Eleanor Licensing, LLC v. Classic Recreations, LLC

Following a four-day bench trial, the court entered

judgment in favor of Eleanor Licensing LLC and Denice

Shakarian Halicki and against Classic Recreations, LLC, T&D

Motor Company, Jason Engel and Tony Engel (collectively

Classic), ordering that Eleanor Licensing retain possession of a

vehicle identified as “Eleanor No. 1,” which had been

manufactured by Classic pursuant to a licensing agreement

between the parties; quieting title to the vehicle in Eleanor

Licensing; directing Classic to perform according to the terms of

the licensing agreement and transfer legal title to Eleanor No. 1

to Eleanor Licensing; and awarding damages of $6,657.75 and

attorney fees of $176,050. On appeal Classic contends the

licensing agreement was unenforceable due to lack of

consideration at the time of execution, the governing statutes of

limitation barred Eleanor Licensing and Halicki’s claims, and the

findings that Jason Engel and Tony Engel are the alter egos of

Classic Recreations and T&D Motor are not supported by

substantial evidence. We reverse the judgment to the extent it is

based on Eleanor Licensing and Halicki’s causes of action for

breach of contract, as well as the court’s alter ego findings, and

otherwise affirm the judgment and postjudgment order.

3

FACTUAL AND PROCEDURAL BACKGROUND

1. The Gone in 60 Seconds Films and the November 1, 2007

License Agreement

The 1974 motion picture Gone in 60 Seconds was written,

directed and produced by H.B. “Toby” Halicki, who also starred in

the film.1

The movie featured a yellow 1971 Fastback Ford

Mustang, code named “Eleanor.” H.B. Halicki died in 1989 while

filming Gone in 60 Seconds 2. His widow, Denice Shakarian

Halicki, acquired intellectual property rights relating to “Gone in

60 Seconds” and “Eleanor” from H.B. Halicki’s estate.

A 2000 remake of Gone in 60 Seconds, released by

Hollywood Pictures, a division of Walt Disney Company,

pursuant to rights granted by Denice Shakarian Halicki in May

1995, starred Nicolas Cage and Angelina Jolie. Jerry

Bruckheimer produced the remake; Halicki was an executive

producer. The 2000 motion picture featured a customized 1967

Fastback Ford Mustang, which was also named “Eleanor.” The

vehicle was sometimes (erroneously) referred to in the film as a

1967 Shelby GT-500. In July 2007 Hollywood Pictures/Disney

executed a quitclaim to confirm that Halicki retained the

merchandising rights to “Gone in 60 Seconds” and “Eleanor.”

Halicki formed Eleanor Licensing in 2007 and on

October 31, 2007 granted the company a nonexclusive license to

her intellectual property rights, merchandising rights,

trademarks and copyrightable material relating to “Gone in

60 Seconds” and “Eleanor.” As of November 1, 2007 Eleanor



1

Our factual summary is based on the findings set forth in

the trial court’s statement of decision, which, except where noted,

are undisputed on appeal.

4

Licensing entered a license agreement with T&D Motor and

Classic Recreations granting T&D Motor and Classic Recreations

the right to use intellectual property rights, trademarks and

copyrightable material relating to “Gone in 60 Seconds” and

“Eleanor” to manufacture and sell 300 restored 1971, 1972 and

1973 Fastback Ford Mustangs fitted and detailed to replicate in

appearance the 1974 Eleanor and 1,000 restored 1967 and 1968

Fastback Ford Mustangs fitted and detailed to replicate in

appearance the 2000 Eleanor.

Pursuant to the license agreement T&D Motor and Classic

Recreations agreed to pay Eleanor Licensing a one-time fee of

$300,000, plus a royalty for each vehicle sold in accordance with a

schedule set forth in the agreement (but no less than 15 percent

of each vehicle’s sale price).2

Paragraph 9.3 of the license

agreement further provided, “Licensee agrees at Licensee’s

expense to give Licensor Number ‘1’ unit, Number ‘48’ unit and

Number ‘60’ unit of the original ‘Gone in 60 Seconds’ Eleanor

vehicle and Number ‘1’ unit, Number ‘47’ unit and Number ’60’

unit of the Remake 2000 Eleanor vehicle. [¶] (a) Licensor agrees

that the aforesaid samples of the Licensed Merchandise may be

used by Licensee in the promotions and car events with

Licensor’s approval and will be fully insured during such use and

during the transportation to and from such event.”

Paragraph 14.1, “Licensor’s Warranty,” part of the section

of the agreement entitled Warranties, Representations and

Indemnification, provided, “Licensor represents and warrants

that it has the right to enter into this Agreement: Should any



2 Classic eventually sold replicas for approximately

$2.7 million and paid Eleanor Licensing $340,000 in royalties.

5

third party assert a claim, demand, or cause of action against

Licensee contesting Licensor’s ownership of Licensed Properties

in relation to this Agreement, Licensor shall undertake and

conduct the defense of any such claim, demand or cause of

action.”

Paragraph 16.4(b) provided, in part, “Licensee is

responsible for any and all legal fees, collections costs, and/or

court costs incurred by Licensor in securing a remedy for any

breach of this Agreement by Licensee . . . .” Paragraph 23.5

required all disputes to be resolved by “binding, mandatory

arbitration subject and pursuant to the rules and procedures of

the American Arbitration Association.”

