NOTICE: NOT FOR OFFICIAL PUBLICATION.

UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL

AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

WELLS FARGO BANK, N.A., Plaintiff/Appellee,

v.

ROBERT G. HOAG and the ROBERT G. HOAG REVOCABLE LIVING 

TRUST DATED JULY 15, 1992, Defendants/Appellants.

No. 1 CA-CV 15-0559

Appeal from the Superior Court in Maricopa County

No. CV2014-003768

The Honorable Colleen L. French, Judge Pro Tem

AFFIRMED IN PART AND VACATED IN PART

COUNSEL

Jaburg & Wilk PC, Phoenix

By Kathi M. Sandweiss and Roger L. Cohen

Counsel for Plaintiff/Appellee

Wallin Hester PLC, Gilbert

By Chad A. Hester

Counsel for Defendants/Appellants
WELLS FARGO v. HOAG, et al.

Decision of the Court

2

MEMORANDUM DECISION

Presiding Judge Andrew W. Gould delivered the decision of the Court, in 

which Judge Peter B. Swann and Judge Patricia A. Orozco joined.

G O U L D, Judge:

¶1 Appellants Robert G. Hoag and the Robert G. Hoag Revocable 

Living Trust Dated July 15, 1992 (the “Hoag Trust”) appeal the superior 

court’s grant of summary judgment in favor of Wells Fargo. For the 

following reasons, we affirm in part and vacate in part.

FACTS AND PROCEDURAL BACKGROUND

¶2 Between 1994 and 2000, Robert C. Hoag created three 

irrevocable charitable remainder unitrusts (“CRUTs”).

1 Hoag funded the 

CRUTs with his own stock, and administered the CRUTs as trustee until 

2014. The CRUTs provide that Hoag is entitled, “as beneficiary during his 

lifetime,” to monthly distributions based on a set percentage of the “net fair 

market value” of each CRUT. 

¶3 The CRUTs contain a spendthrift provision stating that

“[n]either the principal nor the income of the Trust shall be liable for the 

debts of any beneficiary, nor shall the same be subject to seizure by any 

creditor of any beneficiary under any lien or proceeding at law or in 

equity.” The spendthrift provision also states that “no beneficiary 

hereunder shall have any power to sell, assign, transfer, encumber or in any

other manner to anticipate or dispose of his, her, or its interest in the trust 

estate or the income produced thereby.” 

 

1 A CRUT is an irrevocable trust created pursuant to 26 U.S. Code § 

664 of the Internal Revenue Code (the “IRS Code”) with three primary 

characteristics: 1) one or more persons receive payments equal to at least 

5% and no more than 50% of the annual value of the trust property for a 

term of years (not in excess of 20 years) or for the life or lives of such 

individual or individuals; 2) a tax credit for the donation; 3) upon the 

termination of the payments, the remaining balance of the trust is 

distributed to qualifying charities. See 26 U.S.C.A. § 664 (d)(2)(A) – (C) 

(2015). 
WELLS FARGO v. HOAG, et al.

Decision of the Court

3

¶4 In 2012, Wells Fargo obtained a $2.5 million default judgment 

against Hoag personally and against the Hoag Trust. In December 2013, 

Wells Fargo initiated garnishment proceedings to satisfy its judgment. In 

February 2014, Hoag resigned as trustee of the CRUTs, and appointed 

IBMC, a corporation organized under the laws and operating out of the 

Bahamas, as successor trustee. As trustee, IBMC now makes the monthly 

income distribution payments to Hoag as required by the terms of the 

CRUTs. 

¶5 Wells Fargo filed its current lawsuit in June 2014, alleging that 

Hoag fraudulently concealed his assets by transferring them to the CRUTs. 

In Count Seven of its complaint, Wells Fargo sought declaratory relief, 

requesting the superior court (1) declare the spendthrift provisions of the 

CRUTs invalid, and (2) declare that Wells Fargo is entitled to attach Hoag’s 

distributions from the CRUTs. 

¶6 After filing its complaint, Wells Fargo moved for summary 

judgment as to Count Seven. In addition to seeking an order declaring the 

spendthrift provisions of the CRUTs invalid, Wells Fargo also moved the 

court to enjoin “Hoag and the Hoag Trust from preventing Wells Fargo 

from garnishing, attaching, executing on or otherwise receiving income 

from the CRUTs.” 

¶7 The superior court granted Wells Fargo’s motion, declaring 

the spendthrift provisions in the CRUTs “invalid and ineffective as to Wells 

Fargo's claims against Hoag and the Hoag Trust.” Additionally, the court

enjoined Hoag, the Hoag Trust, and anyone acting for or on their behalf, 

from preventing Wells Fargo “from garnishing, attaching, executing on or 

otherwise receiving income from [the CRUTs].” Hoag timely appealed. 

