Justia Trusts & Estates Opinion Summaries

This case concerned a dispute over ownership of Jacques Lipchitz's, the Russian-born cubist sculptor, bronze sculpture, "The Cry." Jacques' wife, Yulla, inherited the work of art after he died. Yulla subsequently entered into a relationship with Biond Fury and, from time to time, would make gifts to Fury of Jacques' works. Yulla's son, Mott, was the executor and a residuary beneficiary of one third of her estate. In July 2004, Mott claimed to have sold "The Cry" and three other sculptures in a package deal to Marlborough International Fine Art Establishment. On September 15, 2005, Fury sold his interest in "The Cry" to David Mirvish. The Surrogate's Court issued an order and subsequent to a settlement agreement, Mott argued in his motion that Mirvish's claim was untimely and he could not prove all elements of a gift. Mirvish countered Mott's motion and contended, inter alia, in his cross motion, that Yulla made a valid gift of the work to Fury. The court reversed the order of the Appellate Division and reinstated the Surrogate's Court's order granting Mirvish's cross motion and denying Mott's motion for summary judgment. The surrogate concluded that Yulla had made a valid inter vivos gift of the work to Fury, observing that the wording of the deed of gift was "in the past tense, i.e., 'I gave this sculpture "The Cry" to my good friend Biond Fury,'" which was not only "indicative of a past transfer," but also "clearly identifie[d] the intended object and [was] consistent with [Yulla's] long pattern of making gifts of similar items to her companion." View "Mirvish v Mott" on Justia Law

In this federal estate tax refund action, the Marshal Naify Revocable Trust appealed the district court's decision granting the Government's motion for judgment on the pleadings pursuant to Rule 12(c). After Naify's death, the Estate deducted $62 million on its federal estate tax return for the estimated amount of California income that it might owe on the $660 million gain if Naify's California tax avoidance plan failed. The court affirmed the judgment and agreed with the district court that the settlement amount was dispositive because it "determine[d] as a factual matter how much the claim against the estate [was] worth and [was] the only moment at which the value of the claim [became] 'certain.'" View "Naify Revocable Trust, et al. v. United States" on Justia Law

Decedent died, leaving a house. A developer who claimed to have purchased the property from Decedent's daughter filed a petition for probate without administration of an alleged will of Decedent. Decedent's neighbors filed a petition to revoke the probate of the will, alleging that the will was invalid and that the probate court improperly admitted the will to probate. Decedent's son filed a motion to intervene and join as a petitioner seeking to revoke the probate. The probate court (1) concluded that it did not have jurisdiction to hear the neighbors' petition to revoke because they lacked standing; (2) granted the developer's motion to dismiss the petition to revoke the will; and (3) found that because the son, who did have standing, did not file his own motion challenging the will, the court's jurisdiction was not properly invoked. The Supreme Court reversed, holding (1) the son's pleading, in essence, was a petition to revoke, and it should have been treated as such; (2) the district court should have allowed intervention under the circumstances presented here; and (3) substitution of the son as the real party in interest should have been allowed in this case. Remanded. View "Russell v. Kellersman" on Justia Law

Debtor appealed the district court's decision affirming the bankruptcy court's determination that an Illinois judgment debt owed to the Bank was not dischargeable, pursuant to 11 U.S.C. 523(a)(4). The court held that the bankruptcy court's order must be affirmed under section 523(a)(4) as a debt arising from a defalcation while debtor was acting in a fiduciary capacity. The court also held that the district court correctly determined that the propriety of the Bank's actions was not a basis for finding that the Illinois judgment debt should be discharged. Instead, the court agreed with the district court that the issue was not properly before the court, but rather should be brought by debtor in an action in Illinois to consider the malfeasance of the trustee. Accordingly, the court affirmed the judgment of the bankruptcy court. View "Bullock v. BankChampaign NA" on Justia Law

