FORT HOOD, P.J.
These cases involve extremely contentious probate court litigation arising out of the death of Gerald L. Pollack on June 27, 2009, following a protracted battle with brain cancer. Gerald was the owner and director of Gerald L. Pollack & Associates, Inc. (GLP), GLP Investment Services (Investment Services) and GLP Specialty Services (Specialty Services). GLP and Investment Services are investment firms that specialize in selling annuities, insurance products, and securities to public schools and school systems in Michigan. GLP and Investment Services are the primary assets of Gerald's estate. Gerald was survived by his second wife, Cheryl. Justin Pollack is the child of Gerald and Cheryl. Loren, Leslie, Lisa Chaben, and Lori Pollack are Gerald's children from his first marriage. Barron has served as general legal counsel to GLP and Investment Services since the 1980s and was a personal friend of Gerald's. Barron and JPMorgan Chase (JPMC) are cotrustees of the trust at issue in this case and copersonal representatives of Gerald's estate. According to Loren, Loren and a GLP employee named Alex Kocoves were part of Gerald's succession plan for his businesses; Loren and Kocoves were each sold GLP stock by Gerald.
Gerald was diagnosed with brain cancer in the summer of 2008. Following this diagnosis, Barron wrote an August 5, 2008 letter to Gerald recognizing that Loren and Kocoves would continue to comanage GLP after Gerald's death, that Cheryl and each of Gerald's children would share in the profitability of the businesses, and that Cheryl and each of Gerald's children would receive a portion of the ownership and income from the businesses. In September 2008, Gerald executed a will (the September Will) and a trust (the September Trust). Barron drafted both of these documents at Gerald's direction and with input from Gerald. According to Loren, the September Will and the September Trust were the culmination of a lengthy and detailed process of preparation by Gerald for the continued well-being of his family and businesses following his death, and both September documents carried out Gerald's intent as set forth in numerous other documents prepared as part of his estate plan. According to Barron, however,
In October 2008, attorney Charles Nida was hired to prepare a second will and trust for Gerald. According to Loren, it was Barron who recruited Nida, and Gerald had no contact with Nida until the October Will and the October Trust were executed on October 30, 2008. Loren alleged that Nida took direction from Barron or other attorneys at Barron's law firm. Barron denied Loren's allegations, and asserted that Nida had been in contact with Gerald before the execution of the October estate planning documents. Nida had conversations not only with Barron but also with Gerald's former estate planning attorney, Don L. Rosenberg, and Gerald's personal banker and former co-trustee, David Clark. On October 30, 2008, Nida visited with Gerald at Gerald's home. The estate documents were already finalized at that point, and Nida reviewed a written summary of the documents with Gerald. Gerald executed the October Will and the October Trust on that date.
Loren alleges that the October Trust differs significantly from the September Trust; in particular, Gerald's children do not receive any immediate benefit from the October Trust until Cheryl's death; Cheryl's life expectancy is 20 years. Also, Loren contends, the October Trust does not provide for the succession planning desired by Gerald in that it does not distribute shares of GLP to Loren or provide for the continued operation of GLP by Loren and Kocoves. Rather, the October Trust directs Gerald's assets to a marital share for Cheryl's benefit up to $10 million; until this marital share is completely funded, or Cheryl dies, Gerald's children may receive nothing. Even after Cheryl dies, Loren would receive only a beneficial share of the trust corpus rather than stock in GLP.
Four actions in relation to Gerald's Will and Trust were filed in the trial court and form the basis of this appeal. The trial court ultimately granted summary disposition in each case, and dismissed the actions. Petitioners now appeal.
In Docket No. 309796, Loren argues that the trial court erred by granting Barron's motion for summary disposition on the basis of the expiration of the statute of limitations. We disagree.
"This Court reviews de novo a trial court's decision on a motion for summary disposition." Hackel v. Macomb Comm., 298 Mich.App. 311, 315, 826 N.W.2d 753 (2012). Summary disposition may be granted under MCR 2.116(C)(7) when a statute of limitations bars a claim. Prins v. Mich. State Police, 291 Mich.App. 586, 589, 805 N.W.2d 619 (2011). If the facts are not in dispute, the issue whether a claim is barred by the applicable statute of limitations presents a question of law that is reviewed de novo. Trentadue v. Buckler Automatic Lawn Sprinkler Co., 479 Mich. 378, 386, 738 N.W.2d 664 (2007). Questions of statutory interpretation are likewise reviewed de novo. Id. "If the language in a statute is clear and unambiguous, this Court assumes that the Legislature intended its plain meaning, and the statute must be enforced as written. This Court may read nothing into an unambiguous statute that is not within the manifest intent of the Legislature as derived from the words of the statute itself." Bay City v. Bay Co. Treasurer, 292 Mich.App. 156,
The trial court properly granted Barron's motion for summary disposition because Loren's petition to set aside the October Trust was barred by the statute of limitations in the Michigan Trust Code (MTC).
The MTC, MCL 700.7101 et seq., which concerns trusts, is Article VII of the Estates and Protected Individuals Code (EPIC), MCL 700.1101 et seq.; the MTC became effective on April 1, 2010, which was 10 years after EPIC itself went into effect. See MCL 700.7101; MCL 700.7102; 2009 PA 46, 1998 PA 386; Indep. Bank v. Hammel Assoc., LLC, 301 Mich.App. 502, 509, 836 N.W.2d 737 (2013). MCL 700.7604(1) is a provision of the MTC that prescribes limitation periods for bringing a challenge to the validity of a trust:
Therefore, under the MTC, a challenge to the validity of a trust must be brought within two years after the settlor's death or six months after the provision of a notice containing statutorily prescribed information, whichever is earlier.
