Riskey v. Riskey

917 N.W.2d 488

Rodney G. RISKEY, individually and as Co-trustee of the Annette Riskey Family Irrevocable Trust dated April 12, 2004, Plaintiff and Appellee

v.Jeffrey T. RISKEY, in his capacity as Co-trustee of the Annette Riskey Family Irrevocable Trust dated April 12, 2004, Defendant and Appellant

Joseph Riskey, Robert E. Riskey, Randy G. Riskey, John G. Riskey, and Jeff T. Riskey, individually and as Co-trustee of the Annette Riskey Family Irrevocable Trust dated April 12, 2004, Plaintiffs and Appellants

v.Rodney G. Riskey, individually and as Co-trustee of the Annette Riskey Family Irrevocable Trust dated April 12, 2004, Defendant and Appellee

No. 20170392

No. 20170393

Supreme Court of North Dakota.

Filed September 20, 2018

Lawrence D. DuBois, Cavalier, ND, for plaintiff and appellee.

Theodore T. Sandberg (argued) and Laura D. Cobb (on brief), Grand Forks, ND, for defendant and appellant.

VandeWalle, Chief Justice.

[¶ 1] Jeffrey Riskey, individually and as co-trustee of the Annette Riskey Family Irrevocable Trust dated April 12, 2004 ("Trust"), and other Riskey family members (collectively, "the Riskeys") appealed from judgments entered after the district court granted his brother and co-trustee Rodney Riskey’s summary judgment motion. We conclude that the facts, when viewed in a light most favorable to the Riskeys, do not support a conclusion that the Trust’s purchase option provision was the effect of Rodney Riskey’s undue influence on their mother, Annette Riskey. We affirm.

I

[¶ 2] In granting Rodney Riskey’s summary judgment motion, the district court provided the following undisputed facts:

Annette Riskey’s husband, Gilbert Riskey, died in December 2003. Within months of the death, Rodney Riskey brought Annette Riskey to attorney David Peterson. A new trust was drafted which allowed Rodney Riskey to purchase land, bins and a house owned by Annette Riskey [after her death] for the sum of $65,000. The trust was signed by Annette Riskey [as settlor] and Rodney Riskey [as co-trustee] on April 12th, 2004. Jeffrey Riskey was appointed [c]o-trustee but was only sent a signature page, which he signed shortly thereafter. Jeffrey Riskey did not know of the purchase option until 2015. All parties agree the land, bins and house are worth more than $65,000, though no appraisal has been admitted into the record. Annette Riskey died in November 2015. Rodney Riskey executed a purchase agreement, which Jeffrey Riskey, [c]o-trustee, would not sign.

In 2004 Annette Riskey had also executed a warranty deed transferring the property to the co-trustees, Rodney Riskey and Jeffrey Riskey, and reserving a life estate.

[¶ 3] In February 2016, Rodney Riskey filed this action seeking an order to compel Jeffrey Riskey, as co-trustee, to execute the purchase option required under the 2004 Trust’s provision allowing Rodney Riskey to purchase farmland and homestead area for $65,000. This provision states, in relevant part: "The Co-Trustees shall give an option unto my son, Rodney G. Riskey, to purchase the NE1/4-6-155-51, including any buildings thereon, and the SE1/4-6-155-51 for the sum of $65,000, said option exercisable and payable in full within 6 months of [Annette Riskey’s] death." Jeffrey Riskey answered the complaint in his capacity as co-trustee, responding that Rodney Riskey had improperly, illegally, and unduly influenced Annette Riskey during the formation of the Trust, which caused the creation of Trust provisions that were not Annette Riskey’s personal desires and intentions.

[¶ 4] In March 2016, brothers Jeffrey Riskey, Randy Riskey and John Riskey, and family members representing deceased brothers Joseph Riskey and Robert Riskey, commenced a separate action seeking to reform the Trust. The Riskeys claimed the trust provision containing the purchase option was invalid, also alleging their brother Rodney Riskey had exerted undue influence over their mother, Annette Riskey, in creating the Trust with the purchase option. In June 2016, the parties stipulated to joining the two cases for discovery and trial.

[¶ 5] In August 2017, Rodney Riskey moved for summary judgment in both of the cases, and the Riskeys opposed the motion. After a September 2017 hearing, the district court granted summary judgment in favor of Rodney Riskey, holding the Riskeys had failed to present sufficient evidence to overcome summary judgment on their undue influence claim.