2. Delivery of the Sample Car

The Number 1 unit of the 2000 Eleanor replica described in

the licensing agreement (Eleanor No. 1 or the sample car) was

constructed in Yukon, Oklahoma, Classic’s place of business, and

moved from there to Halicki’s residence in February 2008.3

Apparently neither license plates nor title documents were

delivered with the vehicle. On September 16, 2009 Michael

Leone, a consultant working with Halicki, emailed Jason Engel to

“remind you to please find and send Denice’s Eleanor title with



3 At times in the trial court Classic maintained this vehicle

was a prototype, not one of the sample cars described in

paragraph 9.3 of the license agreement. The trial court found

Jason Engel had “deliberately testified untruthfully” on this point

and, as a result, “determine[d] that his testimony on other facts is

not credible.” On appeal Classic does not reiterate its claim the

vehicle delivered to Halicki in February 2008 was not a sample

car to which she was entitled under the terms of the license

agreement.

6

her license plate.” When the license plate, but not the title

document, was sent, Leone again emailed Jason Engel, noting

“Denice’s title to Eleanor . . . wasn’t in the fedex [sic] with

Eleanor’s License plate (tag). What happened? Please check into

this.” Jason Engel responded, “Mike it should have been. I’ll find

it and send it out.”

3. The Shelby Litigation

In April 2004 the United States Patent and Trademark

Office issued a certificate of registration to the Carroll Hall

Shelby Trust (Shelby) for the trademark “Eleanor” for use with

automobiles and structural parts of automobiles. Shelby

thereafter licensed Unique Motorcars, Inc. to use the trademarks

“Shelby GT-500” and “Eleanor” in connection with the

manufacture and sale of vehicles and merchandise relating to any

1960’s Shelby automobiles. Unique then began manufacturing

and selling vehicles that resembled the 2000 remake version of

Eleanor, which, as discussed, had been referred to in the movie as

a 1967 Shelby GT-500. In May 2004 Halicki sued Unique and

Shelby for copyright infringement, common law trademark

infringement, unfair competition and other related torts. Halicki

also sought cancellation of Shelby’s registration of the “Eleanor”

mark.

The Engels were aware of the Shelby litigation when they

were negotiating the November 1, 2007 license agreement.

Paragraph 11.5 of the agreement stated, “Shelby Matter.

Licensor has advised Licensee that Licensor and related parties

are currently involved in litigation with Carroll Shelby, Unique

Performance, Steve Sanderson and related entities (collectively

‘Shelby’) with respect to the alleged infringement by Shelby of

7

certain intellectual property rights relating to the Eleanor vehicle

from the ‘Gone in 60 Seconds’ films.”

In December 2008, after Classic had delivered

Eleanor No. 1 to Halicki, Shelby filed its own federal court

trademark infringement action against Classic Recreations,

Halicki and others. All disputes involving Shelby and the

identification of the 2000 Eleanor as a 1967 Shelby GT-500 were

eventually settled in 2009. As part of the settlement, Shelby

abandoned any claim to the intellectual property rights to

“Eleanor” and on December 18, 2009 assigned to Halicki its

entire interest and goodwill in the “Eleanor” registered mark.

4. Termination of the License Agreement and Classic’s

Demand Letter

On October 16, 2009, shortly after the email exchange

between Jason Engel and Leone regarding the title document to

Eleanor No. 1, Classic terminated the license agreement. A

month later, in a letter from counsel dated November 20, 2009,

Classic asserted claims against Eleanor Licensing under the

license agreement, stating, “As a result of the settlement of the

lawsuit brought by Carroll Shelby, et al. against Denice

Shakarian Halicki, et al., and other facts, it is clear that Eleanor

Licensing LLC did not have the rights it claimed to have had

relative to the automobiles that were manufactured by Classic

under the terms of the Agreement . . . .” The letter continued

that Classic had suffered damages as a consequence of Eleanor

Licensing’s wrongful actions, including “the licensing fees and

royalties paid by T&D and Classic to Eleanor Licensing LLC

under the terms of the Agreement [and] the ‘Number 1 Unit

Remake 2000 Eleanor vehicle’ given to Eleanor Licensing LLC

under the terms of the Agreement . . . .” The letter offered to

8

settle the claims for $640,000 and “return of the ‘Eleanor’

automobile.” The penultimate paragraph of the letter declared,

“[B]ecause the ‘Eleanor’ automobile which was manufactured by

Classic and which is in your possession remains titled in Classic’s

name, you will not be able to obtain insurance on it. The vehicle

is not being insured by Classic and demand is hereby made upon

you not to drive the vehicle.”

Counsel for Halicki responded to the November 20, 2009

letter, describing the claims asserted as “frivolous and without

any foundation whatsoever” and threatening an action for

malicious prosecution against lawyer and clients if Classic

initiated a lawsuit.

5. Disputed Ownership and Possession of the Sample Car

Classic did not sue Eleanor Licensing for allegedly

misrepresenting its rights to “Gone in 60 Seconds” and “Eleanor”

in the November 1, 2007 license agreement. However, in

May 2014 Jason Engel petitioned for a writ of replevin in

Oklahoma state court seeking recovery of the sample car, naming

as defendant Fusion Motor Sports, Inc., which Eleanor Licensing

had licensed to build Eleanor replicas and which was displaying

the sample car in its Southern California showroom. A copy of a

State of Oklahoma certificate of title, naming Classic

Recreations LLC as owner of the vehicle, was attached as

Exhibit A to the verified petition.4

The Oklahoma state court



4 While Classic’s appeals were pending in this court, Eleanor

Licensing and Halicki moved to dismiss the appeals pursuant to

the disentitlement doctrine, contending the photocopy of the

certificate of title presented to the Oklahoma state court and

thereafter used by Classic during trial of this action had been

reproduced in a manner that failed to include the word “Denice”

9

issued a prejudgment order of restraint based on the verified

petition on May 23, 2014 and an order of delivery on

June 26, 2014.

