in Re Miller Osborne Perry Trust ( 2013 )

Order Michigan Supreme Court
Lansing, Michigan
November 8, 2013 Robert P. Young, Jr.,
Chief Justice
146901 Michael F. Cavanagh
Stephen J. Markman
Mary Beth Kelly
Brian K. Zahra
Bridget M. McCormack
In re MILLER OSBORNE PERRY Trust. David F. Viviano,
Justices
_________________________________________
SUSAN PERRY, Trustee for the MILLER
OSBORNE PERRY Trust,
Appellant,
v SC: 146901
COA: 309725
Ingham Probate Court:
MARK D. PERRY, 12-000191-TV
Appellee.
_________________________________________/
On order of the Court, the application for leave to appeal the February 19, 2013
judgment of the Court of Appeals is considered, and it is DENIED, because we are not
persuaded that the questions presented should be reviewed by this Court.
MARKMAN, J. (dissenting).
Appellee is a beneficiary of the Miller Osborne Perry Trust. The trust contains a
“no-contest” or “in terrorem” clause stating that
[i]f any beneficiary under this trust or any heir of mine . . . shall challenge
or contest the admission of this trust to probate, or challenge or contest any
provision of this trust, the beneficiary or heir shall receive no portion of my
estate, nor any benefits under this trust.
Under MCL 700.7113, such a clause is enforceable against a challenging beneficiary or
heir unless “probable cause exists for instituting a proceeding contesting the trust . . . .”
Appellee brought the instant declaratory judgment action, requesting that the trial court
assess whether he had probable cause to file a future action directly challenging the trust.
Appellant, as trustee, defended the action and countered that the action constituted a
direct challenge to the trust in violation of the no-contest clause. The trial court
determined that appellee lacked probable cause for his proposed future action but that the
declaratory judgment action did not constitute a prohibited challenge to the trust, and
appellant appealed the latter holding. The Court of Appeals indicated that the trial court
lacked jurisdiction over the action because of its hypothetical nature, but proceeded
nonetheless to hold that by bringing the action, appellee had not thereby breached the no-
contest clause.
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I would grant leave to appeal to consider the following three questions: (a) as
addressed at greater length in Justice VIVIANO’s thoughtful dissent, whether in light of
MCL 700.7113 the trial court possessed jurisdiction to hear the instant declaratory
judgment action, see McLeod v McLeod, 365 Mich 25 (1961); (b) whether the Court of
Appeals erred by concluding that appellee’s declaratory judgment action did not breach
the no-contest clause; and (c) whether a beneficiary relying on the exception to the
enforcement of a no-contest clause in MCL 700.7113 that enables the beneficiary to
receive a portion of, or benefits under, the trust despite having raised a legal challenge to
the trust, can establish “probable cause” for bringing his legal challenge when he or she
did not ultimately prevail in the legal challenge, see, e.g., In re Stan Estate, 301 Mich
App 435, 444-445 (2013), citing 2 Restatement Property, 3d, Wills & Other Donative
Transfers, § 8.5, comment c, at 195.
VIVIANO, J. (dissenting).
I respectfully dissent because I believe the lower courts may have erred by
reaching a nonjusticiable question.
In its opinion, the Court of Appeals stated:
When the petition is examined as a whole, it is clear that Mark Perry
asked the probate court to examine his evidence and determine whether that
evidence would give him probable cause—as that phrase is understood
under MCL 700.7113—if he were to challenge the Trust. That is, he
essentially posed a hypothetical scenario to the probate court and asked it to
advise him about the probable application of a statute—MCL 700.7113—to
his proposed scenario. For that reason, Mark Perry likely failed to allege a
justiciable controversy. See Shavers v Attorney General, 402 Mich 554,
588-589, 267 NW2d 72 (1978) (stating that court should not decide
hypothetical issues; rather, declaratory relief is only appropriate where the
plaintiff has sufficiently alleged an actual justiciable controversy). [In re
Miller Osborne Perry Trust, 299 Mich App 525, 531 (2013).]
Despite its doubts about whether the case presented a justiciable controversy, the
Court of Appeals went on to address the merits of the issue presented. I believe that it
should not have done so without first addressing, as a threshold matter, whether petitioner
had sufficiently alleged a justiciable controversy.
