Filed 5/21/19

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

SUNNIE H. HAN, as Special 

Administrator, etc., et al.,

Plaintiffs and Appellants,

v.

RICHARD HALLBERG, Jr., as 

Trustee, etc.,

Defendant and Appellant.

 B268380

 

 (Los Angeles County

 Super. Ct. No. SC114026)

APPEALS from a judgment and an order of the Superior 

Court of Los Angeles County. Norman P. Tarle, Judge.

Judgment and order reversed.

Prince & Heuer and Henry T. Heuer for Plaintiffs and 

Appellants. 

Horvitz & Levy, Jeremy B. Rosen, Shane H. McKenzie; 

Law Office of Richard D. Teitel, Richard D. Teitel; Law Office of 

Peter A. Gelles and Peter A. Gelles for Defendant and Appellant.

__________________________
2

SUMMARY

In 1975, four dentists formed a partnership to acquire and 

maintain a dental office building. In 1994, the then-partners 

amended their agreement to allow one of the partners, 

Dr. Richard Hallberg, to assign his partnership interest to his 

living trust, and to substitute the trustee (then Dr. Hallberg) as a 

general partner in place of Dr. Hallberg individually. When 

Dr. Hallberg died 15 years later, litigation ensued over whether, 

despite the substitution, Dr. Hallberg was still a partner at the 

time of his death, triggering certain buyout provisions that 

applied in the event of a partner’s death.

The trial court concluded the trust was not a separate legal 

entity, and that Dr. Hallberg was a partner at the time of his 

death. The court stated it was required to follow Presta v. Tepper 

(2009) 179 Cal.App.4th 909, 918 (Presta) (“when a trustee of an 

ordinary express trust enters into a partnership relationship in 

his capacity as trustee, it is he, and not ‘the trust’ which is the 

party to that agreement”). 

We conclude Dr. Hallberg was not a partner when he died. 

His trust, or the trustee of his trust, was the partner. While a 

trust cannot act in its own name and must always act through its

trustee, a trust is a “person” that may associate in a partnership

under the Uniform Partnership Act of 1994 (UPA; Corp. Code, 

§ 16100 et seq.), based on the plain language of the UPA’s 

definition of “person.” The clear statutory language is reinforced 

by other provisions of the statute, as well as by its legislative 

history. We see no contradiction between the terms of the UPA 

and California trust law, and to the extent Presta suggests 

otherwise, we disagree. Accordingly, we reverse the trial court’s 

judgment. 
3

FACTS

1. The Background

In 1975, four dentists formed a general partnership called 

SM-Ensley Dental Group, for the purpose of “acquiring, operating 

and maintaining a dental office building.” The 1975 partnership 

agreement required partners to be practicing dentists.

In 1989, the partners amended the agreement’s provisions 

on withdrawal, retirement or death of a partner. These 

amendments allowed the estate of a deceased partner to retain 

the interest of the deceased partner and to continue operation of 

the partnership. This could be done by notifying the surviving 

partners in writing, by first-class mail, “within not more than 

90 days from the date of death . . . .”

1 If the estate failed to 

exercise this option within 90 days, the surviving partners could 

opt to purchase the interest of the deceased partner by notifying 

the estate, “within 60 additional days,” by a writing sent “by firstclass mail, to the representative of the deceased partner . . . .”2 

 

1 The 1989 amendments stated: “In the event of the death of 

any partner during the term of this partnership, the operation of 

the partnership shall continue if the estate of the deceased 

partner, either by his personal representative or successor

trustee, within not more than 90 days from the date of death, 

notifies the surviving partners in writing, by first-class mail, of 

the election of the estate to retain the interest of the deceased 

and to continue operation of the partnership on behalf of the 

estate or its distributees, which shall be subject to all of the 

obligations to the partnership of the deceased partner.” 

2 The 1989 amendments stated: “In the event the personal 

representative or the successor trustee of the deceased partner 

fails to exercise such option by giving notice to the surviving 

partners within 90 days, as specified hereinabove, the surviving 
4

The 1989 amendments also provided for the valuation of the 

deceased partner’s interest “by the appointed California Probate 

Referee in any probate proceedings . . . .”

3 If the remaining 

partners elected not to purchase the interest of the deceased 

partner, the partnership assets were to be “distributed in kind to 

each of the partners or to their respective personal 

representatives or trustees according to their respective 

interests,” and governed by the law relating to tenants in 

common. 

In 1990, Eric L. Loberg became a partner. In 1994, the 

general partners were John Schrillo (26 percent), Richard W. 

