In re Temple Marital Trust

748 N.W.2d 265

278 Mich.App. 122

In re Clarence W. TEMPLE and Florence A. Temple MARITAL TRUST Wallace Temple, Petitioner-Appellant, v. Clinton Probate Court Ralph Temple and Dean Temple, Respondents-Appellees.

Docket No. 273911.

Court of Appeals of Michigan.

Submitted February 5, 2008, at Lansing.

Decided February 28, 2008, at 9:00 a.m.

Silverman, Smith & Rice, P.C. (by Ruth A. Gregg and Stephen M. Rice), Kalamazoo, for Wallace Temple.

Dean Temple and Ralph Temple in propriis personis.

Before: MARKEY, P.J., and METER and MURRAY, JJ.

PER CURIAM.

Petitioner Wallace Temple appeals by right the order of the probate court denying his request for attorney fees, granting the request of respondents Ralph and Dean Temple for attorney fees, denying petitioner's request for partition, and ordering the sale of the main asset of the Clarence W. and Florence A. Temple Marital Trust, the family farm. We affirm.

I. Factual Background

In an earlier appeal, this Court held that Clarence Temple's attempt after Florence Temple's death to amend the terms of the trust regarding distribution, and to nominate Ralph rather than Dean as the successor trustee on his death, violated the express terms of the original trust agreement. In re Temple Marital Trust, unpublished opinion per curiam of the Court of Appeals, issued August 9, 2005 (Docket No. 261000), 2005 WL 1880375. We set forth additional background for this appeal from that decision:

Petitioner and respondents are brothers and beneficiaries of a trust created by their parents, Clarence and Florence Temple ("the settlors"). The trust, as originally created in 1998, stated that two parcels of property that comprised the settlors' farm would be divided and distributed equally to petitioner, respondents, and a fourth brother (since deceased) after the settlors' deaths.

* * *

After Florence Temple died, Clarence Temple executed an amendment to the trust that distributed one parcel of the farm to respondent Dean Temple and the other to respondent Ralph Temple. Respondents testified that they verbally assured Clarence that Ralph would divide his property with petitioner and that the trust amendment would enable petitioner to gain his share of the land without having to deal with respondent Dean Temple, with whom he had a longstanding feud. When Clarence died, Ralph attempted to work out a division of the property with petitioner, but they failed to reach an agreement.

Petitioner petitioned the probate court to construe the trust as not allowing Clarence to amend it after Florence's death.... The probate court found that the settlors intended for the surviving settlor to retain the power to amend, and the court thus construed the trust as allowing Clarence's amendment. [Id. at 1-2.]

This Court held that the trust language only provided for the trust to be amended by both settlors; consequently, Clarence was precluded from amending the trust after Florence died. The Court remanded the case to the probate court for further proceedings. Id. at 5.

After remand, petitioner filed a motion for attorney fees. Respondents countered with a motion for partition and authorization for sale. After mediation failed, respondents moved for approval of a final settlement of claims, permission to sell the trust property, and attorney fees to be paid by the trust.

The trial court held an evidentiary hearing, limiting the testimony to issues involving the distribution of trust assets and attorney fees. The parties stipulated an appraisal valuing the farm at $415,000. Each side argued that it was entitled to attorney fees but the other side was not. The evidence established that respondents had incurred $29,109.38 and petitioner had incurred $118,312.45 in attorney fees and $2,500 for the appraisal.

As for the distribution of the trust property, respondents argued that while they wanted to keep the farm in the family pursuant to the terms of the trust, they did not think it was possible, so they asked the trial court to allow it to be sold with each beneficiary receiving 25 percent of the net profits. Dean testified that it would be difficult to partition the farm into four equal shares given the difference in value between tillable and untillable land. Ralph was unwilling to accept any ruling of the trial court that would give petitioner anything more than 25 percent.

Petitioner testified that he wanted the land partitioned. He requested that the trial court award him as much of the property west of the river as was necessary to give him property valued at $194,359.33. He acknowledged that this was more than 25 percent of the trust assets but asserted he was entitled to it on the basis of his attorney fees. Ignoring attorney fees, petitioner indicated that the property should be divided four ways, but he did not provide any proposal for how to accomplish a four-way division. Petitioner conceded that the appraisal was not necessarily the amount that could be realized from selling the property.

