Boehm v. Cokedale Llc

• Decision Date: 13 September 2011
• Docket Number: No. DA 10–0594.,DA 10–0594.
• Citation: 362 Mont. 65,261 P.3d 994,2011 MT 224
• Parties: Carter BOEHM, Trustee, Plaintiff and Appellant,v.COKEDALE, LLC, a Montana Limited Liability Company, and Allen Carter, Defendants and Appellees.
• Court: Montana Supreme Court

362 Mont. 65

261 P.3d 994

2011 MT 224

Carter BOEHM, Trustee, Plaintiff and Appellant,

v.COKEDALE, LLC, a Montana Limited Liability Company, and Allen Carter, Defendants and Appellees.

No. DA 10–0594.

Supreme Court of Montana.

Submitted on Briefs July 27, 2011.Decided Sept. 13, 2011.

For Appellant: Robert L. Jovick, Attorney at Law, Livingston, Montana.For Appellees: Leanne M. Schraudner, Schraudner & Hillier, L.L.P., Bozeman, Montana (for Appellee Cokedale, LLC), Susan B. Swimley, Attorney at Law, Bozeman, Montana (for Appellee Allen Carter), Ryan K. Jackson, Jackson Law, P.C., Bozeman, Montana (for Appellee Allen Carter).Justice BETH BAKER delivered the Opinion of the Court.

[362 Mont. 66] ¶ 1 Plaintiff Carter Boehm, Trustee, appeals from the District Court's Order on Summary Judgment filed November 1, 2010, granting summary judgment to Cokedale, LLC and Allen Carter, and awarding them attorneys' fees. The defendants will be collectively referred to as “Cokedale” except when it is necessary to differentiate between the two. We consider the following issues on appeal:

¶ 2 1. Did the District Court err in awarding summary judgment to Cokedale for Boehm's failure to prosecute the action in the name of the real party in interest?

¶ 3 2. Did the District Court err in awarding attorneys' fees to the Defendants?

BACKGROUND

¶ 4 In 2005, Boehm purchased a 20–acre tract of land west of Livingston, Montana. At Boehm's request, the sellers deeded the property to “Carter Boehm, Trustee.” Cokedale owns a larger parcel of land nearby and uphill from the Boehm tract. During construction of a road up a steep hillside to reach Cokedale's land, rocks of various sizes rolled downhill into a creek and onto the Boehm property. Defendant Allen Carter was associated with Cokedale in developing its property and constructing the road.

¶ 5 Boehm sued Cokedale for property damages caused by the rocks, and on April 10, 2009, filed a First Amended Complaint adding claims for assault and battery, intentional infliction of emotional distress, and negligent infliction of emotional distress. Those tort claims were based upon allegations that Carter and others “knocked Plaintiff's glasses from his head, knocked his cell phone, on which he was speaking from his hand, and punched and kicked Plaintiff.” Neither complaint alleged any facts concerning the purported trust. On May 4, 2009, Cokedale filed a request for a more definite statement of the claim, raising the issue whether “Carter Boehm, Trustee” was the real party in interest. In a pleading filed June 24, 2009, Boehm objected to providing a more definite statement, representing as follows:

The real property at issue is held in the name of Carter Boehm, Trustee. No trust exists inasmuch as the designation of ownership in the name of a trustee is a convenience permitted under Montana law for the purpose of holding acquiring and holding [sic] real property in anticipation of establishing a trust for purpose of ownership. Accordingly, this suit is brought by Carter Boehm personally and as owner of the real property at issue.

(Emphasis supplied.) Contrary to these representations, Boehm did not seek to amend the complaint to include himself as a plaintiff in his personal capacity. The District Court denied the motion for a more definite statement, but directed the plaintiff to cooperate during discovery to address Cokedale's concerns.

¶ 6 During discovery, Boehm testified that it is his practice when he purchases real property to have the seller name him as a “trustee” in the deed. This, he said, is based on advice given him by an unnamed lawyer in Virginia in the 1980s. He also testified that as to the property involved in this action, there was no document that created the trust; that he did not know of any terms of the trust; that he did not know whether the trust was revocable or irrevocable; and that the trust had never filed a tax return.

¶ 7 After a period of discovery including depositions of the principal parties, on February 12, 2010, Cokedale moved for summary judgment, asking that either Carter Boehm be named the plaintiff as the real party in interest or, if not, that the action be dismissed. Cokedale argued that discovery had not uncovered any facts supporting the existence of a trust and that therefore under M.R. Civ. P. 17(a), “Carter Boehm, Trustee” was not the real party in interest. In addition, Cokedale argued that since Boehm continued to maintain the action as a trustee, he could not maintain the personal tort claims for infliction of emotional distress or assault. Boehm resisted Cokedale's motion for summary judgment, arguing now that there was a valid trust under Montana law and that he could sue on all the claims in the amended complaint as a trustee. Boehm did not seek to amend the complaint to include himself as a plaintiff in his individual capacity.