 

partners shall thereafter, within 60 additional days, have the 

option to continue the partnership business and purchase the 

interest of the deceased partner, which option may be exercised 

by said remaining partners by giving notice of the exercise of 

such option to the deceased partner’s estate by a writing sent, by 

first-class mail, to the representative of the deceased partner, at 

a price and on the terms and conditions hereinafter set forth.” 

3 The 1989 amendments stated: “In the event of the death of 

a partner during the term of this partnership agreement, the 

valuation of his interest for the purchase by the remaining 

partners shall be equal to the value fixed by the appointed 

California Probate Referee in any probate proceedings or trust 

termination in said deceased partner’s estate as reduced by an 

amount equal to 7% of the gross valuation, the deceased partner’s 

debts to the partnership and said deceased partner’s share of the 

partnership debts. If no appointment is made within 90 days of 

the date of death, the remaining partners shall request the 

appointment of such referee as a non-probate matter, which 

value shall be binding upon both the heirs of the deceased 

partner and the remaining partners as hereinabove set forth.” 
5

Hallberg (26 percent), John F. Griffee (24 percent), and Eric L. 

Loberg (24 percent). 

On September 12, 1994, the four partners again amended 

the partnership agreement, this time to allow a substitution for 

one of the general partners, Dr. Hallberg. The amendment 

recited that the partnership agreement “contain[ed] no provisions 

dealing with the assignment of partnership interests or the effect 

upon the Partnership in the event of a substitution of a general 

partner.” The parties then agreed to the assignment of 

Dr. Hallberg’s partnership interest to Dr. Hallberg as trustee of 

The Richard W. Hallberg Trust (the Hallberg Trust), as follows:

“The assignment of RICHARD W. HALLBERG’s 

partnership interest to RICHARD W. HALLBERG, as 

Trustee of THE RICHARD W. HALLBERG TRUST, shall 

not cause a dissolution of the partnership. Upon the 

consent of all general partners, RICHARD W. HALLBERG, 

as Trustee of THE RICHARD W. HALLBERG TRUST, 

shall be substituted as a general partner in place of 

RICHARD W. HALLBERG, individually, provided that 

such Trustee agrees in writing to be bound by the terms 

and conditions of the Partnership Agreement and that such 

Trustee accepts and assumes the rights, benefits, 

responsibilities, and liabilities of the assignor general 

partner.” 

All four general partners consented to “the substitution of 

RICHARD W. HALLBERG as Trustee of THE RICHARD W. 

HALLBERT TRUST, under Declaration of Trust dated August 4, 

1994, as general partner in place of RICHARD W. HALLBERG, 

individually.” And Dr. Hallberg, “as trustee of THE RICHARD

W. HALLBERG TRUST,” agreed “to be bound by the terms and 
6

conditions” of the partnership agreement, and “accept[ed] and 

assume[d] the rights, benefits, responsibilities, and liabilities of 

RICHARD W. HALLBERG, individually, as a general partner in 

said partnership.” 

In 2002, Dr. Loberg acquired Dr. Griffee’s 24 percent 

partnership interest.

In 2003, Dr. Hallberg appointed his son, Richard Hallberg 

Jr. (Hallberg Jr.) to serve as a cotrustee of the Hallberg Trust. 

In 2009, Hallberg Jr. became the sole trustee of the 

Hallberg Trust. (Hallberg Jr. apparently did not realize he was 

the sole trustee until after the first phase of the court trial in this 

case.) 

On March 16, 2010, Dr. Hallberg died. 

If Dr. Hallberg were still a partner when he died, then the 

partnership agreement would give his estate 90 days (until 

June 14, 2010) to notify the surviving partners “of the election of 

the estate to retain” the deceased partner’s interest and to

continue operation of the partnership “on behalf of the estate or 

its distributees.” No such notification was made, by June 14 or 

any later time. 

On June 16, 2010, Dr. Schrillo sent Hallberg Jr. various 

partnership documents and information he had requested, 

including the partnership agreement and amendments and 

information on rentals, bank accounts, the mortgage, and so on, 

also stating that copies of the documents “should be among your 

father’s papers.” 

If Dr. Hallberg were still a partner when he died, and his 

estate failed to exercise its option to continue the partnership, 

then the partnership agreement would give the surviving 

partners the option, within 60 additional days (until August 13, 
7

2010), to continue the partnership business and purchase

Dr. Hallberg’s interest, by giving notice “to the deceased partner’s 

estate by a writing sent, by first-class mail, to the representative 

of the deceased partner.”

