Howell v. Bates as Trustee of Anne S. Florance Revocable Trust

350 Ga.App. 708

830 S.E.2d 250

HOWELL

v.BATES, AS TRUSTEE OF the ANNE S. FLORANCE REVOCABLE TRUST.

A19A0338

Court of Appeals of Georgia.

June 21, 2019

Daniel Francis Diffley, Atlanta, Kevin Trent Moore, for Appellant.

Andrew B. Flake, Jennifer Lynne Shelfer, Atlanta, for Appellee.

Reese, Judge.

In this declaratory judgment action, Emily Howell appeals from the grant of partial summary judgment to Phillip Bates, as Trustee of the "Anne S. Florance Revocable Trust." Howell contends that the superior court erred in ruling that the estate of her aunt, Anne S. Florance (the "decedent"), was not a necessary party to this action and that Howell’s challenge to the validity of the Trust was time-barred. Howell also asserts that the court erred in finding that she violated the "no contest" provision of the Trust and, thus, forfeited her right to a distribution under the Trust. For the reasons set forth, infra, we affirm.

Viewing the undisputed facts in favor of Howell, as the nonmovant,¹ the record shows that, in October 1997, the decedent, with the assistance of her estate-planning attorney, Suzanne Tucker Plybon, executed a "Last Will and Testament" and documents establishing a revocable, inter vivos trust entitled the "Anne S. Florance Revocable Trust." Over the next several years, with the assistance of Plybon, and the decedent’s personal attorney, Bates, the decedent amended and re-executed both documents about ten times to address changes in tax and estate laws, to provide for the residue of her estate to go to charitable organizations, to change beneficiaries, and/or to change the amounts to be distributed to certain beneficiaries. On February 20, 2013, the decedent executed a final amended will ("Will") and trust ("Trust").²

The Will contained a "pour-over" provision which bequeathed all of the decedent’s tangible and intangible assets to the Trust upon her death.³ The Will also named Bates as the executor of the decedent’s estate. The Trust provided that the decedent would serve as the trustee until her incapacity or death, at which time Bates would become the trustee.

In addition, both documents included "no contest" or "in terrorem"⁴ clauses that were essentially mirrors of one another. For example, the "no contest" clause in the Trust provided:

Should any person contest or initiate legal proceedings to contest the validity of this Trust or of the Grantor’s Will or of any provision herein or in the Grantor’s Will, or to prevent any provision in either document from being carried out in accordance with its terms (whether or not in good faith and with probable cause), then such person shall be deemed to have predeceased the Grantor, and all of the benefits provided for such person in this Trust and under the Grantor’s Will are revoked and annulled, and any property to which such person would have been entitled shall be distributed in equal shares among the [charities that will receive the residue of the Trust].⁵

The decedent died on May 14, 2013; at the time of her death, the decedent was a widow with no direct descendants. Bates, as executor of the decedent’s estate, promptly filed the Will in the Probate Court of Fulton County, but he did not take steps to probate the Will because the estate had no assets, as they had been automatically transferred to the Trust upon the decedent’s death.⁶

On July 25, 2013, Bates sent a letter to the decedent’s niece, Howell (the appellant in this case), informing her that the decedent had provided that $ 25,000 was to be distributed to her as a beneficiary of the Trust.⁷ Attached to the letter was a redacted copy of the page of the Trust that contained the distribution to Howell. Howell received the letter the next day.⁸

In January 2016, Howell filed a verified "Petition for Letters of Administration" in the probate court, claiming that the decedent died "intestate[,]" i.e., "without a valid Will and Testament[,]" and asking to be appointed as administrator of the decedent’s estate. In response, on February 12, 2016, Bates filed a "Petition to Probate [the decedent’s] Will in Solemn Form" in the probate court, as well as a motion to dismiss Howell’s petition. Howell then filed a caveat to Bates’s petition to probate the Will in the probate court on February 25, 2016, objecting to Bates’s appointment as executor of the estate and asserting that the Will was invalid because Bates had exerted "undue influence" over the decedent. In addition, Howell obtained two ex parte temporary restraining orders ("TROs") prohibiting Bates from distributing or disbursing any property, money, or assets of the Trust.⁹

