In re Estate of Reck , 2022 Ohio 719 ( 2022 )

[Cite as In re Estate of Reck, 2022-Ohio-719.]
IN THE COURT OF APPEALS OF OHIO
SECOND APPELLATE DISTRICT
DARKE COUNTY
:
IN THE MATTER OF: :
: Appellate Case No. 2021-CA-13
THE ESTATE OF ROBERT J. :
RECK : Trial Court Case No. 2021-1-89
:
: (Appeal from Common Pleas
: Court – Probate Division)
:
:
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OPINION
Rendered on the 11th day of March, 2022.
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ROBERT J. HUFFMAN, JR., Atty. Reg. No. 0040316, 24 North Short Street, Troy, Ohio
45373
Attorney for Appellant Robin R. Reck
ROBERT M. HARRELSON, Atty. Reg. No. 0003302 & WILLIAM M. HARRELSON, II,
Atty. Reg. No. 0087957, 9 Water Street, Troy, Ohio 45373
Attorneys for Appellee Gretchen Schmidt
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DONOVAN, J.
{¶ 1} Appellant Robin R. Reck (“Robin”) appeals from a judgment of the Darke
County Common Pleas Court, Probate Division, which granted appellee Gretchen
Schmidt’s motion for summary judgment on Robin’s motion to remove Schmidt as
executor of their father’s estate. Specifically, based on a prior determination that Robin
had challenged the validity of a portion of her father's Trust, which, by the terms of the
Trust itself, terminated her status as a beneficiary of the Trust, the probate court found
that Robin lacked standing to move to remove the executor. Robin filed a timely notice
of appeal on October 7, 2021.
{¶ 2} On September 6, 2017, Robert J. Reck (“Robert”) executed the Robert J.
Reck Trust (“the Trust”). Initially, all five of Robert’s children, Robin R. Reck, Robert E.
Reck, Gretchen Schmidt, Philip A. Reck, and Alexander R. Reck, were named as
successor trustees and contingent beneficiaries of the Trust. However, on June 14,
2019, Robert J. Reck executed an Amendment to the Trust whereby he removed Robin
and his sons Robert and Alexander as successor trustees and named Gretchen and
Philip as the only successor trustees to the Trust. Notably, all five of the Reck children
were still contingent beneficiaries of the Trust.
{¶ 3} The Trust contained an in terrorem (no contest) clause, which stated as
follows:
12.05 If any beneficiary under this Trust shall interpose objections to the
validity of this Trust, or institute or prosecute or be in any way interested or
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instrumental in the institution or prosecution of any action or proceeding for
the purpose of setting aside, challenging, contesting, or invalidating any
trust which I have created, then I direct that such beneficiary shall receive
nothing whatsoever under this Trust, and the bequest or devise made to
him or her shall lapse. However, nothing contained in this section shall be
construed to prevent my Trustee, or my Trustee’s successors, from
instituting or bringing any action, suit, or proceeding for the construction or
interpretation of my Trust or of any amendment thereto, nor to prevent any
beneficiary herein named from disclosing relevant information in a
proceeding relating to the construction or administration of this Trust.
Trust p. 12.
{¶ 4} On December 29, 2020, Robin Reck filed a complaint for declaratory
judgment challenging the validity of the Amendment and a claim to remove Gretchen and
Philip as successor trustees, citing Robert’s alleged incapacity as well as alleged undue
influence by Gretchen and Philip. (Robin R. Reck v. Alex Reck et al., Darke C.P. No. 20-
CV-550). Robin filed the declaratory judgment action in the Darke County Common
Pleas Court, General Division (“the common pleas court”). On February 16, 2021,
Robert passed away. On March 5, 2021, Robin filed an amended complaint removing
Robert’s guardian as a party and restating the claims made in her original declaratory
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judgment complaint.1
{¶ 5} On March 11, 2021, Gretchen was appointed as the executor of Robert’s
estate. On April 29, 2021, Robin filed a separate motion to remove Gretchen as executor
of Robert’s estate in the Darke County Probate Court. On July 30, 2021, Gretchen filed
motion for leave to file a motion for summary judgment, with the summary judgment
motion attached. Robin filed a memorandum in opposition to Gretchen’s motion for
leave on August 12, 2021. Gretchen filed a reply memorandum on August 12, 2021.