On August 3, 2010, counsel for Drs. Loberg and Schrillo 

wrote to Hallberg Jr., giving “formal notice that the surviving 

partners hereby exercise their option to purchase the interest of 

Dr. Richard Hallberg, deceased,” in the partnership. 

On August 17, 2010, Hallberg Jr.’s lawyer responded to the 

August 3, 2010 letter, referring, in pertinent part, to the 1994 

amendment to the partnership agreement “relating to transfer of 

Dr. Hallberg’s partnership interest to the Richard W. Hallberg 

Trust.” 

On August 31, 2010, Dr. Loberg and Dr. Schrillo 

themselves sent a “second notice” of their exercise of “[their]

option to purchase the interest of Dr. Richard Hallberg, 

deceased,” in the partnership. 

On October 12, 2010, Hallberg Jr. wrote to Drs. Loberg and 

Schrillo, responding to their August 31, 2010 letter. Among other 

things, he stated the partnership interest was owned by the 

Hallberg Trust; and for that and other reasons, the letter was not 

a valid exercise “of any option you might or might not otherwise 

have had to purchase the Trust’s Partnership Interest.” 

Hallberg Jr. stated the Hallberg Trust was not obligated to sell 

its partnership interest, “and that instead, pursuant to [the]

Partnership Agreement, the Partnership property is required to 

be distributed to the remaining valid Partners, as tenants in 

common.” 
8

2. The Complaint

On September 6, 2011, Drs. Loberg and Schrillo (plaintiffs) 

filed a complaint against Hallberg Jr. as successor trustee of the 

Hallberg Trust (defendant).

4 The complaint recited that, after 

exhaustive discussions, the parties were unable to agree on 

terms, including the price, “to buy-out the interest of the Hallberg 

Trust.” The complaint sought appointment of a probate referee 

for evaluation of the interest of the Hallberg Trust in the 

partnership; a mandatory injunction requiring defendant to 

comply with the buyout terms of the partnership agreement; and 

declaratory relief. A fourth cause of action sought damages for 

defendant’s alleged breach of the partnership agreement.

3. The Trial

On July 9 and 10, 2012, the court held a bench trial on the 

three bifurcated equitable claims, and issued a tentative decision 

in October 2012. We briefly summarize the proceedings 

pertinent to our resolution of this appeal.

The court held that the Hallberg Trust was not “a separate 

legal entity that continues to own a partnership interest,” and 

“[t]he partner in this case was Dr. Hallberg.” The court observed 

that defendant’s effort to distinguish the Presta case was “valiant 

but unavailing,” and that the court was required to follow Presta.

The court ordered the matter to proceed to the appointment 

of a referee for valuation of the deceased partner’s interest.

In November 2012, defendant sought reconsideration or a 

new trial, principally because he had discovered that the 

 

4 During this litigation both plaintiffs died, and Sunnie H. 

Han, as special administrator of the estate of Dr. Loberg, and 

Dr. Schrillo’s wife, Kathryn Schrillo, as special administrator of 

his estate, were substituted as plaintiffs. 
9

Hallberg Trust had been restated in 2009 and that he was, at the 

time of his father’s death, the sole trustee. He contended his 

father therefore was not the holder of the partnership interest, 

either as an individual or as trustee, on the date of his death. 

The court permitted defendant to provide additional trial 

testimony and evidence, and allowed further briefing by the 

parties. These proceedings occurred in June and July 2013.

In a supplemental tentative decision in July 2013, the court

adhered to its previous ruling for the plaintiffs. The court viewed

the 1994 amendment “against [the] background” that all the 

partners had been dentists and close friends, not legal 

professionals, and “the only reference to a trustee in any of the 

partnership documents . . . is the 1994 amendment.”5 The court 

stated it “appears clear that based upon their familiarity and 

mutual trust,” and “[w]hen read in the context of the full 

agreement and the relationship of the partners, it would appear 

that the individual partners expected to have some control over 

which person they would be dealing with in managing the 

partnership.”

