Clark v. Smith - Case Brief

Case Number: G063394
Court: California Court of Appeal, Fourth Appellate District, Division Three
Date Filed: August 14, 2025

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Holding

The court held that Linda Clark, as the sole trustee of the Donald B. Clark & Linda Clark Revocable Trust, possessed standing to sue on the promissory notes transferred into the trust, and that no probate‑court authorization was required for a trustee to enforce such trust‑property claims. Consequently, the trial court’s judgment in favor of the defendants was reversed and the case remanded.

Trust‑Asset Enforcement and the Limits of Standing: A California Appeal Clarifies Trustee Powers

When a revocable inter‑vivos trust absorbs a settlor’s personal assets, the trustee’s authority to protect those assets can become a flashpoint—especially when the assets are non‑real property such as promissory notes. The Fourth Appellate District’s March‑2025 decision in Clark v. Smith resolves that flashpoint, confirming that a trustee may sue on behalf of the trust without first seeking probate‑court approval and that an oral amendment order, once affirmed in writing, suffices to establish standing.

Procedural backdrop

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 promissory notes—$50,000 for equipment and $920,000 for stock—both bearing a 2 % annual interest rate and a January 2018 payment start date. In mid‑2014 the Clarks restated their revocable trust, transferring “all real, personal, tangible, and intangible property”—including the notes—into the trust. Donald died in August 2015, leaving Linda Clark as sole trustee.

When Ordaz and Smith failed to make the first scheduled payments, Linda filed suit in Orange County Superior Court in November 2018, asserting the trust’s right to collect on the notes. The case was later consolidated with a counter‑claim filed by PASS. After a trial that stretched from May to June 2023, the defendants moved for nonsuit on the ground that Linda lacked standing. The trial court, after supplemental briefing, agreed and entered judgment for the defendants.

Linda appealed, arguing that (1) the trial court erred in finding her amendment insufficient to plead as trustee, (2) the notes, even if originally Donald’s separate property, became trust assets upon the 2014 restatement, and (3) no probate‑court order was required for a trustee to enforce a claim.

The appellate court’s analysis

1. The amendment was proper. Defendants contended that the oral permission to amend the complaint was not captured in a written order, rendering the amendment ineffective. The appellate court rejected that theory, noting that the trial judge both orally and in two subsequent minute orders expressly “allowed the amendment” and identified the operative complaint as filed by “Linda Clark, Trustee.” California law does not demand a separate written order when a judge’s oral ruling is later memorialized; the written minutes satisfied the procedural requirement.

2. The notes were trust property, giving the trustee standing. The court turned to the mechanics of property transfer into a revocable trust. Under California Probate Code §§ 15200(a)–(c) and Colorado Rev. Stat. § 15‑5‑401, a trust may be created by a declaration, a lifetime transfer, or a testamentary instrument. The Clarks’ restatement effected a general assignment of “all…property” to the trust. The appellate court cited Ukkestad v. RBS Asset Finance, Inc. (2015) 235 Cal.App.4th 156 and Kucker v. Kucker (2011) 192 Cal.App.4th 90, confirming that a general assignment of personal property is sufficient to transfer title, even when the property is not specifically enumerated.

Because the notes were expressly included in the catch‑all language of the trust, they passed into the trust estate regardless of whether they were originally Donald’s separate or community property. As trustee, Linda wielded the statutory powers to “prosecute or defend actions…for the protection of trust property” (Prob. Code § 16249(a); Colo. Rev. Stat. § 15‑5‑816(x)). Moreover, trustees have a fiduciary duty to make trust assets productive and to enforce claims (Prob. Code §§ 16007, 16010; Purdy v. Johnson (1917) 174 Cal. 521).

3. No probate‑court authorization was required. Defendants invoked the Estate of Heggstad (1993) 16 Cal.App.4th 943, arguing that a Heggstad petition was necessary to validate the transfer of the notes. The appellate court distinguished Heggstad, which dealt with real‑property transfers, noting that the notes are personal property and were transferred by a valid general assignment. Neither California nor Colorado statutes compel a trustee to seek court approval before suing on trust assets (Prob. Code § 16200(b); Colo. Rev. Stat. § 15‑5‑815(1)(b)(III)). The trust instrument itself expressly permitted the trustee to act “without prior approval from any court.”

Significance for practitioners

Clark v. Smith delivers three practical takeaways for California trust attorneys:

Amendments need not be filed on a separate docket sheet so long as the trial judge’s oral consent is later reflected in the official minutes. Counsel should ensure the judge’s language is captured in a written order to avoid later disputes.
A properly drafted general assignment can sweep all personal property—including promissory notes—into a revocable trust. When drafting restatements or amendments, be explicit that “all property” includes intangible assets, and retain the assignment instrument for evidentiary purposes.
Trustees may enforce claims without probate‑court involvement. The decision reaffirms that the probate avoidance purpose of revocable trusts extends to litigation; a Heggstad petition is unnecessary for personal‑property claims.

The remand signals that the trial court must now evaluate the merits of Linda’s collection claim, applying the same standards it would to any creditor of the trust. Defendants will likely contest the amount owed and the acceleration clause, but they can no longer rely on a jurisdictional standing defense.

Unresolved questions

While the court settled the standing issue, it left open the question of whether a trustee must disclose the trust’s identity in pleadings when suing on trust assets. The opinion cites Hassoldt v. Patrick Media Group (2000) 84 Cal.App.4th 153, which permits a trustee to sue in his own name without naming the trust, but the appellate court did not address whether a failure to do so could affect the adequacy of notice to defendants. Future litigation may refine that procedural nuance.

Referenced Statutes and Doctrines

California Probate Code §§ 15200, 62, 16007, 16010, 16200, 16249(a) – creation and powers of trustees, definition of property, duty to enforce claims.
California Code of Civil Procedure § 631.8 – motion for judgment (nonsuit).
Colorado Revised Statutes §§ 15‑5‑401, 15‑10‑201, 15‑5‑816(x), 15‑5‑815(1)(b)(III) – trust creation, definition of property, trustee powers.
General Assignment Doctrine – Ukkestad v. RBS Asset Finance, Inc. (2015) 235 Cal.App.4th 156; Kucker v. Kucker (2011) 192 Cal.App.4th 90.
Trustee Standing Cases – Purdy v. Johnson (1917) 174 Cal. 521; Moeller v. Superior Court (1997) 16 Cal.4th 1124; People v. Rogers (2013) 57 Cal.4th 296.
Heggstad Doctrine – Estate of Heggstad (1993) 16 Cal.App.4th 943 (real‑property transfers).
Procedural Precedents on Oral Orders – Pacific Home v. County of Los Angeles (1953) 41 Cal.2d 855; Diaz v. Professional Community Management, Inc. (2017) 16 Cal.App.5th 1190.