On August 27, 2021, Robin filed a response to Gretchen’s motion for summary judgment.
Gretchen filed a reply memorandum on September 1, 2021.
{¶ 6} On September 1, 2021, the probate court held oral arguments regarding
Gretchen’s motion for summary judgment. On September 10, 2021, the probate court
granted Gretchen’s motion for summary judgment; the court held that Robin’s act of filing
the declaratory judgment complaint in the common pleas court had triggered the
application of the in terrorem clause in the Trust, thereby divesting Robin of her status as
a beneficiary in the Trust. Therefore, the probate court found that Robin lacked standing
to file a motion to remove Gretchen as the executor of Robert’s estate based upon the
Ohio Supreme Court’s decision in Bradford v. Bradford, 19 Ohio St. 546 (1869).
{¶ 7} It is from this judgment that Robin now appeals.
{¶ 8} Robin’s sole assignment of error is as follows:
1 In a judgment issued on May 21, 2021, the common pleas court found that, as result of
Robin’s filing the action in Case No. 20-CV-550, which sought revocation of the
Amendment to the Trust, “the terms of the in terrorem clause are enforceable against
Robin J. Reck who is declared to not be entitled to claim proceeds from the trust property.”
(Italics sic.) Judgment, p. 6-7.
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THE TRIAL COURT ERRED IN GRANTING SUMMARY
JUDGMENT BY FINDING THAT AN IN TERROREM CLAUSE IN A TRUST
AMENDMENT APPLIES TO CHALLENGES TO THE DOCUMENT BASED
UPON LACK OF CAPACITY AND/OR UNDUE INFLUENCE.
{¶ 9} Robin contends that the probate court erred when it granted Gretchen’s
motion for summary judgment and found that Robin lacked standing to file a motion to
remove Gretchen as the executor of Robert’s estate, because Robin had triggered the in
terrorem clause in the Trust. Specifically, Robin argues that, before enforcing the in
terrorem clause, the probate court should have considered whether a “public policy” or
“good faith” exception applied, since she had alleged that the Amendment to the Trust
was procured as a result of undue influence and/or lack of testamentary capacity. In
support of her argument, Robin cites R.C. 5804.06, which states that “[a] trust is void to
the extent its creation was induced by fraud, duress, or undue influence.” Robin also
cites R.C. 5817.10, which states in pertinent part:
(B)(1) The court shall declare the trust valid if it finds all of the following:
(a) The trust meets the requirements of section 5804.02 of the Revised
Code.
(b) The settlor had the legal capacity to enter into and establish the trust,
was free from undue influence, and was not under restraint or duress.
(c) The execution of the trust was not the result of fraud or mistake.
(2) Unless the trust is modified or revoked after the court's declaration, the
trust has full legal effect.
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{¶ 10} Pursuant to Civ.R. 56(C), summary judgment is proper when (1) there is no
genuine issue as to any material fact, (2) the moving party is entitled to judgment as a
matter of law, and (3) reasonable minds, after construing the evidence most strongly in
favor of the nonmoving party, can only conclude adversely to that party. Zivich v. Mentor
Soccer Club, Inc., 82 Ohio St.3d 367, 369-370, 696 N.E.2d 201 (1998). The moving
party carries the initial burden of affirmatively demonstrating that no genuine issue of
material fact remains to be litigated. Mitseff v. Wheeler, 38 Ohio St.3d 112, 115, 526
N.E.2d 798 (1988). To this end, the movant must be able to point to evidentiary materials
of the type listed in Civ.R. 56(C) that a court is to consider in rendering summary
judgment. Dresher v. Burt, 75 Ohio St.3d 280, 292-293, 662 N.E.2d 264 (1996). The
substantive law of the claim or claims being litigated determines whether a fact is
“material.” Perrin v. Cincinnati Ins. Co., 2020-Ohio-1405, 153 N.E.3d 832, ¶ 29 (2d
Dist.).
{¶ 11} Once the moving party satisfies its burden, the nonmoving party may not
rest upon the mere allegations or denials of the party's pleadings. Dresher at 293; Civ.R.