The court also found that Dr. Loberg’s testimony “which the 

defense brushes aside as self-serving,” also corroborated the 

court’s interpretation. (Dr. Loberg testified “ ‘that this was a 

method for Dr. Hallberg to avoid probate and some taxes.’ ” The 

 

5 The court observed there were two references to trustees in 

the 1989 amendment, but these “presumably refer[red] to 

testamentary trustees.” 
10

court found this testimony “conforms to this general sense of the 

1994 amendment, but also is in line with the Presta holding.”)6

Litigation then continued over the appointment of a referee 

and the appraisal of “the ‘Hallberg 26% Interest’ ” in the 

partnership. In February 2014, the court appointed a referee and 

required the referee to value the real property “as a Dental Office 

Building in accord with the purpose of the partnership . . . and 

the historical use of the building, rather than its ‘highest and 

best use.’ ” 

Five months later (during which there was further 

litigation over communication with the referee and the 

information he could consider), the referee valued the fee simple 

interest in the real estate, as of July 27, 2014, at $3.7 million. 

More litigation followed, with defendant objecting to the referee’s 

report. In February 2015, the trial court stated its agreement 

with the referee’s recommended valuation, and its intention to 

permit the parties to raise issues still to be resolved that were not 

part of the referee’s valuation. 

In a second phase of the trial that took place in May 2015, 

the court found no breach of contract, observing that defendant

was not a partner or signatory to the partnership agreement, 

which did not require defendant’s agreement for the appointment 

 

6 Dr. Loberg also testified that he never contemplated “at 

any time up until today [June 19, 2013] that [he] would under 

some circumstance be partners with somebody that’s a non 

dentist with respect to the building.” (This cannot be so, because 

as of 1989, the partnership agreement itself contemplated that 

the estate of a deceased partner could retain the partnership 

interest of a deceased partner.) 
11

of a probate referee. The court found the buyout amount owed to 

defendant was $723,366.7

Judgment was entered on October 7, 2015.

Defendant filed an appeal and plaintiffs filed a crossappeal. 

In postjudgment proceedings, the court awarded certain 

attorney fees and costs in favor of plaintiffs. Defendant filed an 

appeal from the trial court’s order, and plaintiffs filed a crossappeal.

 We ordered the appeals from the judgment and the 

postjudgment order consolidated into a single appeal.

DISCUSSION

1. Appellate Motions

Defendant filed a motion for judicial notice along with his 

opening brief. He requested judicial notice of legislative history 

materials relating to the UPA, and of complaints in two lawsuits 

relating to the partnership filed in 2001 and 2012. We grant the 

motion as to the legislative history materials,8 and deny it as to 

the complaints; the latter are irrelevant to our decision.

 

7 The buyout amount consisted of 26 percent of the referee’s 

property valuation of $3.7 million, reduced by 7 percent as 

required by the partnership agreement, and further reduced by 

$171,294 in debts (for the mortgage, loans from partners, and 

certain disputed expenses for improvements to the building). 

8 Plaintiffs opposed defendant’s request for judicial notice, 

contending the materials are irrelevant to the issues on appeal; 

the request did not state whether judicial notice was taken by the 

trial court; courts generally do not take judicial notice of evidence 

not presented to the trial court; and the materials “would require 

an undue expenditure of time for review.” A reviewing court has 
12

Plaintiffs filed a motion to strike portions of defendant’s 

appendix, contending the appendix includes five documents that 

were not filed, admitted, marked for identification, or lodged with 

the trial court. These include four inconsequential documents 

that plaintiffs themselves state were contained in the exhibit 

books defendant and plaintiffs brought to trial (two in 

defendant’s exhibit book and two in plaintiffs’ exhibit book). The 

fifth document plaintiffs want to strike is referee Keith Settle’s 

2014 appraisal – over which the parties litigated for months, and 

which is the basis for the buyout amount ordered in the judgment 

on appeal. We find plaintiffs’ motion baffling and pointless, and 

no legal authority requires us to grant it. We accordingly deny it, 

and turn to the merits of the appeals.

2. Defendant’s Appeal

Defendant raises four claims of error on appeal. Because 

our conclusion on the first claim is dispositive, we do not consider 

defendant’s other challenges to the judgment and postjudgment 

order. 

As indicated at the outset, we cannot agree with the trial 

court’s ruling, stated in the judgment, that “[a]t the time of his 

death, Richard Hallberg, Sr., was one of three partners in the 

SM-Ensley Dental Group partnership, and he held a 26% interest 

in the partnership.” On the contrary, we find it incontrovertible 

that Dr. Hallberg individually was not a partner when he died. 

That much is clear from the express terms of the 1994 

amendment to the partnership agreement. The four then-

 

the authority to take judicial notice of matters not before the trial 

court (Brosterhous v. State Bar (1995) 12 Cal.4th 315, 325), and 

plaintiffs’ proffered reasons for not doing so are not persuasive.
13

partners expressly consented to “the substitution of 

[Dr. Hallberg] as Trustee of [the Hallberg Trust] as general 

partner in place of [Dr. Hallberg] individually.” (Italics added.) 