It is undisputed that, if the statute of limitations in MCL 700.7604(1) applies, then Loren's petition was not timely filed. The settlor, Gerald, died on June 27, 2009. On May 6, 2010, the trustees sent to Loren and the other beneficiaries a written notice containing all the statutorily prescribed information concerning the Trust. Loren concedes that the notice contained all the information required by MCL 700.7604(1)(b). The notice explicitly advised Loren: "You have six months to contest the validity of the Trust pursuant to MCL 700.7604(1)(b)(vii). Any contest filed after the six-month period will be time-barred." In the summer of 2010, during settlement negotiations that were ultimately unsuccessful, the parties twice expressly agreed to toll the six-month limitations period for bringing a challenge to the Trust, each time for a period of 30 days. In effect, then, the six-month limitations period in MCL 700.7604(1)(b) was tolled for 60 days, moving the statutory deadline for filing a petition challenging the validity of the Trust from November 6, 2010, to January 5, 2011. Loren commenced this proceeding on September 23, 2011, by filing his petition challenging the validity of the Trust. See MCL 700.1106(r) (defining a "proceeding" for purposes of EPIC to include, inter alia, a petition); MCR 5.101(B) ("A proceeding [in probate court] is commenced by filing an application or a petition with the court."). The proceeding was therefore commenced more than two years after Gerald died and more than eight months
Loren contends, however, that the MTC statute of limitations does not apply in this case. In particular, Loren asserts that because the MTC became effective after Loren had already acquired his right to challenge the validity of the Trust, the MTC limitations period cannot apply. It is true that statutes of limitations are generally limited to prospective application unless the Legislature clearly and unequivocally manifests a contrary intent. Davis v. State Employees' Retirement Bd., 272 Mich.App. 151, 161, 725 N.W.2d 56 (2006). "The legislature may pass statutes of limitation and give them retroactive effect." Evans Prod. Co. v. State Bd. of Escheats, 307 Mich. 506, 546, 12 N.W.2d 448 (1943). In assessing whether this case involves an improper retroactive application of a statute of limitations, it must be remembered that the six-month statutory period set forth in MCL 700.7604(1)(b) did not commence to run until after the MTC's effective date. That is, the six-month period was triggered when the trustees sent to Loren and the other beneficiaries the statutorily prescribed notice concerning the Trust. This notice was sent on May 6, 2010, after the April 1, 2010 effective date of the MTC, and explicitly advised Loren of the six-month statutory period. Because the limitations period did not begin to run until after the MTC's effective date, Loren had the full six-month period to file suit that all other beneficiaries have after the provision of notice under the MTC. Therefore, the statute of limitations in this case did not fail to provide a reasonable time after its passage for the commencement of suit. Cf. Price v. Hopkin, 13 Mich. 318, 324-325 (1865) ("It is of the essence of a law of limitation that it shall afford a reasonable time within which suit may be brought; and a statute that fails to do this cannot possibly be sustained as a law of limitations, but would be a palpable violation of the constitutional provision that no person shall be deprived of property without due process of law.") (citations omitted).
Moreover, the Legislature has clearly and unequivocally manifested its intent to apply the MTC statute of limitations in the circumstances of this case, when the proceeding was commenced after the effective date of the MTC. MCL 700.8206(1) provides, in relevant part:
This provision states that the MTC applies to trusts that were created before, on, or after the effective date of the MTC, thereby encompassing all trusts, and that the MTC applies to all judicial proceedings concerning trusts that are commenced on or after the MTC's effective date. As discussed, the MTC went into effect on April 1, 2010. Loren commenced this proceeding on September 23, 2011, by filing his petition challenging the validity of the Trust. Therefore, this proceeding was commenced after the effective date of the MTC. It follows, then, that under MCL
Loren contends, however, that the MTC statute of limitations cannot apply in this case in light of MCL 700.8206(2), which states:
See also Indep. Bank, 301 Mich.App. at 509, 836 N.W.2d 737 ("The MTC applies to trusts created before its enactment, but does not impair accrued rights or affect an act done before its effective date."), citing MCL 700.8206(1)(a) and (2). Loren argues that application of the MTC statute of limitations in this case would impair his accrued right to challenge the validity of the Trust. We disagree and hold that Loren's right to challenge the validity of the Trust did not accrue before the effective date of the MTC, and, even if the right had accrued, the application of the six-month statutory period did not impair that right.
Loren did not have an accrued right to bring his Trust challenge petition before the effective date of the MTC. Neither the MTC nor EPIC defines the term "accrued right." However, this Court has addressed the meaning of "accrued right" in cases concerning EPIC.