Petitioner Amanda Vinton, Esq. sought relief from orders of the probate court that permitted Respondent Sharon Virzi to amend her challenge to a trust administration by adding a claim of fraud against Vinton, the attorney for the trustee. Over Petitioner's objection, the probate court summarily granted Respondent's motion to amend, forcing Petitioner to withdraw as counsel for the trustee. The probate court subsequently summarily denied two motions by Petitioner to dismiss the claim against her and ordered her to pay Respondent's attorney fees for having to defend against a substantially frivolous and groundless motion. The Supreme Court issued a rule to show cause. Because Respondent's fraud claim was not plead with sufficient particularity to withstand a motion to dismiss, it was futile, and the probate court abused its discretion in permitting the joinder of her opponent's attorney. The Supreme Court found that whether or not Petitioner's motion to dismiss for lack of subject matter jurisdiction over the separate fraud claim was meritorious, the record was inadequate to support an award of attorney fees. The rule was therefore made absolute, and the matter was remanded to the probate court with directions to dismiss Respondent's claim of fraud against Petitioner and to vacate its award of attorney fees. View "Vinton v. Virzi" on Justia Law

Margery Kniffen, as Trustee for the Margery T. Kniffen Family Trust and Darrell Kniffen II, purchased an undeveloped tract in Fairbanks North Star Borough, planning to develop a subdivision. They also purchased a lot in Gold Country Estates, an existing subdivision adjacent to the undeveloped tract. The Kniffens sought a variance allowing them to construct a road across their Gold Country Estates lot to provide access to the planned subdivision. After hearing public testimony, the local Platting Board unanimously voted to deny the variance based on safety concerns. But after a subsequent site visit, the Board reconsidered the variance request and approved it. Gold Country Estates homeowners appealed to the Planning Commission, which upheld the Platting Board’s decision. The homeowners filed suit in superior court, arguing that the Platting Board denied them due process and violated the Open Meetings Act and that the proposed road violated Gold Country Estates’ covenants. The superior court ruled that Gold Country Estates’ covenants did not allow a Gold Country lot to be used as access for the new subdivision. Though the Kniffens’ access proposal was defeated, Gold Country continued to pursue its due process and Open Meetings Act claims against the Borough. The superior court ultimately ruled in favor of the Borough on those claims. The homeowners appealed to the Supreme Court, arguing that the superior court erred by not finding that the Platting Board denied them due process and violated the Open Meetings Act. Upon review, the Supreme Court affirmed the superior court’s grant of summary judgment in favor of the Borough on the homeowners' Open Meetings Act and due process claims, as well as the superior court's order declining to award attorney’s fees. View "Gold Country Estates Preservation Group, Inc. v. Fairbanks North Star Borough" on Justia Law

This was the fourth appeal in connection with the estate of Walter Brownlee, Sr. After Brownlee died and his will was probated, a dispute arose between Jeanie Weekley, Brownlee's longtime companion, and Brownlee's children regarding certain aspects of the will and the trust Brownlee had created. Weekley sued, and later, following Brownlee II, Weekley brought suit against Robert Wagner, Brownlee's personal representative, for breach of his fiduciary duties in administering the estate. The circuit court found that Wagner's failure to inspect, collect and manage certain construction equipment was breach of his fiduciary duty. On remand, the court awarded Weekley damages against Wagner for a total judgment amount of $139,834. The Supreme Court affirmed, holding that the circuit court's damages award was not clearly erroneous. View "Weekley v. Wagner" on Justia Law

The central issue on appeal to the Supreme Court in this case arose from a purported agreement to bifurcate the allowance of a will from the future allowance of a codicil. Farwell W. Perry died leaving behind a wife and four adult children (three sons and a daughter). The probate court set a hearing to consider the allowance of the will. Shortly before the hearing, the decedent's sons filed a motion to continue the hearing to allow the interested persons to determine whether they wished to consent to the allowance of both the will and a newly discovered two-page letter from decedent to his children purporting to be a codicil to his will. The codicil involved a single, discrete piece of the estate: a trust which previously had been established with daughter as sole beneficiary would now include all four children as equal beneficiaries. The probate court granted a continuance and rescheduled the hearing. The decedent’s daughter moved to dismiss the petition as untimely. The probate court denied the motion to dismiss, and the daughter appealed to the superior court. A letter from sons' attorney to the register of the probate court representing that "[t]he several parties have reached an agreement to allow the Last Will and Testament of [decedent]," and that they "have agreed to hold in abeyance the need to hold a hearing on the allowance of the purported Codicil to the will" appeared clear on its face. However, the order issued by the probate court allowing the will made no mention of any bifurcation of the allowance of the will from consideration of the purported codicil. While the parties all knew about the codicil at that time, and the order purported to allow any codicils, only the will itself was admitted. The court order did not grant an exception to the principle that wills and their codicils are considered one instrument. The Supreme Court found the superior court's decision to be made in error: "the law is therefore clear: an order allowing a will normally includes any known codicils, and any later effort to allow a codicil is an impermissible collateral attack on a final order." The Court held that the codicil could not be admitted, reversed the superior court's decision and denied the sons' petition to allow the codicil. View "In re Estate of Perry" on Justia Law