56(E). Rather, the burden then shifts to the nonmoving party to respond, with affidavits
or as otherwise permitted by Civ.R. 56, setting forth specific facts that show that there is
a genuine issue of material fact for trial. Dresher at 293. Throughout, the evidence must
be construed in favor of the nonmoving party. Id.{¶ 12} We review the trial court's ruling on a motion for summary judgment de
novo. Schroeder v. Henness, 2d Dist. Miami No. 2012-CA-18, 2013-Ohio-2767, ¶ 42.
De novo review means that this court uses the same standard that the trial court should
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have used, and we examine all the Civ.R. 56 evidence, without deference to the trial court,
to determine whether, as a matter of law, no genuine issues exist for trial. Ward v. Bond,
2d Dist. Champaign No. 2015-CA-2, 2015-Ohio-4297, ¶ 8.
{¶ 13} In Bradford, 19 Ohio St. 546, the plaintiff instituted proceedings to contest
a decedent's will. The trial court held that the will was valid and that, in light of the “no
contest” clause contained in the will, the plaintiff had forfeited all rights to any share of the
estate. The “no contest” clause contained in the decedent's will provided that: “Now, if
any of my heirs is dissatisfied and goes to law to break this will, then my will is and I direct
that they shall have no part of my estate, and I debar them from any part of my estate
whatever.” Id. at 546.
{¶ 14} The plaintiff appealed the trial court's decision, claiming that the “no contest”
clause was void in law because it was an in terrorem clause. The plaintiff also claimed
that he had commenced the action because he believed the will had been improperly
admitted to probate; when the will was admitted, the probate judge left blanks in the record
of the will, which he later filled in so as to correspond with the original. The Ohio
Supreme Court, however, affirmed the decision of the trial court, holding:
A condition in a will whereby the testator excludes any one of his heirs who
“goes to law to break his will” from any part or share of his estate, is valid
and binding; and effect will be given to it, as well in respect to bequests of
personalty, as to devises of real estate.
Id. at paragraph one of the syllabus.
{¶ 15} Since Bradford, courts have noted that the rule of law expressed in Bradford
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is strict. As a result, few courts have addressed the applicability of a good-faith exception
to a “no contest” clause. Modie v. Andrews, 9th Dist. Summit No. C.A. 21029, 2002-
Ohio-5765, ¶ 14. Modie addressed Bender v. Bateman, 33 Ohio App. 66, 69, 168 N.E.
574 (5th Dist.1929), in which the court addressed whether “[the ‘no-contest’] clause of the
testator's will disinheriting any legatee or devisee who contests his will [was] valid, or void
and against public policy, and, if valid, has the rule an exception where there is probable
and just cause for contest?” Modie concluded that Bateman, relying on the Ohio
Supreme Court’s holding in Bradford, had “refused to acknowledge a good-faith exception
to ‘no contest’ clauses.” Quoting Bateman, Modie stated:
“It has been strenuously insisted that there is an exception to the
general forfeiture rule when the legatee, upon probable cause, and in good
faith, contests the will[.] * * * [W]e reach the opinion that to recognize such
an exception would in fact destroy the rule itself, and we find that the weight
of authorities recognizes no exception to the rule.
“A testator has [an] unquestioned right to attach any condition to his
gift which is not violative of law or public policy. The legatee may choose
to take the gift with the conditions attached, or reject it. It should be the
first duty of a court to guard the intention of the testator, and not to substitute
official duress.” Bender, 33 Ohio App. at 69-70, 168 N.E. 574.
Modie at ¶ 15-16, quoting Bateman.
{¶ 16} As previously stated, Robin argues that, before enforcing an in terrorem
clause, the court should consider whether a “public policy” or “good faith” exception
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applies, because she has alleged that the Amendment to the Trust was procured as a
result of undue influence and/or lack of testamentary capacity. Robin has provided no
case law to support her position.
{¶ 17} In Modie, the plaintiff filed an action to contest her mother’s will. The will
admitted to probate contained an in terrorem clause. The defendant argued that by filing
the will contest action, objections to the sale of the decedent's motor home, exceptions to
the defendant's inventory of probate assets, and a motion to remove the fiduciary, the
plaintiff had forfeited her interests pursuant to the in terrorem clause contained in the
decedent's will. Id. at ¶ 4. The trial court ruled in favor of the plaintiff, holding that the in
terrorem clause did not act to bar her will contest action.