The trial court issued an opinion ruling that respondents were entitled to attorney fees for defending an action as fiduciaries of the estate and that those fees were properly chargeable to the estate because Ralph was successor trustee under the amendment and Dean was successor trustee under the original trust. The court also reasoned that claims of wrongdoing against respondents were dismissed and not appealed. Petitioner's request for attorney fees was denied because his actions did not benefit the estate. Petitioner also failed to prove that his attorney fees were reasonable. The trial court denied the petitioner's request for partition and ordered that the property be sold with the proceeds divided equally after payment of certain itemized expenses, reasoning as follows:

Although Petitioner requested partition, neither he nor any of the other Trust beneficiaries put forth any proposal which divided the Real Estate into four (4) equal parcels. Instead, Petitioner proposed that he receive a parcel with a value equal to 46.8% of the entire Real Estate,⁴ and that the proposed parcel include 50% of the total river frontage, along with significant tillable acreage. Petitioner testified that he proposed this specific parcel for partition for its monetary value. Respondents both indicated that, if it were possible, they would like to see the Real Estate stay in the Temple Family. However, they oppose the partition of the property because they could not craft a "share and share alike" division which would satisfy all the beneficiaries. Moreover, the Trust has no other liquid assets, and there are claims pending against the Trust for attorney fees and costs incurred as a result of this litigation.

The parties agree that the Real Estate contains 140.65 net acres. It contains river frontage and both tillable and untillable land. While crop farming may be its highest and best use now, the appraisal acknowledged the potential for future residential development as well as the possibility for sand and gravel mining. Further, there is no agreement among the beneficiaries (and no evidence was offered) as to how the property could be acceptably divided in a "share and share alike" division. The only agreement among the parties is that the Real Estate is worth approximately $415,000.00.

Therefore, it is the decision of this Court that the property shall be listed and sold by a licensed realtor, selected by this Court, and that the proceeds from the sale shall be divided as provided in the opinion below.

⁴ This value assumes an offset for his attorney fees, in the amount of $120,812.45, and then 25% of the net remaining value of the Real Estate.

II. Standard of Review

The Estates and Protected Individuals Code (EPIC), MCL 700.1101 et seq., governs this case because, although the trust was created in 1998, these proceedings were commenced after EPIC's effective date of April 1, 2000, and no accrued rights will be impaired by its application. MCL 700.8101; In re Duane v. Baldwin Trust, 274 Mich.App. 387, 391 n. 2, 733 N.W.2d 419 (2007), mod. 480 Mich. 915, 739 N.W.2d 868 (2007). Issues of statutory construction present questions of law that this Court reviews de novo. Id. at 396, 733 N.W.2d 419. But appeals from a probate court decision are on the record, not de novo. See MCL 700.1305; MCL 600.866(1); MCR 5.802(B)(1); In re Webb H. Coe Marital and Residuary Trusts, 233 Mich.App. 525, 531, 593 N.W.2d 190 (1999). The trial court's factual findings are reviewed for clear error, while the court's dispositional rulings are reviewed for an abuse of discretion. In re Coe Trusts, supra; In re Baldwin Trust, supra at 396-397, 733 N.W.2d 419. The trial court abuses its discretion when it chooses an outcome outside the range of reasonable and principled outcomes. In re Baldwin Trust, supra at 397, 733 N.W.2d 419, citing Maldonado v. Ford Motor Co., 476 Mich. 372, 388, 719 N.W.2d 809 (2006).

Likewise, with respect to an award of attorney fees, we review underlying findings of fact for clear error, Solution Source, Inc. v. LPR Assoc. Ltd. Partnership, 252 Mich.App. 368, 381-382, 652 N.W.2d 474 (2002), while questions of law are reviewed de novo, Hines v. Volkswagen of America, Inc., 265 Mich.App. 432, 438, 695 N.W.2d 84 (2005). But we review the court's decision whether to award attorney fees and the determination of the reasonableness of the fees for an abuse of discretion. Windemere Commons I Ass'n v. O'Brien, 269 Mich.App. 681, 682, 713 N.W.2d 814 (2006). The court does not abuse its discretion when its decision is within the range of reasonable and principled outcomes. Patrick v. Shaw, 275 Mich.App. 201, 204, 739 N.W.2d 365 (2007), mod. 480 Mich. 1050, 743 N.W.2d 897 (2008).

III. Analysis

A. Respondents' Attorney Fees

Petitioner argues that respondents were not entitled to attorney fees because their positions in the litigation advocated their personal interests rather than any fiduciary interest and respondents...