Lila Clavin (Lila) and Robert Gilbert founded Pastimes and executed an operating agreement (Agreement) that provided that Pastimes would terminate upon the death of a member unless at least two members remained who agreed to continue the business. After Lila died in 2000, Gilbert and Tim Clavin, Lila's son, could not agree on the value of Lila's share of Pastimes at the time of her death. This disagreement led Tim and Gilbert to conclude that Gilbert should continue to operate Pastimes. Gilbert filed a complaint for declaratory relief on behalf of Pastimes in 2005, requesting a date-of-death valuation for Lila's interest in 2005. The district court valued the Estate's interest at the date of trial rather than at the time of Lila's death. The Supreme Court affirmed in relevant part, holding that the district court properly valued the Estate's interest at the date of trial rather than at the time of Lila's death because Gilbert's and Tim's agreement and Gilbert's continued operation of Pastimes constituted a fully executed oral agreement that modified the dissolution provision of the Agreement. View "Pastimes v. Clavin" on Justia Law

Tracy Stanfield was injured in 1992. A settlement relating to his injuries resulted in an annuity providing periodic payments to Stanfield from Metropolitan Life Insurance Company (MetLife). Stanfield assigned certain annuity payments, and the assignee in turn assigned them to J. G. Wentworth S.S.C. Limited Partnership (Wentworth). Stanfield later caused MetLife to ignore the assignments to Wentworth. Wentworth filed an action in a Pennsylvania state court and obtained a judgment against Stanfield. Wentworth then filed a motion for a judgment against MetLife for the same amount. A Pennsylvania court granted the motion. Soon thereafter, Stanfield's mother Mildred filed a petition in an Oklahoma district court to be appointed guardian of her son's estate. MetLife filed an interpleader action in a Pennsylvania federal district court and named Wentworth and Mildred in her capacity as guardian of her son's estate as defendants. Mildred asked attorney Loyde Warren to accept service of process on her behalf, and he agreed. Stanfield signed Warren's contingency fee agreement; Warren then engaged local counsel in Pennsylvania. At the settlement conference the parties agreed that Wentworth's judgment would be withdrawn; payments would be paid from Stanfield's annuity payments to Wentworth; the annuity assignment was rescinded; and future annuity payments from MetLife to Stanfield, as guardian, would be made payable in care of Warren. In 2009, Warren filed a motion in the open and continuing guardianship case before the Oklahoma district court for approval of both the 2001 contract for legal representation and the payment of legal fees made pursuant to that contract. Mildred objected and among her arguments, she maintained that a contingency fee for successfully defending a client from a judgment was improper, and that the fee agreement was unenforceable because it had not been approved by the guardianship court. The district court denied Warren's motion, "[b]ecause the application was not filed prior to payment of the fee and was not filed until nearly eight years after the contract was executed." The Court of Civil Appeals affirmed, and Warren appealed. Upon review, the Supreme Court held that (1) the district court possessed jurisdiction to adjudicate a guardianship proceeding a motion seeking court approval of a lawyer's contingent fee contract; (2) the guardian's failure to obtain court approval of a contingent fee agreement prior to payment pursuant to that agreement is not, by itself, a legally sufficient reason for a court to deny a motion to approve the agreement; and (3) the mere passage of time between creation of a contingent fee agreement and when it is presented to a court for approval in an open and continuing guardianship proceeding is not a legally sufficient reason to deny approval of that agreement. View "In the matter of the Guardianship of Stanfield" on Justia Law