In In re Smith Estate, 252 Mich.App. 120, 124-125, 651 N.W.2d 153 (2002), this Court addressed the applicability of an EPIC provision allowing the admission of extrinsic evidence to prove the existence of testamentary intent with respect to a purported codicil to an existing will. The action was commenced before the effective date of EPIC, but the case remained pending when EPIC took effect. Id. at 127, 651 N.W.2d 153. This Court held that the EPIC provision was applicable. Id. at 126, 651 N.W.2d 153. This Court noted that under MCL 700.8101(2)(b), EPIC applied to a proceeding pending on the date that EPIC became effective, but that under MCL 700.8101(2)(d), EPIC "`does not impair an accrued right or an action taken before that date in a proceeding.'" Id. This Court rejected the probate court's conclusion that the decedent's heirs had an accrued right to inherit disputed funds pursuant to the existing will rather than under
Likewise, in In re Leete Estate, 290 Mich.App. 647, 663-664, 803 N.W.2d 889 (2010), this Court upheld the applicability of an EPIC provision known as the 120-hour rule, or simultaneous-death provision, even though the property deed and the will at issue were executed before the effective date of EPIC. This Court noted that "EPIC applies to a governing instrument executed before EPIC came into effect, as long as it does not affect an accrued right and as long as the governing instrument does not contain a contrary intent." Id. at 663, 803 N.W.2d 889. This Court held that no accrued right would be impaired by applying EPIC. Id. After noting the definition of "accrued right" set forth in Smith, the Leete Court held that the appellant had obtained no fixed or accrued right by way of the will before the effective date of EPIC. Id. at 663-664, 803 N.W.2d 889. Further, the appellant obtained no such right when the decedents died because the appellant's interest in the property at issue was still subject to change. Id. at 664, 803 N.W.2d 889. Thus, EPIC was applicable. Id.
Although Smith did not involve a statute of limitations issue, Smith explicated the meaning of the term "accrued right" as used in a provision of EPIC. Because the MTC is a component of EPIC, and because the term "accrued right" is also used in the MTC provision at issue here, MCL 700.8206(2), we find it useful to consider the analysis of that term in Smith when determining whether Loren possessed an
Loren contends that he had an accrued right to challenge the October Trust before the MTC became effective, so the MTC statute of limitations cannot be applied to impair that right. However, Loren did not have a right to challenge the Trust that was so fixed that it could not be changed by a future act or contingency. See Smith, 252 Mich.App. at 127-129, 651 N.W.2d 153. Loren's right to challenge the Trust could be changed or forfeited in various ways. For example, if Loren accepted a partial distribution under the Trust, he would be estopped from challenging the Trust under the doctrine of election. See In re Beglinger Trust, 221 Mich.App. 273, 276-277, 561 N.W.2d 130 (1997). Other contingencies such as the application of the doctrine of laches, a waiver, or a release could also have changed or taken away Loren's right to challenge the Trust. To the extent that Loren's interest as a Trust beneficiary is at issue, as opposed to his right to challenge the Trust, that interest also is not so fixed or immutable that it excludes all other interests. Cheryl is the only current beneficiary because the Trust corpus is insufficient to fund the entire marital trust at this time, and Cheryl could deplete the corpus in her lifetime. Accordingly, Loren's interest is not so fixed or immutable that it constitutes an accrued right.
Nonetheless, even assuming that Loren's right to challenge the Trust constituted an accrued right, the application of the MTC statute of limitations did not impair that accrued right. Because the MTC and EPIC do not define the word "impair," it is permissible to consider a dictionary definition of the term. Bedford Pub. Sch. v. Bedford Ed. Ass'n, 305 Mich.App. 558, 566 n. 2, 853 N.W.2d 452 (2014). The word "impair" means "to make or cause to become worse; weaken; damage[.]" Random House Webster's College Dictionary (2001). In Finlay, 430 Mich. at 596-600, 424 N.W.2d 272, our Supreme Court upheld the application of a Revised Probate Code (RPC)
Likewise, the application of the MTC statute of limitations did not impair, i.e., weaken, worsen, or damage, Loren's right to challenge the Trust. "Statutes of limitation are procedural devices intended to promote judicial economy and the rights of defendants." Stephens v. Dixon, 449 Mich. 531, 534, 536 N.W.2d 755 (1995). "They also prevent plaintiffs from sleeping on their rights[.]" Id. Application of the MTC six-month statutory limitations period did not deprive Loren of his right to challenge the Trust. It merely required
Next, Loren suggests that the application of the MTC statute of limitations is barred by the second sentence of MCL 700.8206(2); again, that provision states:
Loren asserts that the "right" referred to in the second sentence does not have to be an accrued right. He contends that the trial court improperly inserted the word "accrued" into the second sentence of MCL 700.8206(2). However, statutory language "cannot be read in a vacuum." G.C. Timmis & Co. v. Guardian Alarm Co., 468 Mich. 416, 421, 662 N.W.2d 710 (2003). "Although a phrase or a statement may mean one thing when read in isolation, it may mean something substantially different when read in context. In seeking meaning, words and clauses will not be divorced from those which precede and those which follow." Id. (quotation marks and citations omitted). It appears evident that the word "right" in the second sentence of MCL 700.8206(2) is a reference to the term "accrued right" used in the immediately preceding sentence. In other words, the second sentence serves to effectuate the first sentence by providing that accrued rights acquired, extinguished, or barred upon the expiration of a prescribed period that began under another statute before the effective date of the MTC continue to be governed by the other statute.
Moreover, even if the second sentence of MCL 700.8206(2) applies to rights that are not accrued, the second sentence does not apply here. Loren has no rights that were acquired, extinguished, or barred upon the expiration of a prescribed period that began to run before the MTC's effective date. Loren asserts that before the adoption of the MTC, the general six-year period of limitations set forth in MCL 600.5813 applied to a trust challenge, and
Finally, Loren contends that the application of the MTC statute of limitations violates constitutional due process principles by impairing Loren's vested right to bring his Trust challenge. We disagree. Generally, "[t]he legislature may pass statutes of limitation and give them retroactive effect." Evans Prod. Co., 307 Mich. at 546, 12 N.W.2d 448. Nonetheless, the retroactive application of a statute of limitations may offend due process if a claimant is not afforded a reasonable time to file suit. See Price, 13 Mich. at 324-325 ("It is of the essence of a law of limitation that it shall afford a reasonable time within which suit may be brought; and a statute that fails to do this cannot possibly be sustained as a law of limitations, but would be a palpable violation of the constitutional provision that no person shall be deprived of property without due process of law.") (citations omitted); see also O'Brien v. Hazelet & Erdal, 410 Mich. 1, 15 n. 18, 299 N.W.2d 336 (1980) (citing Price for the proposition that a statute might deny due process if it fails to afford a reasonable time to bring suit). Loren received the full six-month statutory period to bring his claim after receiving the requisite notice from the trustees, and an additional 60 days under the parties' tolling agreements. The notice that triggered the six-month period was provided after the effective date of the MTC, and Loren concedes that the notice contained all the statutorily prescribed information, including the time allowed for commencing the proceeding. Loren was thereby afforded the same notice and the same time in which to file suit as all other beneficiaries under the MTC. Because the application of the MTC statute of limitations afforded Loren a reasonable time to file suit, his due process claim lacks merit.
