of the DM Family Trust, an inter vivos trust naming Reparata and Dolores as cobeneficiaries. The settlor, Dolores, was designated as the original trustee. The action seeks funds paid from an account in the name of the trust by means of checks that were not signed by Gibson. Of the two such checks in evidence, one was made payable to Robert in trust for Reparata and endorsed by Reparata, and the other was made payable to the trust. Gibson brought the action as an individual, with no allegation that it was brought by the trustee or on behalf of the trust, and the trust was not made a party.
The bank contends that the account was not a trust account because the “Personal Account Signature Card” lists Gibson as a depositor, not a beneficiary, and the box for “Fiduciary” is not checked. Further, Reparata stated in her declaration that she had deposited receipts from her joint business with Gibson into the account, and the trust document does not show the account as part of the trust corpus. Similarly, Gibson contends that because the bank recognized him as the depositor and opened a personal account showing him as an authorized signatory on the account, the bank recognized him as the owner of the account.
The excerpt of the trust instrument incorporates by reference “Schedule A,” and states that the trust property is described there. However, Schedule A was not included in the excerpt.
Gibson cites Certified Grocers of California, Ltd. v. San Gabriel Valley Bank (1983) 150 Cal.App.3d 281, 286, for the rule that a bank is not liable to its depositor for the payment of checks drawn in conformity with the signature card, absent any knowledge of misappropriation. From this rule, Gibson reasons that because he was a signatory, the bank was required to allow him to withdraw the funds, and thus, he was an owner of the account with standing to sue for unauthorized withdrawals. Gibson argues that the name on the account is meaningless, except as a title he gave to the account. He could have, he suggests, named the account “Sam’s Rainy Day Account,” and he would still be the owner of the funds deposited.
However, Gibson did not open the account in the fictitious name of a nonexistent entity, and he is not suing the bank for dishonoring his signature. Gibson’s own evidence established that the DM Family Trust was an existing entity, that Dolores was the initial trustee, and that at least one of the withdrawals was made by Dolores. He established that beginning with the very first account statement issued after he signed the signature card, all were addressed to the DM Family Trust. The checks were personalized in the name of the DM Family Trust. Beginning in December 2000, the account statements were sent to the trust at an address in Los Angeles, and in August 2001, they were sent to the Passaic address. Both addresses were different from the signature card, and although Gibson claimed he never received a statement, he did not deem it necessary to inquire -- apparently of anyone, including Reparata -- until 2006.
In her declaration, Reparata -- Gibson’s cosignatory -- merely stated that she received no statements after her incarceration in November 2001, until her release in June 2004. The inescapable inference is that she received statements addressed to the trust at the Los Angeles address and the Passaic address prior to November 2001, when four of the disputed checks had already been written. The penultimate check written on the account was drawn by Dolores March 11, 2002, made payable to Robert “ITF” for Reparata, and endorsed by Reparata. The acronym “ITF” suggests that Robert was then a trustee of some trust of which Reparata was a beneficiary. The final check written on the account was made payable to the DM Family Trust in care of Robert. The most reasonable inference from these facts is that the title of the account, DM Family Trust, was not a fictitious name that Gibson pulled from the air, and that Gibson was not a trustee.
We permitted Gibson to file a motion to submit additional evidence on appeal. (Code Civ. Proc., § 909.) However, we now deny the motion. The evidence consisted of additional portions of the trust instrument (authenticated only by Sigelman), showing that Gibson was designated a successor trustee, contingent upon the prior trustee’s failure to qualify or act, and that, contrary to the excerpt that was in evidence before the trial court, the trust instrument appointed Reparata trustee in 1997, with the power to appoint a cotrustee. This evidence is irrelevant, as it does not show that Gibson is, or ever was, a trustee, or that this action was brought on behalf of the trust.
Both Gibson and the bank suggest that Gibson had standing to bring the action as a beneficiary and trustee, and that Gibson’s control over the account showed that he was acting as a trustee. The bank relies on Hassoldt v. Patrick Media Group, Inc. (2000) 84 Cal.App.4th 153, in which the plaintiffs had sued in their individual capacity for trespass to trust-owned property. Because the plaintiffs were the trustees and the beneficiaries of their trust, and had deeded the property to the trust, the court held they could maintain the action in their own names. (Id. at pp. 170-171.) Here, however, Gibson was not both a beneficiary and a trustee under the trust instrument, but merely a beneficiary, and he did not create the trust. Further, Gibson may have controlled the account with Reparata in 1998, but there is no evidence that he controlled the account in 2001 or at the time of filing this action.
The bank contends that dismissing the appeal would serve no purpose because the purpose of the real party in interest doctrine is to protect the true owner of the claim. The bank argues that because the statute of limitations has run -- as to Gibson or “anyone else” -- there is no need to protect the bank. The bank’s own argument states the very problem. Because “anyone else” is not a party to this action, such a universal resolution would give the bank, in essence, declaratory relief, which the appellate court cannot give. (Municipal Court v. Superior Court (Gonzalez) (1993) 5 Cal.4th 1126, 1132.)
Gibson suggests that the issue is merely one of capacity to sue, which is not a jurisdictional defect, and that he should be given the opportunity seek leave to amend the complaint to add a party with capacity. Capacity, however, refers to legal disability, such as minority or incompetency, not to standing. (American Alternative Energy Partners II v. Windridge, Inc. (1996) 42 Cal.App.4th 551, 559.) Standing is jurisdictional. (Marsh v. Mountain Zephyr, Inc., supra, 43 Cal.App.4th at p. 295.)
Moreover, Gibson does not claim that the complaint could be amended by substituting a party who has standing, as he must to avoid dismissal. (O’Flaherty v. Belgum (2004) 115 Cal.App.4th 1044, 1095.) To substitute a plaintiff with standing, the new plaintiff’s cause of action must be identical. (Id. at pp. 1095-1096; see also Diliberti v. Stage Call Corp. (1992) 4 Cal.App.4th 1468, 1470-1471.) Gibson has never claimed that the withdrawals were not authorized by the trustee of the DM Family Trust, and has not suggested that the trust ever had a cause of action against the bank.
We conclude that the Gibson has failed to show that he had standing to bring the action or that he has standing on appeal. We therefore dismiss the appeal.
DISPOSITION
The appeal is dismissed, and the matter is remanded to the trial court with directions to vacate the judgment and enter an order dismissing the action. Respondent HSBC Bank shall have costs on appeal.
We concur: RUBIN, ACTING P. J. BIGELOW, J.