Taylor v. Credille ( 2018 )

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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
In the Matter of:
RALPH CREDILLE REVOCABLE TRUST DATED AUGUST 22, 2014
_________________________________
PAMALA TAYLOR, et al., Petitioners/Appellees,
v.
R. DOUGLAS CREDILLE, Respondent/Appellant.
No. 1 CA-CV 17-0690
FILED 9-27-2018
Appeal from the Superior Court in Mohave County
No. S8015PB201600131
The Honorable Derek C. Carlisle, Judge
AFFIRMED
COUNSEL
Bernard Justice Johnsen Law, PLLC, Chandler
By Bernard J. Johnsen
Counsel for Petitioners/Appellees
R. Douglas Credille, Littlefield
Respondent/Appellant
TAYLOR, et al. v. CREDILLE
Decision of the Court
MEMORANDUM DECISION
Presiding Judge Diane M. Johnsen delivered the decision of the Court, in
which Judge Maria Elena Cruz and Judge Randall M. Howe joined.
J O H N S E N, Judge:
¶1 R. Douglas Credille ("Doug") appeals from the superior
court's grant of summary judgment in favor of his siblings, Pamala Taylor
("Pamala") and Darrel Credille ("Darrel"). For the following reasons, we
affirm.
FACTS AND PROCEDURAL BACKGROUND
¶2 Doug, Pamala and Darrel are Ralph Credille's children. In
2014, Ralph created the Ralph Credille Revocable Trust (the "Trust")
naming his three children as beneficiaries. The Trust names Ralph as the
primary trustee, Doug as the successor trustee and Pamala as the alternate
successor trustee. Article Two of the Trust sets forth a distribution plan
upon Ralph's death that references the disposition of real property and a
manufactured home thereon (the "Property") located in the community of
Beaver Dam. In relevant part, Article Two states that "[t]he majority vote
of my three (3) children shall control" whether the Property "shall be
divided or disposed" and a majority vote will also determine how the
Property "should be used if not divided or disposed."
¶3 Ralph passed away in 2015, and Doug assumed the role of
trustee. At that time, Doug was living in the Property rent-free. Pamala
and Darrel notified Doug they wanted to sell the Property. Doug, however,
did not list the Property for sale.
¶4 Accordingly, Pamala and Darrel petitioned the superior court
for a declaratory judgment that Doug was unwilling to act as trustee of the
Trust and asked the court to appoint Pamala as the successor trustee. See
Arizona Revised Statutes ("A.R.S.") section 12-1834 (2018) (authorizing
declaratory relief to persons interested in the administration of a trust).1
The petition alleged that, since Ralph's death, Doug had not distributed
1 Absent material revision after the relevant date, we cite the current
version of a statute or rule.
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TAYLOR, et al. v. CREDILLE
Decision of the Court
Ralph's personal belongings, liquidated Ralph's brokerage account, funded
a real property sub-trust, or listed the Property for sale.
¶5 Doug answered and filed a counterclaim asserting that
Pamala and Darrel's petition violated the Trust's no-contest provision.
Doug also asked the court to modify the Trust, pursuant to A.R.S. § 14-10412
(2018), "to ensure that the Trust conforms to Decedent's intention that the
[Property] be retained for so long as a member of his family needs a place
to live, and rent-free." In turn, Pamala and Darrel amended their petition
to assert that Doug's requested modification violated the Trust's no-contest
provision. Doug answered the amended petition, counterclaiming again
for similar relief, but this time seeking reformation of the Trust pursuant to
A.R.S. § 14-10415 (2018).
¶6 Pamala and Darrel then moved for summary judgment,
which the superior court granted, over Doug's opposition. In its order, the
court removed Doug as trustee and appointed Pamala as successor trustee.
The court denied Doug's counterclaim to reform the Trust. In addition, the
court determined that Doug had violated the Trust's no-contest provision
and was no longer a Trust beneficiary.
¶7 Doug timely appealed from the judgment. We have
jurisdiction pursuant to Article 6, Section 9, of the Arizona Constitution,
and A.R.S. § 12-2101(A)(9) (2018).