After filing the Oklahoma replevin action, Jason Engel

contacted the Los Angeles Police Department and reported that

he owned the sample car, which he had loaned out years earlier

for promotional use. He claimed the car had then disappeared. A

detective with the LAPD automobile task force received a copy of

the Oklahoma title document but also learned there was a

dispute as to the vehicle’s ownership. The sample car was seized

from the Fusion showroom, impounded and then ultimately

released pursuant to stipulation to Eleanor Licensing and

Halicki, who paid storage fees of $6,657.75.

6. Halicki and Eleanor Licensing’s Lawsuit

On August 15, 2014 Eleanor Licensing and Halicki filed

this lawsuit to recover possession of, and legal title to,

Eleanor No. 1. Their complaint alleged eight causes of action:

breach of contract, breach of contract implied by conduct, breach

of implied covenant of good faith and fair dealing, declaratory

relief, return of personal property, quiet title, injunctive relief

and specific performance.

The gravamen of the first three, contract-based causes of

action is that Classic breached the agreement between the

parties (either the license agreement or an implied-in-fact



handwritten in pencil on the top margin of the document.

Eleanor Licensing and Halicki have also moved for this court to

take evidence on appeal, presenting the declaration of a forensic

examiner who opined the pencil notation “Denice” had been on

the original title document since late 2008. Both motions are

denied.

10

contract) by attempting to gain possession of the sample car. The

eighth cause of action for specific performance, also based on the

license agreement, alleges that Halicki is entitled, pursuant to

paragraph 13.2 of the agreement, to a court order requiring

Classic to transfer title to Eleanor No. 1 to her and to execute all

documents necessary to accomplish that task.5

The declaratory

relief cause of action alleges an actual controversy concerning the

parties’ respective rights to Eleanor No. 1: Eleanor Licensing

and Halicki claim they own Eleanor No. 1 free and clear of any

express or implied interest of Classic; Classic claims it has an

interest in Eleanor No. 1 as a result of holding title to the vehicle.

The fifth cause of action for return of personal property

incorporates by reference the allegations in all the prior

paragraphs in the complaint, seeks return of the sample car and

alleges Classic has damaged Eleanor Licensing and Halicki by

having Eleanor No. 1 taken from their possession, custody and

control. The quiet title cause of action seeks to quiet title to

Eleanor No. 1 solely in the name of Halicki as of the date Classic

gave the vehicle to Halicki in February 2008.6

The seventh cause

of action requests injunctive relief restraining Classic from

interfering with Eleanor Licensing and Halicki’s merchandising

rights to “Eleanor,” including their rights to the use and quiet

enjoyment of Eleanor No. 1.



5

The court permitted Eleanor Licensing and Halicki to

amend the complaint to conform to proof to allege title should be

transferred to both plaintiffs, not just Halicki.

6

The amendment to conform to proof also modified the quiet

title cause of action to include Eleanor Licensing, as well as

Halicki.

11

The complaint alleged in its description of the parties that

Jason Engel was the co-owner of Classic Recreation and T&D

Motor and the alter ego of both companies and similarly that

Tony Engel, Jason’s father, was co-owner and alter ego of both

Classic Recreation and T&D Motor.

7. The Trial Court’s Decision in Favor of Eleanor Licensing

and Halicki and Postjudgment Award of Fees

The case was tried before the court over four days in

February 2015. The court issued a 10-page tentative decision in

September 2015, ruling in favor of Eleanor Licensing and Halicki

on all causes of action, including a finding that Classic had

breached the license agreement by failing to transfer title to the

sample car to Eleanor Licensing. Following Classic’s request for

a statement of decision, the court entered a 32-page statement of

decision in February 2016 (adopting Eleanor Licensing and

Halicki’s proposed statement of decision after overruling Classic’s

objections).

In its statement of decision the court rejected Classic’s

argument, predicated on Shelby’s claim to certain “Eleanor”

trademark rights, that Eleanor Licensing did not have the legal

authority to license all the rights identified in the November 1,

2007 license agreement. Then, finding that Classic stood in a

fiduciary relationship with Eleanor Licensing and Halicki with

respect to delivery of title to the sample car, the court ruled the

delayed discovery rule articulated by this court in April

Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805 applied and

Classic’s breach of the license agreement had occurred in secret,

so that the limitations period for Eleanor Licensing and Halicki’s

claims did not begin to run until the sample car was seized and

impounded by the LAPD at the urging of Classic. The court also

12

found that Jason Engel and Tony Engel were the alter egos of

Classic Recreations and T&D Motor.

In its Judgment, entered April 5, 2016, the court ordered

that Eleanor Licensing retain possession of Eleanor No. 1,

quieted title to the vehicle to Eleanor Licensing, and ordered

Classic Recreations, T&D Motor, Jason Engel and Tony Engel to

specifically perform their duties according to the terms of the

license agreement and transfer full title to the sample car to

Eleanor Licensing and Halicki. Additionally, the court issued a

permanent injunction requiring Classic Recreations, T&D Motor,

Jason Engel and Tony Engel to transfer title to the sample car to

Eleanor Licensing and Halicki and precluding them from

transferring title to anyone other than Eleanor Licensing and

from seeking possession of, or harming, the sample car. Eleanor

Licensing and Halicki were awarded damages of $6,657.75, plus

prejudgment interest of $887.70, jointly and severally from all

defendants. Finally, the court quieted title to the sample car in

Eleanor Licensing.