And Dr. Hallberg, “as trustee of [the Hallberg Trust],” agreed to 

be bound by the terms of the partnership agreement and 

assumed “the rights, benefits, responsibilities, and liabilities” of 

Dr. Hallberg individually “as a general partner.” 

We cannot ignore the express substitution of Dr. Hallberg 

as trustee “in place of [Dr. Hallberg] individually.” The holder of 

the partnership interest, for the 15 years before and at the time 

of Dr. Hallberg’s death, was the trustee of the Hallberg Trust –

not Dr. Hallberg individually. That did not change when 

Dr. Hallberg died. The whole point of the assignment of 

Dr. Hallberg’s partnership interest to the trust was to avoid 

having the partnership interest pass to Dr. Hallberg’s estate 

when he died. Accordingly, we will not pretend the substitution 

of general partners in 1994 did not happen. 

 That brings us to the legal point at issue: the claim that, 

because an express trust under California law is not “an entity 

separate from its trustee[],” a trust like the Hallberg Trust is not 

a “person” that can participate in a partnership. We do not 

agree. California’s UPA plainly contemplates the opposite result, 

and we do not find Presta’s contrary assessment persuasive.

Our analysis begins with the UPA and general trust 

principles, followed by an explanation of our differences with 

Presta and the arguments raised by plaintiffs.

a. Trust principles and the UPA

Case precedents have long stated that under California 

law, “a trust is not a person but rather ‘a fiduciary relationship

with respect to property,’ ” and “ ‘ “ ‘an ordinary express trust is 
14

not an entity separate from its trustees.’ ” ’ ” (Moeller v. Superior 

Court (1997) 16 Cal.4th 1124, 1132, fn. 3 (Moeller).) Thus, for 

example, a trust cannot sue or be sued or otherwise act in its own 

name; instead the trustee acts on behalf of the trust. (E.g., 

Powers v. Ashton (1975) 45 Cal.App.3d 783, 787.) Similarly, an 

estate is not considered a traditional legal entity. (See Estate of 

Bright v. Western Air Lines, Inc. (1951) 104 Cal.App.2d 827, 828

[“An ‘estate’ is not a legal entity and is neither a natural nor 

artificial person.”].)

But the fact that a trust is a “relationship” and not an 

entity separate from its trustees does not mean that a trust 

cannot act – as always, through its trustee – as a partner under 

general partnership law. California’s UPA expressly provides 

that a trust may associate in a partnership.

Under the UPA, a partnership is “an association of two or 

more persons,” and the term “person” is defined to include a 

“trust.” (Corp. Code, § 16101, subds. (9) & (13).) Specifically, the 

UPA defines a person as “an individual, corporation, business 

trust, estate, trust, partnership, limited partnership, limited 

liability partnership, limited liability company, association, joint 

venture, government, governmental subdivision, agency, or 

instrumentality, or any other legal or commercial entity.” (Id.,

subd. (13).) Thus, the statute on its face includes both a 

“business trust” and a “trust” among the “person[s]” that may 

associate in a partnership.9

 

9 In practice, family trusts do form partnerships. While no 

legal challenge was at issue, there are references in California 

cases to living trusts acting as partners in California 

partnerships. (See, e.g., Stoltenberg v. Newman (2009) 

179 Cal.App.4th 287, 290, 293 [referring to a family trust that 
15

The plain definitional language of the UPA is, in our view 

controlling. And other provisions of the UPA – specifically the 

provisions identifying the events that dissociate a partner from 

the partnership (Corp. Code, § 16601) – further show that the 

statute contemplates no termination of partnership status when 

the trustee of a trust is replaced or dies. 

Section 16601 of the UPA states that a partner is 

dissociated from a partnership “upon the occurrence of any of the 

following events.” (Corp. Code, § 16601.) Those include, “[i]n the 

case of a partner who is an individual,” the partner’s death. (Id., 

subd. (7)(A).) And, “[i]n the case of a partner that is a trust or is 

acting as a partner by virtue of being a trustee of a trust,” a 

partner is dissociated by “distribution of the trust’s entire 

transferable interest in the partnership, but not merely by reason 

of the substitution of a successor trustee.” (Id., subd. (8), italics 

added.) (The same is true of a partner that is “an estate or is 

acting as a partner by virtue of being a personal representative of 

an estate.” An estate is dissociated from a partnership by 

“distribution of the estate’s entire transferable interest in the 

partnership, but not merely by reason of the substitution of a 

successor personal representative.” (Id., subd. (9).)) 

b. Legislative history of the UPA

As we have said, we view the plain language of California’s 

UPA as controlling. And we find nothing in the legislative 

history materials defendant has presented that suggests any 

contrary interpretation of that language. 