In sum, the trial court properly granted Barron's motion for summary disposition because Loren's petition to set aside the October Trust was barred by the statute of limitations in the MTC.
In Docket No. 310844,
"This Court reviews de novo a trial court's decision on a motion for summary disposition." Hackel, 298 Mich.App. at 315, 826 N.W.2d 753. "In reviewing a motion under MCR 2.116(C)(10), this Court considers the pleadings, admissions, affidavits, and other relevant documentary evidence of record in the light most favorable to the nonmoving party to determine whether any genuine issue of material fact exists to warrant a trial." Walsh v. Taylor, 263 Mich.App. 618, 621, 689 N.W.2d 506 (2004). "Summary disposition is appropriate if there is no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law." Latham v. Barton Malow Co., 480 Mich. 105, 111, 746 N.W.2d 868 (2008). "A genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which reasonable minds might differ." West v. Gen. Motors Corp., 469 Mich. 177, 183, 665 N.W.2d 468 (2003).
The trial court properly granted Cheryl's motion for summary disposition on the petition to set aside the October Will because there was no evidence to establish the benefit element of a presumption of undue influence.
A party contesting a will has the burden of establishing undue influence. MCL 700.3407(1)(c), (d).
On appeal, petitioners do not assert that there was direct evidence of undue influence but contend that there was evidence establishing the elements giving rise to a presumption of undue influence. The primary element in dispute concerns whether Barron benefited from the transaction.
"Appointment of the scrivener as trustee alone does not create a substantial benefit sufficient to raise the presumption of undue influence." In re Vollbrecht Estate, 26 Mich.App. 430, 436, 182 N.W.2d 609 (1970). "[T]he mere appointment of a fiduciary as executor of the will, or even trustee of a limited testamentary trust, would not alone establish the kind of benefit necessary to raise the presumption [of undue influence]." Id. "The determination should be made in light of all the powers, privileges, and duties given the trustee and all the instruments concerned." Id. at 437, 182 N.W.2d 609. This Court in Vollbrecht found sufficient evidence for the jury to find the substantial personal benefit necessary to raise the presumption because there was "evidence that the trustees of the charitable foundation have the powers
In this case, there was insufficient evidence of personal substantial benefit to Barron to give rise to a presumption of undue influence. Although Barron serves as a cotrustee of the Trust along with JPMC, this fact alone does not comprise a sufficient benefit to give rise to the presumption. Id. at 436, 182 N.W.2d 609. Further, Barron must make all decisions as cotrustee in conjunction with the other cotrustee, JPMC, and petitioners have not alleged that JPMC has exerted undue influence or acted improperly in connection with this matter.
In addition, Barron received no substantial benefit from the October Will that he did not already receive under the September Will, which petitioners conceded reflected Gerald's intent. Although petitioners at one point assert on appeal that there are "substantial differences" between the September Will and the October Will, petitioners do not explicate any significant differences with respect to the benefits conferred on Barron by the two wills, and petitioners later admit that the October Will reflects little if any change from the September Will in respect to the benefits conferred on Barron. Indeed, petitioners state that the terms of the September Will benefitting Barron were "mostly carried over into the October Will...." Although petitioners assert on appeal that the September Will was also the product of undue influence, petitioners made no such claim in the trial court. Failure to timely raise an issue in the trial court generally waives review of that issue on appeal. Napier v. Jacobs, 429 Mich. 222, 227-228, 414 N.W.2d 862 (1987).
Further, petitioners expressly alleged in the trial court that the September Will and the September Trust carried out Gerald's intent as set forth in a letter by Gerald and in voluminous documents prepared by Gerald in respect to his estate planning. "A party may not take a position in the trial court and subsequently seek redress in an appellate court that is based on a position contrary to that taken in the trial court." Holmes v. Holmes, 281 Mich.App. 575, 587-588, 760 N.W.2d 300 (2008) (citation and quotation marks omitted). Because petitioners conceded in the trial court that the September Will and the September Trust reflected Gerald's intent as demonstrated in numerous earlier estate planning documents, and because Barron did not receive a substantial benefit from the October Will that differed from that afforded under the September Will, petitioners have not established that Barron received a benefit from the October Will sufficient to give rise to a presumption of undue influence.
Given that petitioners have not established the benefit prong required to give rise to a presumption of undue influence, it is unnecessary to address the other two prongs.
Petitioners next argue that the trial court erred by granting Cheryl's motion for summary disposition on the petition to set aside the October Will on the ground of mistake.
The trial court properly granted Cheryl's motion for summary disposition on the petition to set aside the October Will because there was no genuine issue of material fact concerning petitioners' claim of mistake.