¶ 8 The District Court held a hearing on the motion for summary judgment on September 30, 2010. Boehm's attorney argued that there was in fact a valid trust under Montana law and that it arose when Boehm took the property through a deed which identified him as “Carter Boehm, Trustee.” Counsel asserted that Boehm requested the sellers name him as a “trustee” based upon legal advice Boehm obtained at some time in the past in another state. Counsel further asserted that Boehm was both trustee and beneficiary of the trust, and that the purpose of the trust was for “holding, further conveying, supervising that property.” While acknowledging that Boehm never signed any document creating the trust, counsel argued the trust was created “as a matter of law” when Boehm took the deed identifying him as a “trustee.” At the hearing the District Court gave Boehm's attorney the option to amend the complaint to add Boehm individually as a plaintiff, but counsel declined because he had no authority from Boehm to do so.

¶ 9 Thereafter, the District Court issued its Order on Summary Judgment, concluding that Boehm was not the trustee of any trust validly established under Montana law. The District Court found the purported trust had no named beneficiary or process for naming one as required by § 72–33–206, MCA; did not satisfy the statute of frauds requirement of § 72–33–208, MCA; and was not a trust created by operation of law. Since Boehm was perpetuating the lawsuit on behalf of a non-existent trust, the District Court granted Cokedale's motion for summary judgment.

¶ 10 The District Court then determined that Boehm's action had forced “basically innocent Defendants” to endure unnecessary expense and stress to defend themselves and that equity demanded a remedy. The District Court noted that Boehm had deliberately chosen throughout the case to assert he could maintain the action as a “trustee” and that Boehm had opposed all efforts to clarify the situation. Boehm's arguments about his capacity throughout the case caused much briefing and other proceedings that were “superfluous and unnecessary.” Accordingly, the District Court awarded Cokedale their attorneys' fees and costs incurred since their Motion for More Definite Statement. The District Court's Judgment, entered February 9, 2011, awarded attorneys' fees and costs to Cokedale in the amount of $51,473.69 and to Carter in the amount of $23,616.78.

¶ 11 On appeal, Boehm asserts the District Court erred in its determination that there was no valid trust, leading to dismissal of the action, and improperly awarded attorneys' fees to Cokedale.

STANDARD OF REVIEW

¶ 12 This Court reviews de novo a district court's decision on a motion for summary judgment using the same criteria applied by the district court under M.R. Civ. P. 56. Corporate Air v. Edwards Jet Center Montana, Inc., 2008 MT 283, ¶ 24, 345 Mont. 336, 190 P.3d 1111. This Court reviews a district court's award of attorneys' fees to determine whether the award was an abuse of discretion. Kuhr v. City of Billings, 2007 MT 201, ¶ 41, 338 Mont. 402, 168 P.3d 615.

DISCUSSION

¶ 13 Issue 1: Did the District Court err in granting summary judgment to Cokedale? Cokedale's motion for summary judgment was based on M.R. Civ. P. 17(a). Cokedale contended that “Carter Boehm, Trustee” was not the real party in interest because Boehm was not the trustee of a valid trust, and that the tort claims for personal injury could not be maintained by a trustee.

¶ 14 It is clear the District Court properly concluded that Boehm was not the trustee of a valid trust. Boehm admitted in discovery the alleged trust was “undisclosed,” was not in writing, had no identifiable terms, and never filed a tax return. While a trust may be created by the declaration of a property owner that he holds the property as a trustee, § 72–33–201(1), MCA, creation of that trust is “[s]ubject to other provisions” of the trust code. Those other statutory provisions, missing here—as evidenced by the “trust” Boehm described in his deposition—include a proper manifestation of a trustor to create a trust (§ 72–33–202, MCA); a trust purpose that can be determined with reasonable certainty (§ 72–33–205, MCA); a designated beneficiary or a trust instrument providing a way to determine the beneficiary (§ 72–33–206, MCA); and either a written instrument signed by the trustee or the trustor (§ 72–33–208(1) and (2), MCA); or a trust created by operation of law (§ 72–33–208(3), MCA). While Boehm argues that a trust exists by operation of law, he has provided no facts to support the existence of a resulting trust (§§ 72–33–216, –217 and –218, MCA) or a constructive trust (§ 72–33–219, MCA). Hilliard v. Hilliard, 255 Mont. 487, 488–89, 844 P.2d 54, 55 (1992).

¶ 15 The party alleging the existence of any trust must establish it by clear and convincing evidence that is practically free from doubt. LeFeber v. Johnson, 2009 MT 188, ¶ 27, 351 Mont. 75, 209 P.3d 254. Boehm's evidence offered to support the existence of a trust in this case fell far short of that standard...