DISCUSSION

¶8 Hoag argues the superior court erred by declaring the 

spendthrift provisions of the CRUTs invalid. In addition, Hoag contends 

the superior court erred by granting injunctive relief to Wells Fargo. 

¶9 We review the superior court’s grant of summary judgment

de novo. Martineau v. Maricopa Cty., 207 Ariz. 332, 334, ¶ 8 (App. 2004). 

Additionally, we review the trial court’s construction of statutes and 

written instruments de novo. In re Indenture of Trust Dated January 13, 1964, 

235 Ariz. 40, 44, ¶ 7 (App. 2014) (citation omitted); State Comp. Fund v. 

Superior Court In & For Cty. of Maricopa (EnerGCorp, Inc.), 190 Ariz. 371, 374 

(App. 1997) (citation omitted). 
WELLS FARGO v. HOAG, et al.

Decision of the Court

4

I. Spendthrift Provisions 

¶10 The CRUTs expressly provide that “[t]he operation of the 

[CRUTs] shall be governed by the laws of the State of Washington.” As a 

result, we look to Washington state law to determine if the spendthrift 

provisions are valid. See Ariz. Rev. Stat. (“A.R.S.”) § 14-10107 (“The 

meaning and effect of the terms of a trust are determined by the law of the 

jurisdiction designated in the terms of the trust instrument.”).2 

¶11 Under Washington state law, a valid spendthrift provision 

may protect trust property from a creditor. See Erickson v. Bank of California, 

N. A., 643 P.2d 670, 672 (Wash. 1982); Milner v. Outcalt, 219 P.2d 982, 984 

(Wash. 1950) (citation omitted). However, pursuant to Revised Code of 

Washington (“R.C.W”), section 6.32.250, this protection only includes trust 

property “held in trust for a judgment debtor where the trust has been 

created by, or the fund so held in trust has proceeded from, a person other 

than the judgment debtor . . . ”. (emphasis added).

¶12 The plain text of R.C.W. § 6.32.250 states that a spendthrift 

provision is invalid as to a settlor who creates a trust. See State v. Riggs, 189 

Ariz. 327, 333 (1997) (holding that if the language of the statute is clear and 

unambiguous, a court will give effect to that language and not use other 

methods of statutory construction); State v. Roggenkamp, 106 P.3d 196, 199 

(Wash. 2005) (same). Indeed, other courts interpreting Washington law 

have reached the same conclusion. For example, in Erickson, the court 

concluded that R.C.W. 6.32.250 has “the practical effect of making every 

trust in Washington established for a beneficiary other than a settlor a valid 

spendthrift trust.” Erickson v. Bank of California, 623 P.2d 721, 725 (citation 

omitted) (emphasis added). Similarly, In re White, 61 B.R. 388 (Bankr. W.D. 

Wash. 1986) held that pursuant to R.C.W. § 6.32.250, a valid spendthrift 

trust “must be funded by, or proceed from, a settlor other than the 

beneficiary. The settlor cannot create a spendthrift trust for his own benefit 

 

2 Although the parties address the validity of the spendthrift 

provisions under both Arizona and Washington law, neither party disputes 

the validity of the choice of law provision. Additionally, while the superior 

court did not specify that it was applying Washington law in declaring the 

spendthrift provisions invalid, we will uphold the superior court decision 

for any reason supported by the record. See S & S Paving & Const., Inc. v. 

Berkley Reg'l Ins. Co., 239 Ariz. 512, 514, ¶ 7 (App. 2016) (citation omitted) 

(stating we will affirm a court’s granting of summary judgment “if it is 

correct for any reason”). 
WELLS FARGO v. HOAG, et al.

Decision of the Court

5

and thereby place his property beyond the reach of his creditors . . .” Id. at

392 (citations omitted). 

¶13 Here, Hoag created the CRUTs with his own funds, and made 

himself one of the trust beneficiaries. Therefore, the spendthrift provisions 

of the CRUTs are invalid as to Hoag’s distributions from the CRUTs 

pursuant to R.C.W. § 6.32.250.

3 

¶14 Hoag argues, however, that R.C.W. § 6.32.250 does not apply 

to CRUTs or trusts that have more than one beneficiary. We disagree; there 

is no language in the statute supporting this construction, and we are “not 

at liberty to rewrite the statute under the guise of judicial interpretation.” 

State v. Patchin, 125 Ariz. 501, 502 (App. 1980); see Ballesteros v. Am. Standard 

Ins. Co. of Wis., 226 Ariz. 345, 349, ¶ 17 (2011) (same). 

¶15 Accordingly, the spendthrift provisions are invalid under 

Washington law, and we affirm the superior court’s judgment granting 

declaratory relief to Wells Fargo. 