The allegation of mistake in the petition was that Nida failed to inform Gerald which trust the October Will would fund. There is no evidence in the record that Gerald was mistaken on this point. Clark testified that the operation of the October Trust and the distribution of assets were discussed with Gerald when the October estate documents were executed, that Gerald asked questions, and that the participants made sure Gerald understood what was happening. Nida testified that he asked Gerald at the time of the execution of the October estate documents if Nida had captured Gerald's wishes. The evidence does not present a question of fact concerning whether Gerald was mistaken regarding which trust would be funded by the October Will.
On appeal and in response to the summary disposition motion, petitioners changed the factual basis for the allegation of mistake from that set forth in the petition. Petitioners now contend that Gerald was mistaken regarding the value of his estate, believing it to be worth $75 million to $100 million, and that this mistake affected Gerald's decision to leave the first $10 million to Cheryl under the marital trust. The record fails to support the view that any mistake regarding the value of the estate affected Gerald's decision. On the contrary, Clark testified that, even after being asked about the possibility that the value of the estate was less than he thought, Gerald adhered to his desire to leave the first $10 million to Cheryl. Therefore, there is no genuine issue of material fact concerning whether any mistake regarding the value of the estate affected Gerald's decision to execute the October Will.
In Docket No. 310846,
Initially, we note that this issue is unpreserved. To preserve for appellate review an issue regarding standing, the defendant must have raised the issue in his or her first responsive pleading or motion. MCR 2.116(C)(5); MCR 2.116(D)(2); Glen Lake-Crystal River Watershed Riparians v. Glen Lake Ass'n, 264 Mich.App. 523,
Whether a party has standing is a question of law that this Court reviews de novo. Id. at 527, 695 N.W.2d 508. "Review of an unpreserved error is limited to determining whether a plain error occurred that affected substantial rights." Rivette v. Rose-Molina, 278 Mich.App. 327, 328, 750 N.W.2d 603 (2008).
Loren's argument that Barron and JPMC lack standing to oppose the petition to modify or reform the Trust is devoid of merit.
Initially, we note that the issue of the trustees' standing is moot because Cheryl concurred in Barron's motion for summary disposition and it is undisputed that Cheryl possesses standing to oppose Loren's petition to modify or reform the Trust. "This Court's duty is to consider and decide actual cases and controversies." Morales v. Parole Bd., 260 Mich.App. 29, 32, 676 N.W.2d 221 (2003). This Court generally does not address moot questions or declare legal principles that have no practical effect in a case. Id. "An issue is moot if an event has occurred that renders it impossible for the court to grant relief. An issue is also moot when a judgment, if entered, cannot for any reason have a practical legal effect on the existing controversy." Gen. Motors Corp. v. Dep't of Treasury, 290 Mich.App. 355, 386, 803 N.W.2d 698 (2010) (citation omitted). Given that Cheryl concurred in the motion and that Loren has not contested her standing to oppose the petition to modify or reform the Trust, the issue whether Barron or JPMC possessed standing to oppose the petition or to seek summary disposition has no practical legal effect in this case. The court was permitted to grant summary disposition, and the issue of the trustees' standing is moot. However, we further address the merits of the issue for the sake of thoroughness.
In Lansing Sch. Ed. Ass'n v. Lansing Bd. of Ed., 487 Mich. 349, 372, 792 N.W.2d 686 (2010), the Michigan Supreme Court explicated the following principles regarding standing:
It must be noted that the trustees have not asserted a cause of action; therefore, Loren's challenge to the trustees' standing is inapt. After all, it was Loren who commenced this action by filing his petition to modify the Trust. The trustees merely opposed the petition and moved for summary disposition. In any event, it is clear that the trustees have a special right or substantial interest that will be detrimentally affected in a manner different from the citizenry at large. Although Loren contends that his reformation petition does not seek to invalidate the Trust, and that the trustees therefore have no interest in a dispute between beneficiaries concerning the proper distribution of the Trust's assets, the amended petition itself directly contradicts Loren's argument. The amended petition to modify or reform the Trust explicitly states that Gerald's "execution of the October Trust is invalid due to the `mistake of fact' under which [Gerald] was acting when he executed the October Trust." The amended petition sought modification or reformation of the Trust to change the distribution of assets and to terminate Barron as a cotrustee. In short, the amended petition asserted the Trust was invalid and sought modification of essential provisions of the Trust concerning the distribution of assets and successor trustees.
Claiming that the Trust is the product of a mistake of fact and seeking to significantly change material provisions concerning the distribution of the Trust's assets and the successor trustees is plainly an attack on the validity of the Trust. The Trust Agreement, which created the Trust, obligated the trustees to enforce the agreement in actions challenging its validity. Under the MTC, a trustee is required to administer a trust in accordance with its terms and purposes, MCL 700.7801, and may exercise all the powers conferred by the terms of the trust, MCL 700.7816(1)(a). See also MCL 700.1105(c) (defining "interested person" to include the incumbent fiduciary); MCR 5.125(C)(32)(e) (listing the current trustee as a person interested in the modification or termination of a noncharitable irrevocable trust); MCR 5.125(C)(33)(c) (listing the current trustee as a person interested in a proceeding affecting a trust other than proceedings covered by other subrules).
In In re Temple Marital Trust, 278 Mich.App. 122, 133-134, 748 N.W.2d 265 (2008), this Court held that two brothers acting in their capacities as trustees were entitled to recover attorney fees from trust assets for defending against a challenge to the validity of a trust amendment when the outcome of the litigation would determine which brother was the proper successor trustee and the terms of asset distribution. This Court explained:
As discussed, the amended petition to modify or reform the Trust was an attack on the validity of the Trust seeking to change the distribution of assets and the cotrustee, and the trustees had an obligation to enforce the Trust Agreement in connection with challenges to the validity
Loren next argues that the trial court erred by granting Barron's motion for summary disposition on Loren's petition to modify or reform the trust based on the expiration of the statute of the limitations. We disagree.