On November 10, 2016, Bates filed a petition for declaratory judgment¹⁰ in the Superior Court of Fulton County, seeking rulings that the Trust was valid and in full force and effect; the transfers of the decedent’s real and personal property to the Trust were valid, binding, and free from undue influence; the statute of limitation period for challenging the validity of the Trust had expired; and Howell had violated the "no contest" clause of the Trust and, thus, had forfeited her right to a distribution under the Trust. In her answer to the petition, Howell asserted, inter alia, that the Trust was invalid. Bates moved for partial summary judgment,¹¹ and, following a hearing, the superior court granted the motion. This appeal followed.

In order to prevail on a motion for summary judgment under OCGA § 9-11-56, the moving party must show that there exists no genuine issue of material fact, and that the undisputed facts, viewed in the light most favorable to the nonmoving party, demand judgment as a matter of law. Moreover, on appeal from the denial or grant of summary judgment[,] the appellate court is to conduct a de novo review of the evidence to determine whether there exists a genuine issue of material fact, and whether the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law.¹²

With these guiding principles in mind, we turn now to Howell’s specific claims of error.

1. Howell contends that the estate may have claims against the Trust, or against Bates as the trustee, that would be impacted by the instant litigation, so the superior court erred in ruling that the estate was not a necessary party to this action. She also argues that, because the probate court has not yet ruled on her caveat to the Will or appointed someone as administrator of the estate, there was no one to represent the estate’s interests in this case, so any ruling by the superior court in this case was premature.

OCGA § 9-11-19 (a) provides:

A person who is subject to service of process shall be joined as a party in the action if:

(1) In his absence complete relief cannot be afforded among those who are already parties; or

(2) He claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may:

(A) As a practical matter impair or impede his ability to protect that interest; or (B) Leave any of the persons who are already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest.

In arguing that the estate was a necessary party to this suit, Howell contends that the estate might have claims challenging the validity of the Trust that are based on allegations that Bates had unduly influenced the decedent prior to the execution of the final Will and Trust in 2013.¹³ As the superior court ruled, however, Howell failed to identify any claims that the estate might have against the Trust that would be prejudiced by the court’s rulings on the instant declaratory judgment petition, nor did Howell show any reason why the court was unable to afford complete relief to the parties in this case in the estate’s absence.¹⁴

Moreover, pretermitting whether the estate would have been able to assert claims against the Trust in this action,¹⁵ the superior court’s order limits the court’s rulings solely to the parties in the instant case and explicitly states that the order "is not intended to bind, and does not bind, any non-party (e.g., the Estate) to this litigation or affect any otherwise valid claims any non-party may hold."

Under these circumstances, we hold that Howell has failed to demonstrate any reversible error.

2. Howell contends that the superior court erred in ruling that OCGA § 53-12-45 (a) was a statute of repose and that, as a result, she was time-barred from challenging the validity of the Trust. She also argues that the court erred in ruling that, even if the statute was a statute of limitation, she had failed to demonstrate any fraud by Bates that would have tolled the running of the limitation period. We disagree.

Statutes should be read according to the natural and most obvious import of the language, without resorting to subtle and forced constructions, for the purpose of either limiting or extending their operation. In reviewing a statute, we presume that the legislature enacts all statutes with knowledge of the existing laws. Moreover, in specifically reviewing a statute to determine whether it was intended as a statute of repose, we consider that the distinction between the statute of limitation and the statute of repose is clear. A statute of limitation is a procedural rule limiting the time in which a party may bring an action for a right which has already accrued. A statute of ultimate repose delineates a time period in which a right may accrue. If the injury occurs outside that period, it is not actionable. Furthermore, a statute of repose is also distinct from a statute of limitation in that a statute of repose stands as an unyielding barrier to a plaintiff’s right of action. The statute of repose is absolute; the bar of the statute of limitation is contingent. The statute of repose destroys the previously existing rights so that, on the expiration of the statutory period, the cause of action no longer

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