The basis of California’s statute was a revised uniform 

partnership act (RUPA or the model act), first approved and 

 

was a general partner in two entities, and to “the partnerships 

owned by” an inter vivos family trust].)
16

recommended for adoption in all states by the National 

Conference of Commissioners on Uniform State Laws (the 

Conference) in 1992, and again, with revisions, in 1994. The 

Conference’s comments on the definition of “ ‘person,’ ” in 1992 

and again in 1994, stated that the definition was “the usual 

definition used by the . . . Conference.”10 As for the 1994 model 

act’s provisions on events that dissociate a partner from the 

partnership (substantively identical to those later adopted in 

California), the Conference simply described the provision11 and 

stated that it was “new” and was “inspired by” a provision of the 

Revised Uniform Limited Partnership Act.

In 1996, the California Legislature enacted the 

Conference’s 1994 model act, with modifications not pertinent 

here. (9 Witkin, Summary of Cal. Law (11th ed. 2017) 

Partnership, § 18, pp. 606-607.) The California legislative history 

contains little relevant discussion of the definition of “person.” 

The Legislature merely added other entities – limited 

 

10 The definition of “person” was “an individual, corporation, 

business trust, estate, trust, partnership, association, joint 

venture, government, governmental subdivision, agency, or 

instrumentality, or any other legal or commercial entity.” The 

Conference also stated in its 1992 comments that “[a] limited 

liability company is another legal entity within the definition of 

‘person,’ ” and in its 1994 comments that the definition “includes 

other legal or commercial entities such as limited liability 

companies.” 

11 The Conference stated the statute “provides for the 

dissociation of a partner that is a trust, or is acting as a partner 

by virtue of being a trustee of a trust, upon the distribution by 

the trust of its entire transferable interest in the partnership, but 

not merely upon the substitution of a successor trustee.”
17

partnerships, limited liability partnerships, and limited liability 

companies – to the 1994 model act’s definition of “person.” 

Similarly, the Legislature adopted without substantive change 

the 1994 model act’s provision on the event that dissociates a 

trust, or a trustee “acting as a partner by virtue of being a trustee 

of a trust,” from the partnership. (Corp. Code, § 16601, subd. (8).) 

That provision was in the bill as introduced (Assem. Bill No. 583 

(1995-1996 Reg. Sess.) Feb. 17, 1995, § 2, p. 23) and remained 

unchanged.

In short, there appears to have been no controversy over 

the inclusion of a trust among persons who may form a 

partnership – either when the Conference approved the model act 

or during the passage of the UPA by the California Legislature.

c. Presta

Despite the plain language of the 1994 amendment to the 

partnership agreement in this case, and the language and 

legislative history of the UPA (which plaintiffs do not address), 

plaintiffs rely on the Presta case to conclude that Dr. Hallberg

was a partner when he died. We are not persuaded.

In Presta, two men entered into a real estate investment 

partnership, each acting in his capacity as trustee of a family 

trust. The court held that the partners were “the men,” not “the 

trusts,” and the death of one of the two men triggered the 

provision of the partnership agreement requiring the partnership 

to purchase the interest of a deceased partner. (Presta, supra, 

179 Cal.App.4th at pp. 911, 919.)

Presta’s rationale was that under California law, a trust is 

not “an entity, like a corporation, which is capable of entering 

into a business relationship such as a partnership.” (Presta, 

supra, 179 Cal.App.4th at p. 913.) An express trust “is merely a 
18

relationship by which one person or entity holds property for the 

benefit of some other person or entity.” (Ibid.) The court found it 

“most important[]” that an express trust is not an entity separate 

from its trustees (id. at p. 914), citing Moeller, supra, 16 Cal.4th 

at page 1132, footnote 3 (“a trust is not a person but rather ‘a 

fiduciary relationship with respect to property,’ ” and “ ‘ “ ‘is not 

an entity separate from its trustees’ ” ’ ”).

Of course, we do not disagree with the principles expressed 

in Moeller. But we do not see how the fact that a trust is not “ ‘an 

entity separate from its trustees’ ” precludes the trustee from 

“entering into a business relationship such as a partnership” 

(Presta, supra, 179 Cal.App.4th at pp. 914, 913) on behalf of the 

trust. As Moeller itself states, “the trustee has all the powers 

needed for effective transaction of business on behalf of the 

trust.” (Moeller, supra, 16 Cal.4th at p. 1132.)