Following entry of judgment Eleanor Licensing and Halicki

moved for an award of attorney fees and costs pursuant to

paragraph 16.4 of the license agreement and Civil Code

section 1717. The court granted the motion in part, awarding

Eleanor Licensing attorney fees of $176,050 in a postjudgment

order dated August 23, 2016, rather than the $308,969.50 that

had been requested.

Classic filed a timely notice of appeal from the judgment

(case no. B275429) and a separate timely appeal from the

postjudgment attorney fee order (case no. B279238).

13

CONTENTIONS

Classic contends that, because Classic Recreations was

named as owner of the sample car in the certificate of legal title

issued by the State of Oklahoma, it was presumed to be the

owner of full beneficial title pursuant to Evidence Code

section 6627

and that Eleanor Licensing and Halicki failed at

trial to meet their burden of overcoming the presumption.

Specifically, Classic asserts Eleanor Licensing did not convey the

trademark rights to “Eleanor” in the November 1, 2007 license

agreement, resulting in a failure of consideration for that

agreement and invalidating any rights Eleanor Licensing and

Halicki assert under its terms. Classic also contends the statute

of limitations barred the various claims asserted by Eleanor

Licensing and Halicki in their complaint and the findings that

Jason Engel and Tony Engel are the alter egos of Classic

Recreations and T&D Motor are not supported by substantial

evidence.8





7 Evidence Code section 662 provides, “The owner of the legal

title to property is presumed to be the owner of the full beneficial

title. The presumption may be rebutted only by clear and

convincing proof.”

8 Although Classic separately appealed the postjudgment

order awarding attorney fees, in its briefs in this court it argues

only that, if we reverse the judgment in favor of Eleanor

Licensing and Halicki in its entirety, the award of attorney fees

and costs to them as prevailing parties should also be reversed

and, alternatively, if we reverse the court’s alter ego findings but

otherwise affirm the judgment, we should also reverse the award

of attorney fees and costs against Jason Engel and Tony Engel in

their individual capacities. Any other challenge to the ruling has

been forfeited. (See, e.g., Tiernan v. Trustees of Cal. State

14

DISCUSSION

1. The November 1, 2007 License Agreement Is Supported

by Adequate Consideration

Emphasizing the 2004 federal registration of Shelby’s

“Eleanor” trademark for “automobiles, engines for automobiles,

and structural parts for automobiles” and the statutory

presumption of its validity (15 U.S.C. § 1115(a)),

9 Classic argues

Eleanor Licensing failed at trial to demonstrate its ownership of

a prior use common law trademark to “Eleanor” for those items

and, therefore, did not establish it owned the rights it

purportedly licensed to Classic in November 1, 2007. Classic also

asserts Shelby’s December 2009 assignment to Halicki of its

federally registered trademark as part of the settlement of the

Shelby litigation confirmed that Eleanor Licensing could not

convey a license to use the trademark in November 2007.

Classic’s argument is doubly flawed. First, Halicki testified

concerning her late husband’s commercial exploitation of the



University & Colleges (1982) 33 Cal.3d 211, 216, fn. 4; Paulus v.

Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 685.)

9

Title 15 United States Code section 1115(a) provides that

federal registration of a trademark “shall be admissible in

evidence and shall be prima facie evidence of the validity of the

registered mark and of the registration of the mark, of the

registrant’s ownership of the mark, and of the registrant’s

exclusive right to use the registered mark in commerce on or in

connection with the goods or services specified in the registration

subject to any conditions or limitations stated therein, but shall

not preclude another person from proving any legal or equitable

defense or defect, including those set forth in subsection (b),

which might have been asserted if such mark had not been

registered.”

15

“Eleanor” and “Gone in 60 Seconds” marks following the release

of the first film, as well as the marketing activities surrounding

and subsequent to the release of the 2000 remake. The trial

court found this evidence established Eleanor Licensing and

Halicki’s ownership of rights in the “Eleanor” trademark (that is,

a common law trademark) sufficient to authorize the license for

use of the mark by Classic. That finding is amply supported by

substantial evidence. (See Feresi v. The Livery, LLC (2014)

232 Cal.App.4th 419, 424 [testimony of a single witness is

sufficient to constitute substantial evidence]; Citizens Business

Bank v. Gevorgian (2013) 218 Cal.App.4th 602, 613 [same].)

Second, evidence at trial, as well as the license agreement

itself, demonstrated that Classic was fully aware of Shelby’s 2004

federal trademark registration of “Eleanor” and the litigation

initiated by Halicki concerning its validity. In fact, trial

testimony disclosed that Leone, on behalf of Eleanor Licensing,

had advised the Engels to investigate ownership of the

intellectual property covered by the license agreement before

completing the transaction, which they did. In addition, Eleanor

Licensing warranted that it had the right to enter into the license

agreement and agreed to defend Classic in any third-party

infringement action brought against it for its use of the

intellectual property being licensed. Thus, even if ownership of

the “Eleanor” trademark was legitimately disputed by Shelby,

Eleanor Licensing and Halicki provided sufficient consideration

to Classic by giving Classic what it bargained for, licensing the

rights they had (which included their undisputed copyright

interests in “Eleanor” and “Gone in 60 Seconds,” as well as their

trademark rights) and agreeing to protect Classic from

infringement claims. (See San Diego City Firefighters, Local 145

16

v. Board of Administration Etc. (2012) 206 Cal.App.4th 594, 619

[“‘[a] written instrument is presumptive evidence of a

consideration’ (Civ. Code, § 1614), and in any event all the law

requires for sufficient consideration is the proverbial

‘peppercorn’”].) There was no failure of consideration.

