Allen v. Campbell

499 P.3d 1103

James ALLEN, an individual; Jessica Allen Tchoukalov, an individual; Adam Allen, an individual; Matthew Allen, an individual; Kirsten Allen, an individual; and Michael Allen, an individual, Plaintiffs-Appellants,

v.Neil CAMPBELL and Tamra Campbell, husband and wife; Neil Campbell as trustee of the Brian Villet Campbell and Doris Hamilton Campbell Joint Trust, dated May 23, 2011; Vickey Freeland, as trustee of the Brian Villet Campbell and Doris Hamilton Campbell Joint Trust, dated May 23, 2011; Connie Jo Woods, as trustee of the Brian Villet Campbell and Doris Hamilton Campbell Joint Trust, dated May 23, 2011; and Brian Campbell, Jr., trustee of the Brian Villet Campbell and Doris Hamilton Campbell Joint Trust, dated May 23, 2011, Defendants-Respondents.

DOCKET NO. 48452

Supreme Court of Idaho, Boise, September 2021 Term.

Opinion Filed: December 2, 2021

Parsons, Behle & Latimer, Idaho Falls, for appellants. John E. Cutler argued.

Cooper & Larsen, Chartered, Pocatello, and Turner Law Firm, Dunnellon, Florida, for respondents. J.D. Oborn of Cooper & Larsen, Chartered, argued.

BRODY, Justice.

This is a case about proper venue in a trust dispute. Appellants sued Respondents over alleged self-dealing and other purported breaches of fiduciary duty in the administration of a trust. Respondents argued that proceedings in Idaho were improper under the provisions of Title 15, chapter 7 of the Idaho Code (the "trust code") because they alleged that the principal place of the Trust's administration was in Indiana. The district court agreed and dismissed Appellants’ complaint. We reverse.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Factual background.

Brian Campbell, Sr., and Doris Campbell were the settlors and original trustees of the Brian Villet Campbell and Doris Hamilton Campbell Joint Trust ("the Trust"), which they established to distribute their assets upon the latter of their deaths. Respondents are the settlors’ four living children, as well as Tamra Campbell, wife of respondent Neil Campbell; Appellants are the settlors’ grandchildren from a daughter who predeceased them.

Brian Sr. passed away in 2014 and Doris passed away in 2015. When Doris died, the four surviving children (Respondents Neil Campbell, Vickey Freeland, Brian Campbell, Jr., and Connie Jo Woods) became successor co-trustees of the Trust. One of the grandchildren (Appellant Kirsten Allen) was also a successor co-trustee, but resigned from that position before this lawsuit was commenced. For simplicity, Appellants are hereinafter referred to as "Beneficiaries" (although most of the Respondents are also beneficiaries of the Trust), and Respondents are hereinafter referred to as "Trustees" (although Tamra is not a trustee).

When Doris died, her home in Bonneville County was among the Trust's assets. The underlying dispute between Beneficiaries and Trustees stems, in part, from the Trust's sale of Doris’ home to Neil and Tamra, allegedly based on an outdated appraisal and after Neil and Tamra had occupied the home for a period without paying rent.

B. Procedural background.

In November 2019, Beneficiaries sued Trustees in Bonneville County seeking rescission of the sale of Doris’ home to Neil and Tamra, an accounting of the Trust, damages from alleged breaches of fiduciary duty, removal of the co-trustees, distribution of Trust assets, and termination of the Trust. In February 2020, Trustees moved to dismiss Beneficiaries’ complaint under Idaho Rule of Civil Procedure 12(b), citing several bases for dismissal. Relevant here is their argument that dismissal was warranted for lack of subject matter jurisdiction under Rule 12(b)(1).

As an exhibit to their motion to dismiss, Trustees attached a power of attorney executed in the spring of 2015. The power of attorney designated Respondent Vickey Freeland as attorney-in-fact for the Trust, empowering her "to do all financial acts pertaining to the needs and requirements of the Trust which [the Trust's co-trustees] could do jointly by majority if present." According to Trustees, the power of attorney proved that the Trust had its principal place of administration at Vickey's residence in Indiana. Thus, Trustees argued that subject matter jurisdiction was not proper in Idaho under the provisions of the trust code.

Beneficiaries disputed that the district court could consider the power of attorney. However, if the district court chose to do so, Beneficiaries maintained that the court was obligated to convert Trustees’ motion to dismiss into a motion for summary judgment under Rule 12(d) of the Idaho Rules of Civil Procedure. If converted into a motion for summary judgment, Beneficiaries argued the motion failed because they disputed that the Trust's principal place of administration was in Indiana rather than Idaho, where Brian Sr. and Doris had administered the Trust during their lives. Beneficiaries also challenged the legal effect and validity of the power of attorney itself, but this issue has not been argued on appeal nor considered by this Court.

