Justia Trusts & Estates Opinion Summaries

Sharon Born, the cousin of John Born, held two installment promissory notes upon which the inter vivos revocable trust created by John (“the Born Trust”) assets had been pledged as security when John died. When Betty Born, John’s wife, attempted to make payments on the notes, Sharon asserted that the notes were in default because of John’s death, that the entire remaining balances were immediately due and payable under the notes’ acceleration clauses, and that Sharon’s only remedy under the security agreements was to accept all of the Born Trust’s pledged assets in full satisfaction of the note balances. Betty, in her capacity as a Born Trust trustee, brought this injunction and declaratory judgment action against Sharon, challenging Sharon’s right unilaterally to effect an acceptance-of-collateral remedy. The district court granted summary judgment for Sharon and ordered the Born Trust to turn over the collateral to Sharon. The court of appeals affirmed. The Supreme Court reversed, holding that the Born Trust had the right under the promissory notes to pay the accelerated balances due thereon to prevent Sharon’s acceptance of the pledged assets under the security agreement. Remanded. View "Born v. Born" on Justia Law

Rick and Lisa Graham filed a petition for a protection from stalking order against Elizabeth Jones in 2006. Jones counterclaimed for breach of fiduciary duty, breach of contract, fraud, and conversion. On June 27, 2007, while her counterclaims against the Grahams were pending, Jones died. On April 17, 2008, the Grahams filed a motion to dismiss the lawsuit. Angela Herring, who was appointed as administratrix of Jones's estate, filed a motion to substitute the estate as the claimant against the Grahams. The district court dismissed the action based upon its determination that substitution was untimely under Kan. Stat. Ann. 60-225(a)(1). The court of appeals reversed. The Supreme Court affirmed and provided an analysis to determine whether a substitution motion was filed within a reasonable time, holding (1) the relevant time period for determining the reasonableness of a delay in substituting a party begins with the statement noting the death and ends with the filing of the motion for substitution; and (2) the standard for determining whether a substitution motion has been made within a reasonable time is to consider the totality of the circumstances, which can include the fact of whether another party would be prejudiced by the substitution. Remanded. View "Graham v. Herring" on Justia Law

John filed suit against his mother, Bernice, both individually and in her capacity as trustee for two trusts. Bernice subsequently died, and John's brother and sister, Richard and Diana, were substituted as defendants. John made three claims - breach of contract, breach of trust, and constructive fraud. John's claims arose after Bernice executed a trust in 2004 and a new will with the express intent to disinherit John. John claimed that Bernice's actions constituted a breach of her joint and contractual will made in 1989 with John's father, Frank. The district court granted summary judgment to Defendants. The court of appeals affirmed and remanded, concluding that an irrevocable 1996 trust created by Frank and Bernice implicitly revoked or modified the 1989 will. The Supreme Court affirmed in part and reversed in part, holding (1) the 1996 trust did not fully revoke the 1989 will; (2) because in 2004 Bernice was still bound by any contractual provisions in the 1989 will that survived the creation of the irrevocable 1996 trust, John could prove a breach of contract to the extent the 2004 will and trust violated the 1989 will's surviving provisions; and (3) summary judgment was not appropriate on any of John's claims. Remanded. View "Boucek v. Boucek" on Justia Law

This appeal arose over the administration of a Trust between Lawrence, the Trust's beneficiary, and the Trust's trustees, Dennis and Leona (collectively, Trustees). Lawrence moved to set aside a contract for deed executed between Dennis and his wife and the Trustees for the sale of farmland owned by the Trust and also sought to remove the Trustees, alleging they engaged in self-dealing and breached their fiduciary duties. The district court concluded (1) the Trust permitted the Trustees to finance the sale of the farmland to Dennis under the terms set forth in the contract for deed; and (2) Lawrence violated the Trust's no-contest clause by challenging the Trustee's sale of the farmland to Dennis, which required Lawrence's disinheritance. The Supreme Court reversed the district court's ruling regarding the Trustees' authority to finance the sale of the farm and its enforcement of the no-contest clause against Lawrence, holding (1) the Trustees' execution of the contract for deed violated the terms of the Trust; and (2) Lawrence had probable cause to challenge the Trustees' sale of the farm to Dennis. Remanded. View "Hamel v. Hamel" on Justia Law

Decedent created an inter vivos revocable trust. Until her death, Decedent served as the trust's sole trustee. At Decedent's request, Attorney drafted the trust documents and a pour-over will. Bank was named successor trustee of Decedent's trust. After Decedent died, the personal representative (Representative) of Decedent's estate sued Attorney and Bank. Against Attorney, the petition alleged claims of negligence and breaches of fiduciary duty and contract based on the alleged failure of Defendants to protect Decedent's assets from tax liability. The district court granted Defendants' motions of summary judgment. Specifically, the court held that Representative's tort claims for legal malpractice did not survive Decedent's death. The court of appeals affirmed the grant of summary judgment for Attorney. The Supreme Court affirmed, holding that because Representative's cause of action did not accrue until after Decedent's death, it did not qualify as a survival action under Kan. Stat. Ann. 60-1801 and was therefore barred. View "Jeanes v. Bank of Am., N.A." on Justia Law

Defendant owned a first-priority security interest in LLC. The Cass Trust owned LLC membership interest, and the Cass Trust and Cohen Trust owned common stock shares in Corporation. The Cohen and Cass trustees later made an agreement with Company to sell the membership interests in LLC, including Defendant's first priority security interest in LLC, and Corporation's assets. A dispute arose over whether Defendant was entitled to know details of the sale agreements. Before the sale agreements were to close, Defendant sued the trusts, LLC, and Corporation in Missouri, alleging that the trustees engaged in self-dealing and financially manipulated Corporation and LLC to dilute Defendant's ownership interest. After learning of the lawsuit, Company refused to close the transaction without additional substantive requirements. After closing, the Cohen and Cass trustees filed this lawsuit against Defendant, alleging that Defendant tortiously interfered with their existing contracts and prospective business relationships by filing the lawsuit then faxing to Company a suit copy. The trial court dismissed the claims. The court of appeals affirmed, finding that Defendant could not interfere with a contractual relation by giving Company "truthful information." The Supreme Court reversed because at the time the instant suit was filed, the court of appeals was not in a position to decide the truth of the claims set out in the Missouri action. View "Cohen v. Battaglia" on Justia Law

Plaintiff was the only child of Susan Shore. Susan and her children were beneficiaries of the Shore Family Trust. After Susan died, Plaintiff sued Defendant, the trustee of the trust, alleging (1) Defendant sold the farmland that formed the principal of the of the trust and distributed the proceeds to himself for his personal use, and (2) Plaintiff was unaware of Defendant's actions until within two years before filing suit. Plaintiff's complaint claimed breach of trust, breach of fiduciary duty, conversion, and constructive fraud. The district court dismissed the action, finding that the applicable statues of limitations and repose barred all of Plaintiff's claims. The court of appeals affirmed. The Supreme Court affirmed in part and reversed in part, holding that three of four of Plaintiff's causes of action were time barred, but his claim based on constructive fraud survived. Remanded. View "Hemphill v. Shore" on Justia Law