2. The Contract-based Claims, to the Extent Otherwise

Valid, Are Barred by the Statute of Limitations; the

Causes of Action for Return of Personal Property and

Quiet Title Were Timely Filed

a. The contract claims

Classic terminated the November 1, 2007 license

agreement on October 16, 2009. At that point the sample car was

in Halicki’s possession; legal title to the vehicle, however,

remained in the name of Classic Recreations. That Classic had

not transferred legal title to Halicki or Eleanor Licensing—and

did not intend to do so—was emphasized a month later in the

demand letter sent by Classic’s counsel to Eleanor Licensing. In

their complaint filed August 15, 2014, approximately four years

eight months after Classic’s demand letter, Eleanor Licensing

and Halicki sought specific performance of certain provisions of

the license agreement, including that Classic transfer legal title

to Eleanor No. 1 to Halicki, and alleged that Classic had

breached the license agreement “by attempting to assume

possession, custody, or control of Eleanor No. 1” in May and

June 2014.

Contract claims relating to Classic’s refusal to transfer

legal title to the sample car to Halicki were barred by the fouryear

statute of limitations governing actions for breach of a

written contract (Code Civ. Proc., § 337), as Classic argued in the

trial court. Contrary to the court’s finding, Jason Engel did not

“harbor[] a secret intent in 2009 not to turn over title”; the

17

demand letter of November 20, 2009 made plain that Classic

Recreations held legal title to the sample car in its name and did

not intend to transfer title to Eleanor Licensing or Halicki.

Indeed, far from somehow suggesting it would comply with the

provisions of the license agreement and transfer title to Eleanor

Licensing and Halicki, Classic demanded they return possession

of the sample car to it as part of the consideration for settling the

claims it asserted against Eleanor Licensing. Moreover, Eleanor

Licensing and Halicki were well aware that Classic held the legal

title and refused to transfer it throughout the period from

termination of the license agreement in October 2009 to the time

of Jason Engels’s attempts to regain possession of the sample car

from the Focus showroom in June 2014. The record is totally

devoid of evidence that would permit use of the delayed discovery

rule articulated in April Enterprises, Inc. v. KTTV, supra,

147 Cal.App.3d 805 to the breach of contract claim relating to the

failure to transfer title.10



10 In April Enterprises, Inc. v. KTTV, supra, 147 Cal.App.3d

805, this court applied the delayed discovery rule to a cause of

action for breach of contract when the plaintiff did not discover

the destruction of its property (the erasure of videotapes) until

long after its occurrence. As we explained, the injury was

“difficult for the plaintiff to detect”; the defendant was in “a far

superior position to comprehend the act and the injury”; and the

defendant “had reason to believe the plaintiff remained ignorant

he had been wronged.” (Id. at p. 831; see Gryczman v. 4550 Pico

Partners, Ltd (2003) 107 Cal.App.4th 1, 5 [delayed discovery rule

applicable to breach of contract action because defendant “not

only breached the contract ‘within the privacy of its own offices’

but the act which constituted the breach—failure to give notice of

the option offer—was the very act which prevented plaintiff from

discovering the breach”]; see also Cleveland v. Internet Specialties

18

Although the refusal to transfer title was made known to

Eleanor Licensing and Halicki in late 2009, Classic’s efforts in

May and June 2014 to regain possession of the sample car

through the Oklahoma writ of replevin and notice to LAPD that

the car had been taken from it without authorization occurred

only a few months before the August 2014 filing of the instant

lawsuit. The statute of limitations should not be an issue in

challenging the lawfulness of that conduct, regardless of the

theory of liability. But the suggestion that those actions

somehow constituted a breach of the long-since-terminated

license agreement lacks any merit, as Eleanor Licensing and

Halicki now seem to acknowledge by arguing in their

respondents’ brief that, “[f]or all the palaver about the license

agreement,” their lawsuit was not about the parties’ contract, but

was “a classic conversion claim.”

b. The claims for return of personal property and to

quiet title

As Classic emphasizes in its reply brief, Eleanor Licensing

and Halicki did not plead or attempt to prove a cause of action for

conversion. However, they did plead, and the trial court ruled

they had proved, a cause of action for recovery of specific personal

property, a code-based cause of action (see Code Civ. Proc., § 627),

often incorrectly referred to as a “claim and delivery action.” (See

generally 5 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 692,



West, Inc. (2009) 171 Cal.App.4th 24, 33 [breach of contract and

fraud claims arising from false representations that new business

venture had failed when it was actually operating at a profit

under a different name].) There was nothing secret or hidden

about Classic’s refusal to transfer legal title to Eleanor No. 1 to

Halicki.

19

at p. 110 [an action for the specific recovery of personal property,

with damages in a proper case for its detention, “insofar as it

needs a label or designation, might be termed ‘specific recovery of

personal property.’ [Citations.] [¶] At an early date, however,

California courts borrowed the statutory title of the provisional

remedy of ‘claim and delivery,’ which gives immediate possession

pending trial, and the action is often called a ‘claim and delivery

action.’”].)

Code of Civil Procedure section 338, subdivision (c)(1),

creates a three-year limitations period for “actions for the specific

recovery of personal property.” (See Coy v. County of Los Angeles

(1991) 235 Cal.App.3d 1077, 1087 [“[c]auses of action for claim

and delivery or conversion of personal property are governed by

the three-year statute of limitations as set forth in section 388,

subdivision (c)”].) In most cases, the act of wrongfully taking the

property triggers the statute of limitations. (AmerUS Life Ins.