II

[¶ 6] Our standard for reviewing a district court’s grant of summary judgment is well established:

[Summary judgment] is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. A party moving for summary judgment has the burden of showing there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. In determining whether summary judgment was appropriately granted, we must view the evidence in the light most favorable to the party opposing the motion, and that party will be given the benefit of all favorable inferences which can reasonably be drawn from the record. On appeal, this Court decides whether the information available to the district court precluded the existence of a genuine issue of material fact and entitled the moving party to judgment as a matter of law. Whether the district court properly granted summary judgment is a question of law which we review de novo on the entire record.

Maragos v. Newfield Prod. Co. , 2017 ND 191, ¶ 7, 900 N.W.2d 44 (quoting Krenz v. XTO Energy, Inc. , 2017 ND 19, ¶ 17, 890 N.W.2d 222 ).

[¶ 7] "Summary judgment is inappropriate if neither party is entitled to judgment as a matter of law or if reasonable differences of opinion exist as to the inferences to be drawn from the undisputed facts." Northern Oil & Gas, Inc. v. Creighton , 2013 ND 73, ¶ 11, 830 N.W.2d 556 (citation omitted). "Deciding an issue on summary judgment is not appropriate if the court must draw inferences or make findings on disputed facts." Id. at ¶ 20. When ruling on a summary judgment motion, the court may not weigh the evidence, determine credibility, or decide the truth of the matter. Farmers Union Oil Co. v. Smetana , 2009 ND 74, ¶ 10, 764 N.W.2d 665.

[¶ 8] Whether undue influence occurred generally presents a question of fact. Erickson v. Olsen , 2014 ND 66, ¶ 19, 844 N.W.2d 585. This Court has said "[a]ctions involving state of mind are among those kinds of cases which are not usually suited for disposition by summary judgment." Boone v. Estate of Nelson , 264 N.W.2d 881, 887 (N.D. 1978) (emphasis in original). However, claims of undue influence "can be properly disposed of by summary judgment when [the parties claiming undue influence] have failed to support their opposition to the summary judgment motion with sufficient facts showing that there is a genuine issue for trial." Id.

[¶ 9] "When a motion for summary judgment is made and supported as provided in [ N.D.R.Civ.P. 56 ], an adverse party may not rest upon the mere allegations or denials of his pleadings, but his response, by affidavit or as otherwise provided in the rule, must set forth specific facts showing that there is a genuine issue for trial." Boone , 264 N.W.2d at 887. For an undue influence claim ultimately to be "submitted to a jury, the evidence must be sufficient with regard to each essential element of the claim and the evidence must also create more than just a mere suspicion of undue activity." In re Estate of Stave , 2007 ND 53, ¶ 13, 729 N.W.2d 706 (quoting In re Estate of Dion , 2001 ND 53, ¶ 34, 623 N.W.2d 720 ) (emphasis added).

III

[¶ 10] The Riskeys argue the district court erred in granting Rodney Riskey summary judgment because genuine issues of material fact exist for trial. They contend: 1) the district court erred in deciding Rodney Riskey did not have a disposition to exercise undue influence over Annette Riskey, and 2) the court erred in deciding the Trust’s purchase option provision did not appear to be the result of undue influence exerted by Rodney Riskey over Annette Riskey.

[¶ 11] Chapter 59-12, N.D.C.C., includes provisions for the creation, validity, modification and termination of a trust, requiring the party creating a trust to have capacity. N.D.C.C. § 59-12-02(1) [ Uniform Trust Code ("U.T.C.") § 402 ]. Under N.D.C.C. § 59-12-06 ( U.T.C. § 406 ), "[a] trust is void or subject to reformation by the court to the extent its creation was induced by fraud, duress, or undue influence." As one treatise has explained:

The general rules regarding the effect of invalidating causes apply to conveyances and contracts connected with the creation of a trust. Thus, a trust may be invalidated on the grounds of fraud, undue influence, duress, mistake, and other types of unconscionable or illegal conduct.

Although historically, a "no-reformation rule" that applied to wills often also was applied to inter vivos trusts, the modern trend to conform to the settlor’s intention provided that clear and convincing evidence exists to establish the mistake and the donor’s intention.

Amy Morris Hess, George Gleason Bogert, and George Taylor Bogert, The Law of Trusts and Trustees § 44 (3rd ed. 2007) (citations omitted); see also 90 C.J.S. Trusts § 80 (2010) ("When a declaration of trust is procured by undue influence, it is invalid and unenforceable, but the influence exerted must be undue and operative to such a degree as to amount in effect to coercion."); Restatement (Third) of Trusts § 12 (2003) ("A transfer in trust or declaration of trust can be set aside, or the terms of a trust can be reformed, upon the same grounds as those upon which a transfer of property not in trust can be set aside or reformed.").

[¶ 12] Section 9-03-11, N.D.C.C., provides that "[u]ndue influence consists:"

1. In the use, by one in whom a confidence is reposed by another or

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