Aaron Stapp Living Trust v. Stapp

• Decision Date: 31 May 2022
• Docket Number: 2020-CA-01282-COA
• Citation: 341 So.3d 141
• Parties: In re the AARON STAPP LIVING TRUST: Troy Stapp, Appellant v. Amy STAPP, Appellee
• Court: Mississippi Court of Appeals

341 So.3d 141

In re the AARON STAPP LIVING TRUST: Troy Stapp, Appellant

v.Amy STAPP, Appellee

NO. 2020-CA-01282-COA

Court of Appeals of Mississippi.

May 31, 2022

ATTORNEY FOR APPELLANT: TAYLOR D. BUNTIN III, Southaven

ATTORNEYS FOR APPELLEE: A. E. (RUSTY) HARLOW JR., KATHI CRESTMAN WILSON, Grenada, MORGAN KAY JACKSON

BEFORE CARLTON, P.J., McDONALD AND EMFINGER, JJ.

EMFINGER, J., FOR THE COURT:

¶1. Aaron Stapp operated a successful cattle farm in Panola County for several years. On December 17, 2009, he and his wife, Bobbie Stapp, created the Stapp Revocable Living Trust and placed certain assets into the trust. On May 28, 2015, Aaron Stapp then created the Aaron Stapp Living Trust and, again, placed certain assets into this trust.¹ A quitclaim deed, that was introduced into evidence at trial, indicated that the farmland at issue in this appeal was first conveyed by Aaron T. Stapp and Bobbie N. Stapp to Aaron Stapp and Bobbie Stapp as Trustees of the Stapp Revocable Living Trust on December 17, 2009. The farmland was then conveyed by Aaron Stapp as Trustee of the Stapp Revocable Living Trust to Aaron Stapp as Trustee of the Aaron Stapp Living Trust on May 28, 2015. It would appear that Bobbie Stapp was deceased at the time of the latter conveyance, although there is no specific reference to her death in the record on appeal.

¶2. Aaron Stapp died on October 21, 2016. His last will and testament was probated, and his estate was opened on January 17, 2017, with Amy Stapp and Troy Stapp, his only children and the parties here, serving as co-executors. Amy and Troy also became trustees of both trusts at some point after their father's death. The estate was closed on November 30, 2018. On July 10, 2019, Troy was removed as a trustee of the two trusts, leaving Amy as the sole trustee. On September 27, 2019, Amy was removed as trustee, and attorney John T. Lamar was appointed as trustee by the chancery court.²

¶3. On April 20, 2020, Amy filed a petition in the Chancery Court of Panola County, Mississippi, asking the court to divide the corpus of the Aaron Stapp Living Trust or, in the alternative, to make a distribution to the beneficiaries. The petition alleges that Amy and her brother, Troy, are the only beneficiaries of the trust.³ Troy filed an answer and a counter-petition on June 1, 2020. In his answer, Troy denied that the relief Amy requested should be granted. In his counter-petition, Troy claimed that he should be reimbursed for certain expenses he incurred on behalf of the trust and that Amy should be required to reimburse the trust for her use of trust assets for her own benefit and for expenses the trust had incurred or the income it had lost as a result of Amy's use of trust assets. While Troy agreed that the brokerage accounts should be divided after being adjusted as suggested in his counter-petition, he argued that the farmland should not be sold, and should remain a trust asset.

¶4. These matters went to trial on June 24, 2020. Subsequently, the chancery court entered an order on August 3, 2020, resolving the matters presented. On August 12, 2020, Troy filed a "Motion to Amend and/or Clarify Judgment." On August 13, 2020, Amy also filed a "Motion to Clarify, Amend, and Reconsider." After considering both motions, the chancery court entered an additional order on October 28, 2020, which clarified that "all liquid assets shall be divided between the two beneficiaries prior to the auction of the remaining assets of the trust." All the additional requests contained in Amy's and Troy's motions were denied. The chancellor did not order that the farmland and houses be sold, and they remain assets of the trust. Aggrieved by portions of the chancellor's ruling, Troy appeals.

STANDARD OF REVIEW

¶5. "This Court employs a limited standard of review on appeals from chancery court." In re Est. of Baumgardner , 82 So. 3d 592, 598 (¶15) (Miss. 2012).

[T]his Court "will not disturb the factual findings of a chancellor when supported by substantial evidence unless the chancellor abused his discretion, was manifestly wrong, [or his findings were clearly erroneous[,] or [he] applied an erroneous legal standard."

Id . (quoting Biglane v. Under The Hill Corp. , 949 So. 2d 9, 13-14 (¶17) (Miss. 2007) ). "Questions of law are reviewed de novo." Id . (citing Corp. Mgmt. Inc. v. Greene County , 23 So. 3d 454, 459 (¶11) (Miss. 2009) ).