II. 26 U.S.C.A. § 664(d)(2) (Charitable Remainder Unitrust)

¶16 Hoag also argues the superior court erred in ruling the 

spendthrift provisions are invalid because the IRS Code does not authorize 

the distribution of any of the assets of a CRUT to anyone other than Hoag, 

the income beneficiary, or a qualified charity. See 26 U.S.C.A. § 664(d)(2)(B).

¶17 The IRS Code does not insulate CRUT settlors from their 

creditors. In analyzing 26 U.S.C.A. § 664(d)(2), we find In re Mack, 269 B.R. 

392 (Bankr. D. Minn. 2001) persuasive. One of the issues in Mack was 

whether in passing the statute Congress intended to prohibit alienation of 

a noncharitable interest in a CRUT so as to protect settlors from creditors. 

See id. at 399, 412. The bankruptcy court concluded that Congress did not 

intend a CRUT to be “a way for settlors of these trusts to avoid paying their 

creditors.” Id. at 399. The court noted that any mandate that a settlor’s

interest in a CRUT be placed beyond the reach of creditors is conspicuously 

absent from section 664. Id. at 403. The court reasoned that if Congress 

 

3 We stress that the only issue before us is whether the subject 

spendthrift provisions prohibit Wells Fargo from seizing or attaching 

Hoag’s distributions from the CRUTs; the interests of other beneficiaries, as 

well as Wells Fargo’s ability to reach other property held in the CRUTs is 

not before us in this case. 
WELLS FARGO v. HOAG, et al.

Decision of the Court

6

wanted to impose such a requirement, it knew how to draft such language.

4 

Id. at 403. Further, the court reasoned that whether a creditor can reach a 

settlor’s income “is of no consequence to the purpose of encouraging the 

formation of CRUTS, that is charitable giving,” because the charitable 

remainder of a CRUT remains protected from creditors. Id. at 412. 

¶18 Therefore, we conclude 26 U.S.C.A. § 664(d)(2) does not 

prohibit Wells Fargo from reaching Hoag’s noncharitable beneficiary 

interest paid to him in the CRUTs. 

III. Injunction

¶19 In granting Wells Fargo’s motion for declaratory relief, the 

court also enjoined “Hoag and the Hoag Trust” and their agents “from 

preventing Wells Fargo from garnishing, attaching, executing on or 

otherwise receiving income from [the CRUTs].” 

¶20 In its motion, Wells Fargo only sought declaratory relief

concerning the validity of the spendthrift provisions. However, at the end 

of its motion, Wells Fargo also requested an injunction against Hoag and 

the Hoag Trust. Then, after the court granted partial summary judgment, 

Wells Fargo proposed additional language enjoining Hoag’s agents, which 

the court adopted in its judgment. 

¶21 The court’s broad injunction went beyond the court’s limited 

finding that the spendthrift provisions were invalid; therefore, Wells Fargo 

is not entitled to the injunction as a matter of law. Specifically, the superior 

court declared the spendthrift provisions invalid as to Wells Fargo’s claims 

against Hoag and the Hoag Trust. Consequently, the injunction should 

have been limited to prohibiting the use of the spendthrift provisions to 

prevent Wells Fargo from reaching Hoag’s beneficiary interest in the 

CRUTs. Even though the court had only ruled on the validity of the 

spendthrift provisions, the court in effect determined that Hoag, the Hoag 

Trust, and “anyone acting for or on their behalf” have no legal basis to 

 

4 The court provided as an example, 29 U.S.C.A. § 1053(e)(1) (ERISA), 

which states that “If the present value of any nonforfeitable benefit with 

respect to a participant in a plan exceeds $5,000, the plan shall provide that 

such benefit may not be immediately distributed without the consent of the 

participant.”). In re Mack, 269 B.R. at 403 n.11.

 
WELLS FARGO v. HOAG, et al.

Decision of the Court

7

prevent Wells Fargo from reaching Hoag’s beneficiary interest. Thus, the 

injunction was too broad in scope. 

¶22 Moreover, Hoag also argues the injunction is improper 

because it binds parties that are not subject to the superior court’s 

jurisdiction, namely, the trustee of the CRUTs. We agree. As we previously 

ruled in Hoag v. French, 238 Ariz. 118, 124, ¶ 29 (App. 2015), as amended (Sept. 

2, 2015), review denied (Feb. 9, 2016), the superior court does not have

personal jurisdiction over IBMC. As a result, the injunction is void as to 

IBMC.

CONCLUSION 

¶23 For the above reasons, we affirm the superior court’s 

judgment declaring the spendthrift provisions of the CRUTs invalid. 

However, we vacate, without prejudice, the court’s orders imposing an 

injunction on Hoag, the Hoag Trust, or the agents of Hoag and the Hoag 

Trust.