{¶ 18} On appeal, the appellate court held:
* * * We agree with the court in Bender, when it reasoned that for a court to
acknowledge “such an exception would in fact destroy the rule itself.” * * *
Bender, 33 Ohio App. at 69, 168 N.E. 574. Therefore, we conclude that
there is no good-faith exception to “no contest” clauses. As such, we find
that Modie's will contest action invoked the “no contest” clause, thereby
barring Modie from taking under the will in spite of her argument that the
action was brought in good faith. Consequently, the trial court erred by
finding in favor of Modie on Appellant's counterclaim.
Id. at ¶ 22; see also Foelsch v. Farson, 3d Dist. Knox No. 19CA000036, 2020-Ohio-1259,
¶ 45 (“We find the trial court correctly concluded Appellant initiated and maintained
causes of action directly attacking and attempting to invalidate the trust and its
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amendments, thereby invoking the forfeiture clause.”).
{¶ 19} It is undisputed that on December 29, 2020, Robin filed a complaint for
declaratory judgment in the common pleas court challenging the validity of the
Amendment and a claim to remove Gretchen and Philip as successor trustees (Case No.
20-CV-550). On March 5, 2021, Robin then filed an amended complaint removing
Robert’s guardian as a party and restating the claims made in her original declaratory
judgment complaint. Robin’s act of filing the declaratory judgment complaint in the trial
court triggered the application of the in terrorem clause in the Trust, thereby divesting her
of her status as a beneficiary of the Trust.
{¶ 20} Lack of standing challenges the legal capacity of a party to bring an action
or to continue to prosecute an action. State ex rel. Dallman v. Franklin Cty. Court of
Common Pleas, 35 Ohio St.2d 176, 178, 298 N.E.2d 515 (1973). In an action contesting
the validity of a will, R.C. 2107.71 requires that the party challenging the will be “a person
interested” in the will. Several courts have defined “interested” as a person who has a
“direct, pecuniary interest” in the estate. See In re Guardianship of Dougherty, 63 Ohio
App.3d 289, 291, 578 N.E.2d 832 (2d Dist.1989); In re Estate of Matusoff, 10 Ohio App.2d
113, 226 N.E.2d 140 (2d Dist.1965). A party who is not a beneficiary of the decedent’s
estate can make no showing that he or she has any direct pecuniary interest in the estate.
In re Estate of Abraitis, 8th Dist. Cuyahoga No. 109810, 2021-Ohio-1408, ¶ 16.
{¶ 21} In an analogous situation, a sibling who was not a current beneficiary of a
trust was found not to have standing to bring an action to remove a trustee pursuant to
R.C. 5807.06(A). See Papps v. Karras, 6th Dist. Lucas No. L-14-1246, 2015-Ohio-1055,
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¶ 11 (“R.C. 5807.06(A) provides: ‘The settlor, a co-trustee, or a beneficiary may request
the court to remove a trustee, or the court may remove a trustee on its own initiative.’
The trial court examined appellant's interest in the trust and concluded that appellant was
not a beneficiary under R.C. 5807.06(A).”).
{¶ 22} Here, once the in terrorem clause was triggered by Robin’s act of filing the
declaratory judgment complaint, she was divested of her status as a beneficiary of
Robert’s Trust, and she no longer possessed a pecuniary interest in the Trust. With no
pecuniary interest in the Trust, Robin lacked standing to file a motion in the probate court
to remove Gretchen as the executor of the estate. Accordingly, the probate court did not
err when it granted Gretchen’s motion for summary judgment. While we are aware that
the strict application of an in terrorem may act to unfairly deprive a litigant of an adequate
remedy at law, the Ohio Supreme Court’s holding in Bradford and its progeny is clear,
namely that no contest clauses are to be strictly construed against those wishing to
challenge a will or trust.
{¶ 23} Robin’s assignment of error is overruled.
{¶ 24} The judgment of the probate court is affirmed.
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TUCKER, P.J. and LEWIS, J., concur.
Copies sent to:
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Robert J. Huffman, Jr.
Robert M. Harrelson
William M. Harrelson, II
Jose M. Lopez
T. Andrew Vollmar
Hon. Jason Aslinger