Presta acknowledges that the UPA specifies that “persons” 

who may form a partnership include both a “business trust” and 

a “trust.” (Presta, supra, 179 Cal.App.4th at p. 915.) But Presta 

points out that the UPA’s definition of “person” ends by including 

“ ‘any other legal or commercial entity.’ ” (Presta, at p. 915, 

quoting Corp. Code, § 16101, subd. (13), italics added in Presta.) 

According to Presta, this “implies that it covers those listed only 

to the extent they are, in fact, ‘legal or commercial entities.’ ” 

(Presta, at 915.) “Thus what the statute actually provides is that 

to the extent a ‘trust’ qualifies as a ‘legal or commercial entity,’ it 

could also qualify as a ‘person’ capable of forming a partnership.” 

(Ibid.) 

We do not see any such implication in the terms of the 

statute. For one thing, it cannot be reconciled with the inclusion 

of “estate[s]” in the definition of persons that may associate as 
19

partners. Nor does it explain the inclusion of both “business 

trust[s]” and “trust[s].” Presta identifies “ ‘trust compan[ies]’ ” 

and “real estate investment trusts” as “trust ‘entities’ recognized 

under California law,”

12 that “might qualify as the type of entities

capable of forming a partnership,” while family trusts are merely 

“fiduciary trust relationships” which do not. (Presta, supra, 

179 Cal.App.4th at pp. 915-916.) But again, we see nothing in 

trust or partnership law that supports the constraint Presta

imposes. 

In the end, Presta distinguishes between a partner that is 

“the trust itself” and a partner that is “ ‘acting as a partner by 

virtue of being a trustee of a trust.’ ” (Presta, supra, 

179 Cal.App.4th at p. 916, quoting Corp. Code, § 16601, 

subd. (8).) Presta treats the former as a category available only 

to “entities” like trust companies and real estate investment 

trusts, and treats the latter (in our view, erroneously) as if they 

were individual partners rather than trustees. (Ibid.) Presta

asserts that section 16601 of the UPA recognizes the distinction

(Presta, at p. 916), because it contains the language referring to a 

partner “that is a trust or is acting as a partner by virtue of being 

a trustee of a trust.” (§ 16601, subd. (8), italics added.)

But Presta, quoting the applicable language only in part,

completely ignores the whole point of Corporations Code 

section 16601, which is to identify events that dissociate the 

partner from the partnership. Whether the partner is “a trust” or 

“is acting as a partner by virtue of being a trustee of a trust,” 

makes no discernable difference; in both cases, the partner is not 

 

12 The definition of “trust compan[ies]” to which Presta refers 

was later repealed. (See Fin. Code, former § 107, repealed 

Stats. 2011, ch. 243, § 1.)
20

dissociated from the partnership by the death of the trustee. On 

the contrary, that partner, whether trust or trustee, is dissociated 

only by “distribution of the trust’s entire transferable interest in 

the partnership,” and not by “the substitution of a successor

trustee.” (§ 16601, subd. (8).) 

In other words, it does not matter whether we identify the 

partner as the trust or as the trustee that transacts business for 

the trust. The result is the same. And Presta identifies nothing 

in California trust law to suggest that, merely because a trust is 

not a separate entity and cannot act except through its trustee, it 

(or its trustee acting for it) cannot be a partner. We can think of 

no reason why that should be so.

We end our discussion of Presta by pointing out that the 

court there was faced with facts that differ to some extent from 

the facts in this case. The court concluded that the partners “had 

to be [the men] themselves” because the family trusts they 

created “constituted mere relationships under California law.” 

(Presta, supra, 179 Cal.App.4th at p. 917.) But the court found 

its conclusion was “further bolstered” by language in the 

partnership agreement that suggested that the two men, who 

were the sole trustees of their respective trusts, “also intended

that interpretation.” (Ibid.; see id. at pp. 917-918.) Nothing of 

the sort exists in this case. Instead, the 1994 amendment leaves 

no doubt the four partners intended to substitute Dr. Hallberg as 

trustee of his trust in place of Dr. Hallberg in his individual 

capacity. They consented in writing to the substitution, and the

amendment required Dr. Hallberg as trustee to accept and 

assume the responsibilities of Dr. Hallberg individually “as a 

general partner in said partnership.” There is no suggestion in 

the partnership agreement to the contrary.
21

d. Plaintiffs’ contentions

Plaintiffs contend that, “[s]eparate and apart from the 

reasoning in Presta,” additional facts in this case “militate in 

favor of the same outcome.” They do not.