As (now) Chief Justice YOUNG has explained,
[q]uestions of justiciability may be raised at any stage in the proceedings,
even sua sponte, and may not be waived by the parties. Where a lower court
has erroneously exercised its judicial power, an appellate court has
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jurisdiction on appeal, not of the merits but merely for the purpose of
correcting the error of the lower court in entertaining the suit. [Mich
Chiropractic Council v Comm’r of the Office of Fin & Ins Servs, 475 Mich
363, 374 (2006) (opinion by YOUNG, J.) (quotation marks and citation
omitted), overruled on other grounds by Lansing Sch Ed Ass’n v Lansing
Bd of Ed, 487 Mich 349, 371 n 18 (2010).]
Therefore, I would remand this case to the Court of Appeals for a determination of
whether the probate court exceeded the constitutional limits of its “judicial power” under
Const 1963, art 6, §1. On remand, I would direct the Court of Appeals to consider
McLeod v McLeod, 365 Mich 25 (1961), a case that appears to be on point.
In McLeod, four children promised their father that they would not sue to recover
the assets of their deceased mother. In exchange, the father promised to leave those
assets to his children upon his own death. Subsequently, the father remarried and
executed a will bequeathing a large portion of the assets in dispute to his new wife. The
new will contained an in terrorem clause that was to be enforced against anyone who
“‘contest[ed]’” its provisions. Id. at 27-29.
Following the father’s death, his son filed a complaint for declaratory relief. The
son asked the trial court to declare whether a suit to enforce the oral agreement between
the father and his children would qualify as a “contest” to the will. Id. at 29-30. The
court dismissed the action on the ground that the son’s legal question was inappropriate
in the context of a declaratory action.
This Court affirmed the trial court’s order, emphasizing that declaratory relief is
not appropriate when “‘a declaration . . . can be made only after a judicial investigation of
disputed facts, especially where the disputed questions of fact will be the subject of
judicial investigation in a regular action.’” Id. at 32, quoting Washington-Detroit Theatre
Co v Moore, 249 Mich 673, 678 (1930). The Court also explained that a declaratory
action “‘is not a substitute for the regular actions, and is not an exercise of general equity
jurisdiction in which the court may grant consequential relief . . . .’” McLeod, 365 Mich
at 32, quoting Gross Pointe Shores v Ayres, 254 Mich 58, 62 (1931). The Court
continued, “It has been repeatedly declared that [declaratory actions] may not be regarded
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as a substitute for other legal actions.” McLeod, 365 Mich at 33, citing Brown v Brodsky,
348 Mich 16, 20 (1957).
In McLeod, the plaintiff’s legal question did not arise in a justiciable manner
because he had not brought “a suit for specific performance of the alleged verbal
agreement between his father and the plaintiff and [his siblings] and fail[ed] to prevail
therein.” McLeod, 365 Mich at 34. For this reason, this Court concluded that it was “not
concerned, in other words, with rights that must vest in the future or with the
interpretation of a written instrument purporting to create such rights.” Id. Accordingly,
this Court held that declaratory judgment was not appropriate “for the determination of
the question of law submitted by plaintiff . . . .” Id.Thus, McLeod may be read as establishing the following rule: a party may not use
a declaratory action to preview whether a specific course of conduct would violate an in
terrorem clause. Yet that is exactly what petitioner did in this case. He also asked the
probate court to order that “the existence of probable cause renders unenforceable the
[no-contest] clause [in view of MCL 700.7113].” Perry Trust, 299 Mich App at 531
(first alteration in original). Finally, just as in McLeod, petitioner sought a judgment that
would be res judicata in the event that someone tried to enforce the in terrorem clause
against him in subsequent litigation.
In this case, the Court of Appeals did not examine the justiciability of Mark
Perry’s petition, despite expressing concerns that the case was nonjusticiable and despite
caselaw from this Court suggesting that these concerns may have been well founded.
Consequently, the law in the area remains unclear. The published Court of Appeals
opinion casts serious doubt on the justiciability of the type of question raised by
petitioner without ever deciding whether the probate court erred by reaching the merits in
the case before it. Absent resolution of this issue by the Court of Appeals or this Court, I
believe we are passing on an opportunity to bring clarity to this area of the law and police
the constitutional limits of the judicial power. Therefore, I respectfully dissent.
I, Larry S. Royster, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
November 8, 2013
d1105
Clerk