Co. v. Bank of America, N.A. (2006) 143 Cal.App.4th 631, 639; see

Strasberg v. Odyssey Group, Inc. (1996) 51 Cal.App.4th 906, 915-

916 [recognizing general rule but applying delayed discovery

doctrine].) Because Eleanor Licensing and Halicki’s fifth cause of

action for return of personal property was based on Classic’s

interference with their possession and control of the sample car

in May and June 2014—only a few months before they initiated

their lawsuit—this claim was timely filed. Those portions of the

judgment restoring possession of Eleanor No. 1 to Eleanor

Licensing and Halicki and awarding damages (storage costs

incurred as a result of Classic’s wrongful actions in causing the

vehicle to be impounded by the police) are properly affirmed.

Similarly, Eleanor Licensing and Halicki’s sixth cause of

action to quiet title was timely filed. To be sure, Eleanor

20

Licensing and Halicki were aware no later than November 2009

that Classic did not intend to voluntarily transfer legal title to

the sample car and, as a consequence, had reason to know there

might be a dispute concerning ownership of the vehicle at some

future point.

11

However, the general rule in quiet title actions

(usually articulated in cases involving real property, not personal

property) is that the statute of limitations “‘“does not run against

one in possession of land.”’” (Salazar v. Thomas (2015)

236 Cal.App.4th 467, 477; accord, Muktarian v. Barmby (1965)

63 Cal.2d 558, 560 (Muktarian); Crestmar Owners Assn. v.

Stapakis (2007) 157 Cal.App.4th 1223, 1228.)12 Even if a party in

possession knows of a potential adverse claim, “there is no reason

to put him to the expense and inconvenience of litigation until

such a claim is pressed against him.” (Muktarian, at pp. 560-

561.) “Thus, mere notice of an adverse claim is not enough to



11 Notably, Classic’s November 2009 demand letter did not

assert ownership or a right to immediate possession of the

sample car. Rather, it offered to accept return of the car, together

with a cash payment, to settle its claims relating to the license

agreement and insisted only that Eleanor Licensing not drive the

car because it was uninsured.

12

There is no statute of limitations specific to quiet title

actions. (Muktarian, supra, 63 Cal.2d at p. 560; Salazar v.

Thomas, supra, 236 Cal.App.4th at p. 476.) Instead, courts refer

to the underlying theory of relief (for example, adverse

possession, breach of contract or fraud) to determine which

limitations period applies. (Muktarian, at p. 560.) However,

because Eleanor Licensing and Halicki initiated their quiet title

action within three months of Classic’s activities interfering with

their possession of the sample car, we need not determine which

limitations period would otherwise apply.

21

commence the owner’s statute of limitations.” (Salazar, at

p. 478.)

Here, following Classic’s demand letter of November 20,

2009 and Eleanor Licensing’s rejection of Classic’s claims as

“frivolous,” Classic took no action to assert any claim or right to

possession of Eleanor No. 1 until May and June 2014. It was

those events in 2014 that triggered the limitations period for the

quiet title action.

Neither Walters v. Boosinger (2016) 2 Cal.App.5th 421 nor

Ankoanda v. Walker-Smith (1996) 44 Cal.App.4th 610, the cases

relied upon by Classic, supports a conclusion Eleanor Licensing

and Halicki’s quiet title action was not timely filed. The plaintiff

in Walters had argued a quiet title claim based on the theory a

deed was void ab initio “is not subject to any statute of limitation

and ‘can be brought at any time.’” (Walters, at p. 433.) The court

of appeal rejected that contention. (Ibid.) Noting the plaintiff

had not raised any contention as to which statute of limitation

applied to his claim or maintained that his quiet title action had

been timely filed under any governing limitations period, the

court expressly declined to consider that issue. (Id. at p. 433,

fn. 16.) The court did not, as Classic asserts, hold that actual

knowledge of a potential dispute concerning ownership triggered

the limitations period for a quiet title action.

Ankoanda v. Walker-Smith, supra, 44 Cal.App.4th 610

involved an action to quiet title in which the property owner

alleged she had conveyed a joint tenancy interest in the property

to her tenant based on fraud or mistake, believing the tenant

would reconvey the interest when it was no longer needed to

qualify for a government program providing subsidies to daycare

centers. (Id. at pp. 613-614.) The tenant in a letter from her

22

attorney, however, had claimed a genuine ownership interest

pursuant to the deed creating the joint tenancy more than three

years before the owner filed her quiet title action. The court of

appeal held the action was barred by the three-year limitations

period of Code of Civil Procedure section 338, subdivision (d),

rejecting the owner’s contention the limitations period was tolled

because, as landlord, she was at all times deemed to have seisen

and possession of the leased property through her tenant.

(Ankoanda, at pp. 615-616.) The court held the Supreme Court’s

ruling in Muktarian, supra, 63 Cal.2d at page 560 that no statute

of limitations runs against a plaintiff seeking to quite title while

he or she is in possession of the property required “exclusive and

undisputed possession,” and did not apply to the alleged joint

ownership situation presented by the case before it. (Ankoanda,

at pp. 616, 618.) The court added, “as joint tenants, both WalkerSmith

[the tenant] and Ankoanda [the landlord] had an equal

right to possession of the entire property, but did not have right

to the exclusive possession of the property as against each other.

[Citation.] Thus, case law stating the general proposition that a

landlord remains seised and possessed of leased property through

her tenant as against third parties and/or the tenant is clearly

distinguishable from a case like the present one where the

occupying tenant claims a joint ownership interest pursuant to a

recorded deed and the question is whether the deed should be

invalidated.” (Id. at p. 618.)