Plaintiffs first argue that the 1994 amendment was 

intended “to cover the single transaction of Dr. Hallberg’s 

transfer to his revocable, family trust, and to no other,” and there 

was no agreement to “multiple transfers and to include 

strangers.” Similarly, plaintiffs contend the partners “did not 

give consent to any other person or entity to substitute in as a 

partner.” We understand plaintiffs to be telling us they did not 

agree to “transfers” to successor trustees such as defendant. 

While the argument suggests the partners did not understand 

trust principles when they agreed to the substitution of 

Dr. Hallberg as trustee of the Hallberg Trust for Dr. Hallberg 

individually, that cannot change the legal effect of their 

agreement. (Moeller, supra, 6 Cal.4th at p. 1131 [“The powers of 

a trustee are not personal to any particular trustee but, rather, 

are inherent in the office of trustee. It has been the law in 

California for over a century that a new trustee ‘succeed[s] to all 

the rights, duties, and responsibilities of his predecessors.’ ”].)

Plaintiffs point to the trial court’s conclusion that, “based 

upon their familiarity and mutual trust, the partners expected to 

control the membership of the partnership.” It is hard to know 

what to make of that, because as discussed earlier, long before 

the 1994 amendment, the partners had agreed that the estates of 

deceased partners could retain the deceased partner’s interest in 

the partnership. The beneficiaries of a deceased partner’s estate 

are no less “strangers” than a successor trustee upon the death of 

the original trustee. So, plaintiffs’ suggestion that the partners 
22

did not intend to allow a successor trustee to remain in the 

partnership simply does not withstand scrutiny.

Plaintiffs then argue that the 1994 amendment was 

ambiguous, and that Dr. Loberg testified to his understanding 

that the trust was a method “ ‘for Dr. Hallberg to avoid probate 

and some taxes,’ ” and that he (Dr. Loberg) never contemplated 

that he would be partners with a non-dentist. But as we have 

stated earlier, there is nothing ambiguous about the 1994 

amendment, and Dr. Loberg’s subjective understanding (which is 

also contrary to the 1989 amendment) cannot change that. 

(Roldan v. Callahan & Blaine (2013) 219 Cal.App.4th 87, 93 

[“courts must also presume parties understood the agreements 

they sign, and that the parties intended whatever the agreement 

objectively provides, whether or not they subjectively did”].)

In short, none of these “additional facts” requires or allows

a different outcome.

e. Conclusion

To summarize: It is quite clear from the language of the 

1994 amendment that Dr. Hallberg individually was not a 

partner when he died. There is simply no way to get around this 

point. It is also quite clear from the language of the UPA that a 

trust, as well as a business trust and an estate, is a person that 

may associate with other persons in a partnership. There is no 

way to get around that either. And it is quite clear from the UPA 

that the appointment of a successor trustee does not dissociate a 

partner that is a trust (or is acting as a partner by virtue of being 

a trustee of a trust) from the partnership. To the extent that 

Presta suggests otherwise, we are compelled to disagree. 

As a consequence of these points, it is necessarily the case 

that, because Dr. Hallberg individually was not a partner when 
23

he died, his death did not require his estate to make an election 

to retain his interest, as that interest had long ago been assigned 

to the trustee of the Hallberg Trust, and did not pass to 

Dr. Hallberg’s estate. The Hallberg Trust, or its trustee acting as 

a partner by virtue of being the trustee, continues to be a partner 

in the SM-Ensley Dental Group along with the estates of 

Dr. Schrillo and Dr. Loberg. 

2. Plaintiffs’ Cross-appeal

In their cross-appeal, plaintiffs contend the trial court 

should have used the date of Dr. Hallberg’s death as the date of 

valuation of his partnership interest; that the court erred when it 

did not award attorney fees to plaintiffs as prevailing parties 

under Civil Code section 1717; and that certain distributions of 

net income to defendant after Dr. Hallberg’s death should have 

been deducted from the buyout price. These claims are all moot 

in light of our ruling on defendant’s appeal.

DISPOSITION

The judgment and postjudgment order are reversed, and 

the trial court is directed to enter judgment in favor of defendant. 

Defendant is to recover his costs on appeal.

GRIMES, Acting P. J.

WE CONCUR:

STRATTON, J.

WILEY, J.