DISCUSSION
¶8 Summary judgment shall be granted if "there is no genuine
dispute as to any material fact and the moving party is entitled to judgment
as a matter of law." Ariz. R. Civ. P. 56(A). We review a grant of summary
judgment de novo, applying the same standard as the superior court. See
United Bank of Ariz. v. Allyn, 167 Ariz. 191, 195 (App. 1990).
A. The Trust's Property Provision.
¶9 According to Doug, Ralph intended the Trust to retain the
Property for "family use" for as long as a family member needed a rent-free
place to live. When interpreting a trust, a court's role is to determine and
give effect to the trustor's intent. See In re Estate of Zilles, 219 Ariz. 527, 530,
¶ 8 (App. 2008). If the trust is created by written instrument, that intent is
ascertained from the express language of the instrument. State ex rel.
Goddard v. Coerver, 100 Ariz. 135, 141 (1966). A court must not go beyond
the language of the trust "in an attempt to give effect to what it conceives to
have been" the trustor's "actual intent or motive." Taylor v. Hutchinson, 17
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TAYLOR, et al. v. CREDILLE
Decision of the Court
Ariz. App. 301, 304 (1972). Extrinsic evidence is not admissible to contradict
the plain language of a trust. See Zilles, 219 Ariz. at 530, ¶ 9. We review the
superior court's interpretation of a trust de novo. See In re Indenture of Tr.
Dated January 13, 1964, 235 Ariz. 40, 44, ¶ 7 (App. 2014).
¶10 In Article Two, titled "Plan of Distribution," the Trust
identifies the assets of the trust, including the Property, and directs that,
"[u]pon my death, my successor trustee(s) shall take charge of the assets
then remaining in this trust and make distribution thereof according to the
following plan of distribution." Subpart 5 of Article Two is titled
"Disposition of All Real Property." It begins:
I desire that all of my interest in any real property owned by
this trust, including . . . [the Property] . . . be retained by the
trustees as set forth below in a separate trust known as the
REAL PROPERTY TRUST . . . for the enjoyment and use of
said [Property] by my family line, hopefully through future
generations, to be administered as hereinafter provided.
(Emphasis added.)
The Trust then directs Ralph's three children to vote to decide whether the
Property shall be divided or disposed:
Beginning upon my death, my three (3) children shall vote as
to the ownership and management of the [Property]. . . . The
majority vote of my three (3) children shall control whether
the [Property] shall be divided or disposed and a majority
vote shall also determine how the [Property] should be used
if not divided or disposed.
(Emphasis added.)
¶11 Contrary to Doug's assertion, neither the phrase directing the
Property be "retained by the trustees as set forth below in a separate trust
known as the Real Property Trust" nor the language expressing Ralph's
desire that the Property be enjoyed "hopefully through future generations"
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TAYLOR, et al. v. CREDILLE
Decision of the Court
overrides the Trust's express directive that, upon Ralph's death, the
majority vote of his three children "shall control" whether the Property is
kept or sold.2
¶12 Alternatively, Doug argues that the Trust is ambiguous, and,
therefore, the superior court should have considered extrinsic evidence of
intent, specifically statements Ralph purportedly made to the effect that he
intended family members to have the right to live in the Property rent-free.
According to Doug, Ralph insisted, in the presence of two of his children,
"that his lawyer make the Trust keep the house for use by needy family
members."
¶13 In opposing summary judgment, Doug did not submit
affidavits or other sworn testimony to establish Ralph's intent. See Ariz. R.
Civ. P. 56(c)(5), (6). Instead, he relied on hearsay statements contained in
his verified counterclaim. See Ariz. R. Evid. 801(c). Setting aside the
evidentiary issues posed by Doug's opposition to summary judgment, as
explained above, the express language of the Trust directs that the Property
be placed in a sub-trust and that Ralph's three children determine, by
majority vote, whether the Property will be kept or sold. We will not
consider the statements Doug asserts Ralph made because those statements
directly contradict express language in the Trust. See Zilles, 219 Ariz. at 530,
¶ 9.3
2 The phrase "I desire" generally is considered precatory language,
defined as language that is "requesting, recommending, or expressing a
desire rather than a command." See Black's Law Dictionary (10th ed. 2014);
see also In re Hayward's Estate, 57 Ariz. 51, 60-61 (1941) (interpreting phrase
"I wish" as precatory language that a testator's descendants may follow or
not as they please). Doug's briefs do not address the relationship between
precatory language and trust language that expresses a command;
therefore, we do not address the issue further. See ARCAP 13(a)(7)
(requiring the argument section of a brief to include "supporting reasons
for each contention" and citations to relevant legal authorities); see also
Polanco v. Indus. Comm'n, 214 Ariz. 489, 491, n.2 (App. 2007) (declining to
address an undeveloped argument).