Thus, although the court of appeal in Ankoanda held the

letter from the tenant’s lawyer asserting an ownership interest in

the property started the running of the governing three-year

limitations period, as Classic argues, that conclusion was

expressly premised on the disputing parties’ joint possession of

23

the property. (Ankoanda v. Walker-Smith, supra, 44 Cal.App.4th

at p. 618.) The court did not—indeed, could not—overturn the

Supreme Court’s holding in Muktarian that, as to the party who

is in exclusive possession of the property at issue, knowledge of a

potential adverse claim is not enough to trigger the limitations

period for a quiet title action. (See Crestmar Owners Assn. v.

Stapakis, supra, 157 Cal.App.4th at p. 1229 [unusual facts

present in Ankoanda distinguished it from the very different

circumstances in Muktarian].) Here, like the situation in

Muktarian13 and unlike Ankoanda, even though Classic retained

legal title to Eleanor No. 1, Eleanor Licensing had possession and

control of the car before it was impounded by the LAPD. The

time to file a quiet title action began to run only with that event:

“[T]itle does not equal possession.” (Crestmar, at p. 1230.)

3. The Alter Ego Finding Is Not Supported by

Substantial Evidence

“‘Ordinarily, a corporation is regarded as a legal entity,

separate and distinct from its stockholders, officers and directors,

with separate and distinct liabilities and obligations. [Citations.]’

[Citation.] ‘[T]he corporate form will be disregarded only in

narrowly defined circumstances and only when the ends of justice



13 In Muktarian a father had executed a grant deed conveying

certain real property to his son (apparently to keep his second

wife from acquiring it), but continued to live on the property.

(Muktarian, supra, 63 Cal.2d at pp. 559-560.) It was in this

context—where the father retained possession but knew his son

had legal title—that the Supreme Court held the limitation

period for the father’s quiet title action did not start to run until

the son acted in some way to challenge his father’s rights in the

property. (Id. at pp. 560-561.)

24

so require.’ [Citation.] Before a corporation’s obligations can be

recognized as those of a particular person, the requisite unity of

interest and inequitable result must be shown. [Citation.] These

factors comprise the elements that must be present for liability as

an alter ego.” (Leek v. Cooper (2011) 194 Cal.App.4th 399, 411;

see Sonora Diamond Corp. v. Superior Court (2000)

83 Cal.App.4th 523, 539 [alter ego doctrine does not apply

without evidence showing that “some conduct amounting to bad

faith makes it inequitable for the corporate owner to hide behind

the corporate form”]; Associated Vendors, Inc. v. Oakland Meat

Co. (1962) 210 Cal.App.2d 825, 838.)

The trial court based its alter ego findings on the following

evidence:

• Jason Engel told Halicki that “Classic Recreation[s]

and T&D Motors are one and the same. It’s me and

my Dad Tony that do all the decision making, so you

[Halicki] and or Mr. Leone will only be dealing with

us, no one else.”

• Jason Engel “testified under oath in a petition filed in

the Oklahoma court that Classic Recreations LLC is

his DBA”—that is, his fictitious business name.

14



14 The reference to Classic Recreations LLC as Jason Engel’s

dba appears only in the caption of the replevin petition, prepared

by Engel’s attorney. Although Engel verified that the allegations

in the petition were “true and correct based on my knowledge and

belief,” it was something of an overstatement for the court to find

that Engel had testified under oath in an Oklahoma court

proceeding that Classic Recreations was simply a dba, as set

forth on page 13 of the statement of decision, let alone that he

had “assert[ed] under oath in a court of law that he is an alter

25

• Tony Engel provided Eleanor Licensing with his

personal guarantee to honor any agreement entered

by the parties.

The court concluded this evidence was sufficient to

demonstrate such a unity of interest and ownership between

Jason Engel and Tony Engel, on the one hand, and Classic

Recreations and T&D Motor, on the other hand, that the

corporate and individual personalities merged. In addition, the

court found it would be inequitable for Jason Engel to assert

under oath in an Oklahoma court proceeding that Classic

Recreations was simply a dba and to make statements to that

effect on which he intended Eleanor Licensing and Halicki to rely

and then not to treat him as an alter ego of Classic Recreations.

Although it appears from the record that Classic

Recreations and T&D Motor are closely held family businesses,

the evidence submitted is insufficient to support the alter ego

findings. That Tony Engel and Jason Engel, as co-owners of the

two businesses, were authorized to make all decisions related to

the license agreement and the manufacture and sale of the

Eleanor replicas in no way indicates any commingling of personal

and corporate assets, use of corporate assets for personal

purposes, gross undercapitalization of the corporate entities,

disregard of corporate formalities or any other of the many

circumstances that might support the conclusion that no

separation actually existed between these two individuals and

the two corporate entities. (See, e.g., Misik v. D’Arco (2011)

197 Cal.App.4th 1065, 1073 [listing a series of factors identified



ego of Classic Recreation[s] LLC,” as the court reformulated this

point on pages 26-27 of its statement of decision.

26

in prior court decisions to support a unity-of-interest finding];

Leek v. Cooper, supra, 194 Cal.App.4th at pp. 417-418 [same].)

Moreover, Tony Engel’s offer of a personal guarantee to Halicki in

connection with the corporations’ contractual obligations, if

meaningful at all in this context, suggests that he and his

resources were viewed as distinct from those of the corporations.