Loren asserts two arguments relating to the trial court's application of the MTC statute of limitations to his petition for reformation of the Trust. As discussed earlier, MCL 700.7604(1) is a provision of the MTC that prescribes limitation periods for bringing a challenge to the validity of a trust. Loren concedes that he filed his petition to modify or reform the Trust more than two years after Gerald's death and more than six months after the statutorily prescribed notice was sent to Loren. Nonetheless, Loren contends that the period of limitations in MCL 700.7604(1) does not apply because his petition to modify or reform the Trust did not commence a judicial proceeding to contest the validity of the Trust. Rather, he argues, his petition was merely seeking to modify or reform the terms of the Trust rather than to invalidate the Trust. We disagree.
"In deciding which period of limitations controls, we must first determine the true nature of the claim." Adams v. Adams (On Reconsideration), 276 Mich.App. 704, 710, 742 N.W.2d 399 (2007). "It is well settled that the gravamen of an action is determined by reading the complaint as a whole, and by looking beyond mere procedural labels to determine the exact nature of the claim." Id. at 710-711, 742 N.W.2d 399. "A plaintiff may not evade the appropriate limitation period by artful drafting.... The type of interest allegedly harmed is the focal point in determining which limitation period controls." Simmons v. Apex Drug Stores, Inc., 201 Mich.App. 250, 253, 506 N.W.2d 562 (1993).
The procedural label that Loren affixed to his petition is one of modification or reformation. But in reading the petition as a whole, it is evident that the true nature of his claim is to contest the validity of the Trust. Loren alleged essentially the same facts in this petition as those used to support his petition to set aside the Trust. The reformation petition alleged that the October Trust was invalid due to a mistake of fact under which Gerald was acting when he executed the document. It asserted that the Trust failed to provide for a distribution of shares of GLP to Loren, which was in contravention of statements Gerald purportedly made after executing the Trust. The petition further alleged that the evidence showed that the October Trust was the product of a mistake of fact and that it should be reformed to conform to Gerald's intentions. The petition requested modification or reformation of the Trust to provide that Loren receive 25% of the shares in the businesses, that Loren would become a member of the Investment Services board of directors, and that Barron would be terminated as a cotrustee.
Although phrased in terms of modification or reformation, the request for relief effectively sought a wholesale rewriting of the Trust to change its essential provisions concerning distribution of assets and the successor cotrustee. This relief was sought, in part, on the basis of the petition's allegation that the Trust was invalid as it was a product of Gerald's mistake of fact when he executed the document. The
Loren also argues that the period of limitations in MCL 700.7604(1) does not apply retroactively because he had an accrued or vested right to seek reformation of the October Trust before the MTC became effective. Loren's arguments on this issue are duplicative of his arguments in Docket No. 309796, discussed earlier. For the reasons already stated, we hold that the trial court properly dismissed Loren's reformation petition because it was barred by the period of limitations in MCL 700.7604(1).
Leslie also raises two arguments related to the statute of limitations issue in her brief on appeal in Docket No. 310846. Leslie's arguments were addressed earlier in this opinion, and we adhere to our stated analysis. The trial court properly granted Barron's motion for summary disposition regarding Leslie's petition to modify or reform the Trust because the petition was barred by the MTC statute of limitations.
In Docket No. 318883, petitioners argue that the trial court erred by granting Barron's motion for summary disposition on their petition for removal of Barron as cotrustee. We disagree.
Again, a trial court's decision on a motion for summary disposition is reviewed de novo. Hackel, 298 Mich.App. at 315, 826 N.W.2d 753. Questions of statutory interpretation are reviewed de novo. Trentadue, 479 Mich. at 386, 738 N.W.2d 664. "If the language in a statute is clear and unambiguous, this Court assumes that the Legislature intended its plain meaning, and the statute must be enforced as written. This Court may read nothing into an unambiguous statute that is not within the manifest intent of the Legislature as derived from the words of the statute itself." Bay City, 292 Mich.App. at 166-167, 807 N.W.2d 892 (quotation marks and citations omitted).
The trial court properly granted Barron's motion for summary disposition regarding the removal petition.
A provision of the MTC, MCL 700.7706, provides, in relevant part:
On appeal, petitioners first present an unpreserved argument that the grounds for removal set forth in MCL 700.7706(2) are not exclusive and that a trustee may be removed on additional grounds recognized at common law. In Kelsey v. Detroit Trust Co., 265 Mich. 358, 361-362, 251 N.W. 555 (1933), our Supreme Court articulated the grounds on which a trustee could be removed at common law:
In the trial court, petitioners affirmatively sought removal on the basis of grounds listed in MCL 700.7706(2) and did not present the argument advanced on appeal that other grounds existing at common law provided an additional basis for removal. In any event, petitioners' unpreserved appellate contention lacks merit.