In April 2020, Beneficiaries filed their own motion for summary judgment as to most counts in their complaint.

The district court held a hearing in May 2020, at which the parties presented oral argument on Trustees’ motion to dismiss. The district court issued an order granting Trustees’ motion in June 2020. In its order, the district court considered the power of attorney, but it did not convert Trustees’ motion to dismiss into a motion for summary judgment and, therefore, did not draw all reasonable inferences in favor of Beneficiaries as the non-moving party. See Tech Landing, LLC v. JLH Ventures, LLC , 168 Idaho 482, 483 P.3d 1025, 1029 (2021) (articulating the standard of review applicable to a motion for summary judgment). Instead, it construed Trustees’ motion to dismiss and attachment of the power of attorney as a factual attack on subject matter jurisdiction. The district court held that in a factual challenge to subject matter jurisdiction, it was required to go beyond the pleadings and weigh evidence submitted by the parties without affording Beneficiaries a presumption in their favor. See Owsley v. Idaho Indus. Comm'n , 141 Idaho 129, 133, 106 P.3d 455, 459 (2005) (noting that challenges to subject matter jurisdiction may be facial or factual and articulating the appropriate standard of review for each). The district court also concluded that Beneficiaries bore the burden to establish a factual basis for subject matter jurisdiction. Applying this standard, the district court considered the power of attorney and various declarations submitted by the parties in connection with Trustees’ motion to dismiss and Beneficiaries’ motion for summary judgment. The district court determined that (1) the principal place of the Trust's administration was in Indiana; (2) Indiana could exercise personal jurisdiction over the parties; (3) and that the interests of justice would not be impaired by litigating in Indiana rather than Idaho. The district court then dismissed Beneficiaries’ complaint pursuant to section 15-7-203 of the trust code.

Beneficiaries moved for reconsideration and the district court held a hearing in August 2020. The district court denied the motion for reconsideration in October 2020. Beneficiaries timely appealed to this Court.

II. STANDARD OF REVIEW

The Court has free review over questions of law, including issues of jurisdiction and statutory interpretation. Tucker v. State , 162 Idaho 11, 17, 394 P.3d 54, 60 (2017) (citing In re Jerome Cnty. Bd. of Comm'rs , 153 Idaho 298, 308, 281 P.3d 1076, 1086 (2012) ); Kelly v. TRC Fabrication, LLC , 168 Idaho 788, 487 P.3d 723, 726 (2021) (citing Robison v. Bateman-Hall, Inc. , 139 Idaho 207, 209, 76 P.3d 951, 953 (2003) ).

III. ANALYSIS

The trust code governs the administration of trusts in Idaho, including provisions regarding jurisdiction and venue in actions between beneficiaries and trustees. Section 15-7-101 imposes a duty on the trustees of a trust administered in Idaho to register the trust "in the court of this state at the principal place of administration." The operation of several provisions in the trust code depends on whether a trustee has complied with this duty. See, e.g. , I.C. §§ 15-7-103, -104, -201, -202. Relevant here, when a trust has been registered, "[t]he court of registration has exclusive jurisdiction of proceedings initiated by interested parties concerning the internal affairs of trusts." I.C. § 15-7-201(a). However, when a trust has not been registered, a trustee is subject to the personal jurisdiction of, and venue is proper in, any court where the trust could have been registered. I.C. §§ 15-7-104, -202.

That said, even where proceedings are otherwise proper in an Idaho court, section 15-7-203 provides that a court should decline to hear cases in certain circumstances:

The court will not, over the objection of a party, entertain proceedings under section 15-7-201 of this Part involving a trust registered or having its principal place of administration in another state, unless (1) when all appropriate parties could not be bound by litigation in the courts of the state where the trust is registered or has its principal place of administration or (2) when the interests of justice otherwise would seriously be impaired. The court may condition a stay or dismissal of a proceeding under this section on the consent of any party to jurisdiction of the state in which the trust is registered or has its principal place of business, or the court may grant a continuance or enter any other appropriate order.

I.C. § 15-7-203. Stated differently, an Idaho court should dismiss a case involving the administration of a trust where four conditions are met: (1) a party objects to proceeding in Idaho; (2) the court finds either (a) the trust has been registered in another state or that (b) its principal place of administration is in another state; (3) the court finds that all appropriate parties...