Finally, while the identification of Classic Recreations as

Jason Engel’s fictitious business name in the Oklahoma state

court replevin proceedings certainly implies that Engel did not

consider Classic Recreations a distinct legal entity for purposes of

asserting ownership of Eleanor No. 1, this evidence does not

support an alter ego finding as to Tony Engel or with respect to

either individual and T&D Motor. In addition, as discussed, the

second prong of an alter ego determination requires a finding

there would be an inequitable result if the acts in question were

treated as those of the corporation alone: “‘Under the alter ego

doctrine, then, when the corporate form is used to perpetrate a

fraud, circumvent a statute, or accomplish some other wrongful or

inequitable purpose, the courts will ignore the corporate entity

and deem the corporation’s acts to be those of the persons or

organizations actually controlling the corporation, in most

instances the equitable owners.’” (Turman v. Superior Court

(2017) 17 Cal.App.5th 969, 981; accord, Sonora Diamond Corp. v.

Superior Court, supra, 83 Cal.App.4th at pp. 538-539.) Although

the trial court may have correctly applied the doctrine of judicial

estoppel to preclude Jason Engel from denying the existence of a

unity of interest between him and Classic Recreations, his

assertion that Classic Recreations functioned as his fictitious

business name did not establish that he used the corporate form

27

for any fraudulent or deceptive purpose, as required to impose

alter ego liability.

4. Jason Engel Was Properly Named as a Defendant in the

Causes of Action To Quiet Title and for Return of

Personal Property; Tony Engel Was a Proper Defendant

in the Quiet Title Cause of Action

A quiet title action may name as a defendant any party

who might assert a claim to title in the property. (See Code Civ.

Proc., §§ 762.010 [“[t]he plaintiff shall name as defendants in the

action the persons having adverse claims to the title of the

plaintiff against which a determination is sought”], 762.060,

subd. (b) [“[i]n an action under this section, the plaintiff shall

name as defendants the persons having adverse claims that are

of record or known to the plaintiff or reasonably apparent from

an inspection of the property”]; see also Harbour Vista, LLC v.

HSBC Mortgage Services Inc. (2011) 201 Cal.App.4th 1496, 1506

[explaining one purpose of 1980 revision of statutory scheme for

quiet title actions was to permit the action to proceed against

“any or all adverse claimants,” making final quiet title judgment

“good against all the world as of the time of the judgment”]; see

generally Caira v. Offner (2005) 126 Cal.App.4th 12, 25, fn. 7

[“action to quiet title may be used to establish ownership of

personal property as well as real property”].) Eleanor Licensing

and Halicki argue, and Classic does not dispute, that, because

neither Jason Engel nor Tony Engel disclaimed any interest to

Eleanor No. 1, they were each properly named as defendants in

the quiet title cause of action. As a consequence,

notwithstanding our reversal of the alter ego findings as to the

Engels, they are properly included in those portions of the

judgment in which the court ordered Eleanor Licensing to retain

possession of the sample car, quieted title to the sample car to

28

Eleanor Licensing and issued an injunction requiring transfer of

title to the vehicle to Eleanor Licensing, precluding Classic from

transferring title to anyone else and restraining Classic from

seeking possession of, or harming, the sample car (paragraphs 1,

2, 4, 5, 6 and 8).

Because Jason Engel asserted personal ownership of the

sample car in the Oklahoma replevin action, he was also properly

named as a defendant in Eleanor Licensing and Halicki’s cause of

action for return of personal property. As such, Jason Engel was

properly held jointly and severally liable with the two corporate

entities for damages equal to the storage fees imposed when the

sample car was seized from Fusion and impounded by the LAPD.

(See Code Civ. Proc., § 667 [“[i]n an action to recover the

possession of personal property, judgment for the plaintiff may be

for the possession or the value thereof, in case delivery cannot be

had, and damages for the detention”]; Crosswhite v. American

Ins. Co. (1964) 61 Cal.2d 300, 302 [party improperly withholding

personal property is “liable not only for the property or its value,

but also for damages for the detention from the time of the

demand”]; see also Spencer Kennelly, Ltd. v. Bk. of Amer. (1942)

19 Cal.2d 586, 589 [“in a claim and delivery action where plaintiff

prevails and the personal property involved has diminished in

value, deprecation is a proper element of damages”].)

5. The Engels Are Not Liable for Attorney Fees

The Engels are neither parties to the November 1, 2007

license agreement nor the alter egos of Classic Recreations and

T&D Motor, the two corporations that entered into the agreement

with Eleanor Licensing. Because the award of attorney fees to

Eleanor Licensing and Halicki as prevailing parties was based on

the fee provision in the license agreement and Civil Code

29

section 1717, the finding that Jason Engel and Tony Engel are

jointly and severally liable for that award is reversed. (See

Wilson’s Heating & Air Conditioning v. Wells Fargo Bank (1988)

202 Cal.App.3d 1326, 1332 [although contracts between general

contractor and subcontractors had attorney fee provisions and

notwithstanding stipulated judgment against general contractor

and construction lender, plaintiff subcontractors were not

entitled to recover attorney fees from construction lender that

was not a signatory to the subcontracts, was not the alter ego of

the general contractor and had not assumed general contractor’s

obligations when it foreclosed on the property]; see generally

Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 127.)

Paragraph 3 of the judgment entered April 5, 2016, ordering Classic Recreations, T&D Motor, Jason Engel and Tony Engel to perform certain terms of the November 1, 2007 license agreement, that portion of paragraph 7 of the judgment that

finds Tony Engel jointly and severally liable for damages and prejudgment interest and those portions of paragraph 7 of the judgment and the postjudgment order that find Jason Engel and Tony Engel jointly and severally liable for the award of attorney fees are stricken. In all other respects the judgment and postjudgment order awarding attorney fees are affirmed. Eleanor Licensing and Halicki are to recover their costs on appeal.