"It is axiomatic that the Legislature has the authority to abrogate the common law." Trentadue, 479 Mich. at 389, 738 N.W.2d 664. "In general, where comprehensive legislation prescribes in detail a course of conduct to pursue and the parties and things affected, and designates specific limitations and exceptions, the Legislature will be found to have intended that the statute supersede and replace the common law dealing with the subject matter." Id. at 390, 738 N.W.2d 664 (quotation marks and citations omitted). Further, the MTC is to "be construed and applied to promote its underlying purposes and policies." MCL 700.8201(1). Among the purposes and policies of the MTC identified by the Legislature are (1) "[t]o make more comprehensive and to clarify the law governing trusts in this state," MCL 700.8201(2)(a), and (2) "[t]o foster certainty in the law so that settlors of trusts will have confidence that their instructions will be carried out as expressed in the terms of the trust," MCL 700.8201(2)(c).
In MCL 700.7706(2), the Legislature comprehensively codified a detailed list of grounds containing specific requirements for the removal of a trustee. The statutory grounds encompass a wide range of possible reasons for removing a trustee. By enacting this comprehensive provision, the Legislature expressed its intent that the statute supersede and replace the common-law grounds for removal. See Trentadue, 479 Mich. at 390, 738 N.W.2d 664. If
Next, petitioners argue that the trial court erred by requiring that the grounds for removal be established by clear and convincing evidence in accordance with a provision of the October Trust. Paragraph 5 of the Trust Agreement provides, in relevant part:
Petitioners argue that this provision of the Trust Agreement merely absolves the trustee of liability and does not address removal. Moreover, petitioners contend, the MTC bars enforcement of this language. MCL 700.7908(1) provides:
Petitioners further cite MCL 700.7105(2)(n), which provides that the terms of a trust prevail over any provision of the MTC except, inter alia, "[t]he power of the court to take action and exercise jurisdiction." Petitioners also argue that the trial court improperly weighed evidence in the summary disposition context.
Petitioners' arguments on this point are ultimately unavailing. We agree with petitioners that ¶ 5 of the Trust Agreement is inapplicable. When read in context, the requirement in ¶ 5 of clear and convincing evidence to prove that the trustee failed to act impartially is in reference to a trustee's liability for any act or omission. The term "liable" refers to legal responsibility. Random House Webster's College Dictionary (2001). The issue here does not pertain to holding a trustee legally responsible but instead to the removal of a trustee. However, although the trial court briefly referred to the clear and convincing evidence standard, the court's decision overall reflects that it found no evidence or facts to establish the necessary grounds for removal. In particular, the court found that petitioners did not present any facts from which an inference
Next, petitioners contend that Barron's purported partiality in favor of some beneficiaries and his hostility toward petitioners is evidence of his "unfitness," a proper ground for removal under MCL 700.7706(2)(c). We disagree. Petitioners challenge Barron's actions in defending against their petitions to modify or reform the Trust. Petitioners repeat the arguments Loren advanced in connection with whether Barron possessed standing. As we explained, the petitions to modify or reform the Trust explicitly challenged the validity of the Trust. Barron was obligated under the terms of the Trust to enforce the Trust Agreement in actions challenging the validity of the Trust Agreement, and he was required by statutory law to administer the Trust in accordance with its terms and purposes and was permitted to exercise all the powers conferred by the terms of the Trust. Therefore, petitioners' argument that Barron exhibited partiality favoring some beneficiaries or hostility toward petitioners because he opposed their petitions to modify or reform the Trust is devoid of merit.
Even assuming, however, that Barron was hostile toward petitioners or partial in favor of other beneficiaries, petitioners have not established that such hostility or partiality made him unfit to administer the Trust effectively or that removal of Barron would best serve the purposes of the Trust, both of which must be shown in order to remove Barron under the plain language of MCL 700.7706(2)(c). Again, there is no evidence that the Trust corpus was in any way affected by Barron's alleged hostility or partiality or that petitioners' interests as Trust beneficiaries, as opposed to employees or associates of GLP or sons of Gerald, were affected.
Petitioners next argue that Barron engaged in conduct that revealed a conflict of interest; they assert that Barron's actions of (1) replacing himself on the GLP board of directors with someone subject to his control, and (2) having another attorney take over the circuit court litigation that Barron initiated on GLP's behalf against Loren did not render the conflict of interest moot. Petitioners' arguments are unconvincing. MCL 700.7706(2) does not list "conflict of interest" by itself as a ground for removal. Assuming that "unfitness" could include a conflict of interest under MCL 700.7706(2)(c), petitioners have again failed to demonstrate that any conflicts affected the administration of the Trust or that removal of Barron would best serve the purposes of the Trust. Neither conflicts of interest nor hostility provide a basis for removing a trustee or a personal representative of an estate unless the administration of the trust or estate has been affected. See In re Kramek Estate, 268 Mich.App. 565, 576-577, 710 N.W.2d 753 (2005); In re Sumpter Estate, 166 Mich.App. 48, 53-57, 419 N.W.2d 765 (1988); In re Gerber Trust, 117 Mich.App. 1,
Moreover, Barron did not exhibit a conflict of interest by serving as a director of GLP for a period of time. Paragraph 6C(2)(a)(x) of the Trust Agreement authorized the cotrustees to act as entity owners, including by appointing a cotrustee as a director. The trial court expressed some concern about Barron's acting as an attorney for GLP in filing the circuit court lawsuit against Loren but ultimately concluded that Barron's resignation as attorney shortly after filing the lawsuit and the circuit court's ultimate disposition in favor of GLP's position ameliorated any concerns. The circuit court action was initiated because of what were perceived to be threats by Loren to take damaging actions against GLP. The mere existence of litigation between a trustee and a beneficiary is not a sufficient reason for removal. See Sumpter, 166 Mich.App. at 56, 419 N.W.2d 765; Gerber, 117 Mich.App. at 14, 323 N.W.2d 567. Overall, the trial court properly concluded that the alleged conflicts of interest do not require removal given the absence of evidence of any effect on Trust administration or the interests of the beneficiaries.