3 Although Doug asserts that "[d]iscovery in our case was never even
begun," he failed to move for relief under Rule 56(d). See Ariz. R. Civ. P.
56(d) (procedure by which a party responding to a motion for summary
judgment can obtain evidence "essential to justify its opposition").
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TAYLOR, et al. v. CREDILLE
Decision of the Court
B. The No-Contest Provision.
¶14 A no-contest clause contained in a trust is enforceable unless
the party challenging the trust has probable cause to support the contest.
See In re Shaheen Trust, 236 Ariz. 498, 501, ¶ 9 (App. 2015) (citing
Restatement (Second) of Property: Donative Transfers ("Restatement") § 9.1
(1983)). Probable cause means "the existence, at the time of the initiation of
the proceeding, of evidence which would lead a reasonable person,
properly informed and advised, to conclude that there is a substantial
likelihood that the contest or attack will be successful." In re Estate of
Shumway, 198 Ariz. 323, 327, ¶ 12 (2000) (quoting Restatement § 9.1 cmt. j).
A subjective belief is not sufficient; the belief must be "objectively
reasonable." Shaheen, 236 Ariz. at 501, ¶ 12 (citation omitted). We review
de novo whether a trust's no-contest provision is enforceable. See In re Estate
of Stewart, 230 Ariz. 480, 484, ¶ 13 (App. 2012).
¶15 Doug argues that Pamala and Darrel violated the Trust's no-
contest provision. He contends they "sued to get what they want — which
is contrary to Decedent's intent and plain trust terms." On summary
judgment, the superior court rejected Doug's contention and entered
judgment in favor of Pamala and Darrel on their claim that it was Doug
who violated the no-contest clause by seeking modification and
reformation of the Trust.
¶16 The Trust's no-contest provision states:
[A]ny taker who . . . contests this trust shall forfeit all interest
in any property, income or other benefit to him/her. Any
property, income or other benefit forfeited by the operation of
this paragraph shall be distributed as part of the net proceeds
of this living trust as if the taker asserting the claim did not
survive.
¶17 We agree with the superior court that Pamala and Darrel did
not violate the no-contest provision. They petitioned the court for a
declaration that Doug was unwilling to act as trustee and an order
appointing Pamala as successor trustee. In response to Doug's
counterclaim, they amended their petition to request a finding that Doug
violated the Trust's no-contest provision. The record reflects that Doug, as
trustee, made no efforts to place the Property in a sub-trust or to sell the
Property as required by the Trust terms. Accordingly, Pamala and Darrel
had probable cause for their petition and did not violate the no-contest
clause.
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TAYLOR, et al. v. CREDILLE
Decision of the Court
¶18 We also agree with the superior court that Doug's
counterclaim violated the no-contest provision. Doug sought modification
and reformation of the Trust based on his allegation that it was Ralph's
"intention that the [Property] be retained for so long as a member of his
family needs a place to live, and rent-free." The counterclaim directly
contested the terms of the Trust, which require a sale of the Property if a
majority of the children so vote. The Trust is in writing, signed by Ralph,
and notarized.
¶19 Doug presented no evidence that would lead a reasonable
person, properly informed and advised, to conclude there was a substantial
likelihood that his proposed Trust modification or reformation would be
successful. See Shumway, 198 Ariz. at 327, ¶ 12. Accordingly, Doug did not
have probable cause to challenge the Trust, and the superior court properly
enforced the no-contest provision against him.
CONCLUSION
¶20 For the foregoing reasons, we affirm the superior court's
judgment. We award costs to Pamala and Darrel upon compliance with
Arizona Rule of Civil Appellate Procedure 21.
AMY M. WOOD • Clerk of the Court
FILED: AA
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