Brown v. Brown
| Decision Date | 09 February 2011 |
| Docket Number | No. W2009-02264-COA-R3-CV,W2009-02264-COA-R3-CV |
| Parties | RYNE W. BROWN v. CATHERINE L. BROWN, Trustee, et al. |
| Court | Tennessee Court of Appeals |
RYNE W. BROWN
v.
CATHERINE L. BROWN, Trustee, et al.
No. W2009-02264-COA-R3-CV
COURT OF APPEALS OF TENNESSEE
AT JACKSON
Filed February 9, 2011
Appellant contends that he is a beneficiary of a trust created by his parents and thus entitled to distributions of principal and income. In a declaratory judgment action, the trial court determined that Appellant was not entitled to mandatory distributions of income or principal until both of his parents were deceased. We affirm this portion of the trial court's judgment. The trial court also determined that no corporate trustee was required. We reverse this portion of the trial court's judgment and remand for the appointment of a corporate trustee.
J. STEVEN STAFFORD, J., delivered the opinion of the Court, in which ALAN E. HIGHERS, P.J., W.S., and DAVID R. FARMER, J., joined.
Kevin A. Snider, Germantown, Tennessee, for the appellant, Ryne W. Brown.
Lynn W. Thompson and G. Patrick Arnoult, Memphis, Tennessee, for the appellees, Catherine L. Brown, as Trustee and Individually, Cathleen Lucille Brown Sibley, Graham W. Sibley, Hilary E. Sibley Murphy, Ashley Mills Sibley, and Alexander Mills Sibley.
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This case involves the interpretation of a trust. On September 25, 1992, Roland W. and Catherine L. Brown executed and funded the "Roland and Catherine Brown Living Trust" (also referred to hereinafter as the "trust" or "trust agreement"). The trust agreement was amendable and revocable while both Roland and Catherine Brown were living, and the two served as joint trustees of the trust. On February 13, 1999, Roland Brown died. Under the terms of the trust, at the death of Roland Brown, the assets of the Roland and Catherine Brown Living Trust were divided into two trusts: (1) the Brown Marital Trust; and (2) the Brown Family Trust. The death of Roland Brown also activated the appointment of Union Planters Bank (referred to hereinafter as its successor, "Regions Bank") to serve with Catherine Brown as trustees of both the Brown Marital Trust and the Brown Family Trust.2
On September 26, 2006, Appellant, Ryne Brown, who is the son of Roland and Catherine Brown, filed a complaint for declaratory judgment in the Chancery Court of Shelby County. This complaint identified the defendants as Catherine L. Brown, Trustee, Cecil Smith, and Regions Bank. Mr. Smith, the attorney who drafted the trust, was later dismissed as a defendant. Ryne Brown's second amended complaint, filed May 16, 2008, identified as defendants Catherine L. Brown, Trustee; Catherine L. Brown, individually; Cathleen Lucille Brown Sibley; Graham W. Sibley; Hilary E. Sibley; Ashley Mills Sibley; and Alexander Sibley (together, "Appellees"3); and Regions Bank. By stipulation of the parties, discussed in more detail below, Regions Bank was later dismissed as a defendant. Mr. Brown's second amended complaint for declaratory judgment delineated twenty-four "Disputed Issues to be Decided." At trial and on appeal, Mr. Brown essentially contends that he is a current beneficiary of the Brown Family Trust, and, consequently, entitled to income and principal distributions. Mr. Brown's sub-issues all stem from this contention and generally relate to the management of the trust in contradiction to his alleged status as a beneficiary.
A trial was held on September 8, 2009, and a final appealable order was obtained on June 16, 2010. The trial court found that Ryne Brown did not have a "discernible interest" in the Brown Family Trust "until such time that the surviving Trustmaker, Catherine L. Brown, had died and only if there [we]re trust assets remaining at that time." Mr. Brown
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raises the following issues on appeal, as stated in his second amended brief:
1. Whether the Trial Court erred in its interpretation of the Brown Family Trust as to the degree of decision-making and discretion of the surviving Trustmaker regarding the distribution of income subject to the terms mentioned therein.
2. Whether the Trial Court erred in its interpretation of the Brown Family Trust by not giving a reasonable meaning to all of its provisions without neutralizing portions of it.
3. Whether the Trial Court erred with its holding as to rights and obligations of the Trustees under the Brown Family Trust.
4. Whether the Trial Court properly determined the rights of the current and contingent beneficiaries listed under the Brown Family Trust.
This case was tried before the court sitting without a jury; therefore, we review the trial court's findings of fact de novo with a presumption of correctness, unless the evidence preponderates otherwise. Tenn. R. App. P. 13(d). A trust instrument is to be interpreted similarly to contracts, deeds, or wills. In re Estate of Marks, 187 S.W.3d 21, 28 (Tenn. Ct. App. 2005) (citing Marks v. S. Trust Co., 310 S.W.2d 435, 437-38 (Tenn. 1958)). Consequently, the interpretation of a trust is a question of law for the court. Estate of Burchfiel v. First United Methodist Church of Sevierville, 933 S.W.2d 481, 483 (Tenn. Ct. App. 1996). No presumption of correctness attaches to the trial court's conclusions of law and our review is de novo. Bowden v. Ward, 27 S.W.3d 913, 916 (Tenn. 2000).
A trust must be interpreted according to its plain terms as written. Graber v. Graber, No. W2003-01180-COA-R3-CV, 2003 WL 23099689, at *3 (Tenn. Ct. App. Dec. 31, 2003) (citing Warren v. Metro Gov't of Nashville and Davidson Co., 955 S.W.2d 618, 622-23 (Tenn. Ct. App. 1997)). "The interpretation should be one that gives reasonable meaning to all of the provisions of the agreement, without rendering portions of it neutralized or without effect." Graber, 2003 WL 23099689, at *3 (citing Davidson v. Davidson, 916 S.W.2d 918, 922-23 (Tenn. Ct. App. 1995)). The entire written agreement must be considered in order
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to ascertain the parties' intent. Graber, 2003 WL 23099689, at *3 (citing D & E Constr. Co. v. Robert J. Denley Co., 38 S.W.3d 513, 518-19 (Tenn. 2001)). The intent of the settlors must be derived from the four corners of the agreement, giving effect to all parts of the agreement. In Re Estate of Marks, 187 S.W.3d at 28 (citing Marks v. S. Trust Co., 310 S.W.2d at 438). The settlors' intent is ascertained from the particular words used, from the context, and from the general scope and purpose of the instrument. Holder v. First Tennessee Bank N.A. Memphis, No. W1998-00890-COA-R3-CV, 2000 WL 349727, at *3 (Tenn. Ct. App. March 31, 2000) (citing Daugherty v. Daugherty, 784 S.W.2d 650, 653 (Tenn. 1990)). If the agreement is ambiguous, then the intent of the parties may be ascertained by extrinsic evidence. Blue Diamond Coal v. Holland-Am. Ins. Co., 671 S.W.2d 829, 833 (Tenn. 1984). "A contract is considered ambiguous if, after considering its plain terms as a whole, it is susceptible to more than one meaning." Graber, 2003 WL 23099689, at *3 (quoting McGee v. Best, 106 S.W.3d 48, 62-63 (Tenn. Ct. App. 2002)).
To determine whether Mr. Brown is a beneficiary of the Brown Family Trust, we must first determine which portions of the trust agreement are presently in effect. Appellees contend that because a settlor of the trust, Mrs. Brown (indisputably referred to in the trust agreement as the "surviving Trustmaker"), is still living,...
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