ANALYSIS

¶6. Troy raises several issues on appeal regarding the chancery court's order to sell and divide certain trust assets, as well as the disposition and reimbursement of other specific trust assets and expenses. Troy argues that the chancellor's ruling was not supported by substantial, credible, and reasonable evidence and was against the overwhelming weight of the evidence.

¶7. The chancellor's authority to modify or terminate a trust is established by statute. More specifically, Mississippi Code Annotated section 91-8-105 (a) - (b) (Rev. 2018) states in part:

Except as otherwise provided in the terms of the trust, this chapter governs the duties and powers of a trustee or any other fiduciary under this chapter, relations among trustees and such other fiduciaries, and the rights and interests of a beneficiary.... The terms of a trust prevail over any provision of this chapter except : ... (4) The power of the court to modify or terminate a trust under Sections 91-8-410 through 91-8-416[.]

(Emphasis added). Further, Mississippi Code Annotated section 91-8-411 states in part:

(b) Following the settlor's death, a noncharitable irrevocable trust may be terminated upon consent of all the qualified beneficiaries if the court concludes that continuance of the trust is not necessary to achieve any material purpose of the trust ....

(c) Upon termination of a trust under subsection (a) or (b), the trustee shall distribute the trust property as agreed by the qualified beneficiaries .

(d) If not all of the qualified beneficiaries consent to a proposed modification or termination of the trust under subsection (a) or (b), the modification or termination may be approved by the court if the court is satisfied that :

(1) If all of the qualified beneficiaries had consented, the trust could have been modified or terminated under this section; and

(2) The interests of a qualified beneficiary who does not consent will be adequately protected.

(Emphasis added).⁴

¶8. In this case, the chancery court did not issue written findings of fact or conclusions of law. Neither Amy nor Troy requested before trial, after trial, or after the chancellor's ruling that the chancellor issue written findings of fact or conclusions of law. In Thomas v. Thomas , 281 So. 3d 1191, 1213 (¶79) (Miss. Ct. App. 2019), this Court held that "when there are no specific findings of fact, this Court will assume that the trial court made determinations of fact sufficient to support its judgment." We must then assume that the chancellor made the necessary findings, pursuant to the above statutes, that gave him the authority to modify the trusts.

¶9. The chancery court was not provided with sufficient evidence that would allow the court to make an in-kind distribution of the trust's real property. Amy and Troy had differing opinions as to how the real property should or could be equitably divided. Troy did testify, however, that he believed an equitable in-kind distribution could be reached after all other issues were resolved. In turn, the chancery court left the real property in the trust while ruling on the disposition, management, and reimbursement of the remaining trust assets. Troy's arguments asserted on appeal stem from the chancery court's ruling on the disposition, management, and reimbursement of those remaining trust assets.

I. Did the chancery court err in requiring that all the farm equipment be auctioned?

¶10. Troy argues on appeal that the chancellor "afforded no reason for the sale of the [farm] equipment and the facts do not justify that decision." Troy further argues that neither he nor Amy requested that the farm be sold. Troy asserts that the cattle farm was once profitable for his father, and it was capable of being profitable in the future; he suggested a future plan of "backgrounding steers," rather than calves. Finally, Troy argues that even if the farming operation were discontinued, the equipment is necessary for the upkeep and maintenance of the property.

¶11. We will first address Troy's assertion that neither he nor Amy requested that the farm be sold. In paragraph 1 of Amy's petition, she stated that "[t]he Aaron Stapp Living Trust was created by Aaron Stapp on or about May 28, 2015." Paragraph 3 of her petition states that "[t]he parties have been unable to reach an amicable resolution." Paragraph 4 of the petition requests "that this Court divide the corpus of the Trust, or in the alternative, make a distribution to the beneficiaries." Amy's petition clearly requests a division of the entire corpus of the trust and more specifically the corpus of the trust created on May 28, 2015. As shown by the quitclaim deed mentioned above, Troy agreed that the farmland was part of the corpus of the 2015 trust. Amy's petition undoubtedly placed the matter of the disposition of the farm property before the chancery court.

¶12. While Troy argues that the farm had been profitable for his father and could be profitable in the future, the testimony showed that the farm had not made a profit since Aaron Stapp's death. Since their father's death, the trust had benefitted from the sale of several cows; however, up to fifteen cows died due to neglect. Both Amy and Troy had been afforded the opportunity to manage the farm for periods of more than a year each, but they were not really successful in maintaining a working farm. From the testimony, it did not appear that either Amy or Troy had the time, ability, or inclination to manage a working farm on a daily basis. Prior to trial, no efforts had been made by anyone to rent the land to a third party.

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