The trial court properly granted Barron's motion for summary disposition regarding the removal petition. For the same reasons, we further hold that the trial court did not plainly err by failing to grant summary disposition to petitioners under MCR 2.116(A) or (I)(2).
Affirmed.
HOEKSTRA, J., concurred with FORT HOODS, P.J.
O'CONNELL, J. (dissenting).
I respectfully dissent.
In my opinion, the trial court erred when it granted the motion for summary judgment on the petition to set aside the October will because a question of fact existed regarding whether Ronald Barron exercised undue influence on Gerald Pollack. In Docket No. 310844, I would reverse the trial court's order granting the motion for summary disposition and admitting the October will to probate. I would remand the balance of this case and the related appeals for further proceedings consistent with this opinion.
The majority opinion ably states the facts of this case. However, the following facts are particularly pertinent to this dissent. In the summer of 2008, Gerald Pollack was diagnosed with brain cancer. In September 2008, Ronald Barron, Gerald's good friend and legal counsel, drafted the September will and the September trust. Apparently, the September documents were five years in the planning stage. In very unusual circumstances, one month later, attorney Charles Nida was employed to draft the October will and the October trust. The parties dispute who hired Nida and why he was employed to draft a second will and trust.
Petitioners claim that the October documents differ significantly from the September documents. Pertinent to this appeal, petitioners allege that attorney Ronald Barron was involved in drafting these documents and that he benefitted significantly from them. Barron admits that the October will is a "pour over"
This Court reviews de novo a trial court's decision on a motion for summary disposition. Hackel v. Macomb Co. Comm., 298 Mich.App. 311, 315, 826 N.W.2d 753 (2012). "In reviewing a motion under MCR 2.116(C)(10), this Court considers the pleadings, admissions, affidavits, and other relevant documentary evidence of record in the light most favorable to the nonmoving party to determine whether any genuine issue of material fact exists to warrant a trial." Walsh v. Taylor, 263 Mich.App. 618, 621, 689 N.W.2d 506 (2004). "Summary disposition is appropriate if there is no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law." Latham v. Barton Malow Co., 480 Mich. 105, 111, 746 N.W.2d 868 (2008). A genuine issue of material fact exists when the record, viewed in a light favorable to the opposing party, leaves open an issue on which reasonable minds might differ. West v. Gen. Motors Corp., 469 Mich. 177, 183, 665 N.W.2d 468 (2003).
The central issue in this case is whether the petitioners presented sufficient evidence to create a question of fact regarding whether there was a presumption of undue influence. I conclude that petitioners did present evidence on this element.
A party contesting a will has the burden to establish undue influence. MCL 700.3407(1)(c) and (d).
On appeal, petitioners contend that there was evidence establishing all three of the elements giving rise to a presumption of undue influence. The trial court agreed that petitioners had established the first element (the existence of a confidential or fiduciary relationship between the grantor and a fiduciary) and the third element (the fiduciary had an opportunity to influence the grantor's decision in that transaction). The parties do not dispute the trial court's findings on these elements. At issue in this case is the second element — the fiduciary, or an interest represented by the fiduciary, benefits from the transaction. The primary dispute is whether Barron benefited from the transaction.
Appointment of the scrivener as trustee "alone, without other factors" does not create a substantial benefit. In re Vollbrecht Estate, 26 Mich.App. 430, 436, 182 N.W.2d 609 (1970). The mere appointment of a fiduciary as executor of the will, or even
In Vollbrecht, there was sufficient evidence for the jury to find a substantial personal benefit because there was evidence that the trustees of the charitable foundation had the power to amend the articles of incorporation, determine its activities, and fix their own fees. Id. Other factors that might support a finding of substantial benefit include "the nature and probable duration of the trust, the amount of property involved, the amount of fees which the trustee would receive, the discretionary powers of the trustee, and the fact that the lawyer-scrivener was the sole trustee." See id. at 436, 182 N.W.2d 609.
In this case, there is sufficient evidence of personal substantial benefit to Barron. First, Barron serves as a cotrustee of the trust. Second, the will authorizes Barron to collect compensation for his services. Third, the will authorizes Barron and the cotrustee to completely control Gerald's estate and his company, to the exclusion of Gerald's children. This power includes the right to vote Gerald's 60% of the stock in Gerald L. Pollack & Associates, Inc. (GLP), the main asset in the estate. It also includes the power to name himself a director or officer of the company, to designate a chief operating officer of the company, to pay himself a salary, and to select himself and his law firm as legal counsel for the company. Finally, Barron was the lawyer-scrivener who drafted the September will and, viewing the record in the light most favorable to petitioners, he hired and provided Nida, who drafted the October will.
In my opinion, the record creates a factual question that was improperly resolved in a motion for summary disposition. The fact that Gerald was diagnosed with brain cancer in 2008, that Barron drafted the September documents and, in essence, selected a new attorney to draft the October documents that clearly gave Barron substantial control, creates, at minimum, a factual issue on the second element. Reasonable minds could differ concerning whether the duration of the trust, the amount of fees Barron receives, and his control over the business benefits him.
The trial court erred when it determined as a matter of law that sufficient evidence was not presented to give rise to the presumption of undue influence. Petitioners presented evidence sufficient to create a question of fact on the issue of undue influence and sustain their burden under MCL 700.3407(1)(c).
I would reverse the summary judgment decision of the trial court and remand for further proceedings consistent with this opinion. Because the balance of the issues raised in these appeals depend on the resolution of this issue, this Court cannot address them at this time.
