Callaway v. Willard, s. A12A0653
| Decision Date | 11 April 2013 |
| Docket Number | Nos. A12A0653,A12A2323.,s. A12A0653 |
| Citation | 321 Ga.App. 349,739 S.E.2d 533 |
| Parties | CALLAWAY v. WILLARD. Durham v. Durham, et al. |
| Court | Georgia Court of Appeals |
OPINION TEXT STARTS HERE
Callaway, Neville & Brinson, William J. Neville Jr., Claxton, for William E. Callaway.
Bryan Cave, Luke A. Lantta, Atlanta, Nicole J. Wade, for Lucinda Durham Willard.
Dubberly & McGovern, Bruce D. Dubberly, Jr., Glennville, for Lawrence C. Durham.
Spivey, Carlton & Edenfield, J. Franklin Edenfield, Swainsboro, for Lawrence H. Durham and Hugh Lee Durham.
These related appeals arise from a declaratory judgment action filed in Tattnall County Superior Court by William E. Callaway, Jr., in his capacity as Trustee of the Marjorie H. Durham Irrevocable Trust, to determine the effect of an in terrorem clause in the Trust documents. The Trust donor, Marjorie H. Durham, executed the inter vivos trust in 2000, naming herself as a beneficiary and her four children as residual beneficiaries. Following Mrs. Durham's death, Callaway filed a complaint for declaratory judgment against the four trust beneficiaries, seeking an order declaring that three of the beneficiaries, Wallace Bryant Durham (“Bryant”), Hugh Lee Durham (“Lee”), and Lucinda Durham Willard (“Lucinda”), had forfeited their respective interests in the Trust estate under the in terrorem clause and that the entirety of the estate should therefore be distributed to the fourth beneficiary, Lawrence H. Durham. (“Lawrence”).1 Lawrence filed a counterclaim and a cross-claim and later moved for summary judgment, alleging that because he was the only child who did not violate the in terrorem clause, he is the sole beneficiary of the residue of the trust estate. Lucinda also filed a motion for summary judgment, alleging that she had not violated the in terrorem clause and remains a valid beneficiary of the trust. The trial court granted Lucinda's motion for summary judgment and denied Lawrence's. In Case No. A12A0653, Callaway appeals from the trial court's grant of summary judgment in favor of Lucinda. In Case No. A12A2323, Lawrence appeals the denial of his motion for summary judgment as to Bryant and Lee. For reasons explained below, we find no error in either case, and therefore affirm both orders of the trial court. We also remand Case No. A12A2323 for further proceedings consistent with this opinion.
The standard for summary judgment is well-settled:
Summary judgment is warranted when any material fact is undisputed, as shown by the pleadings and record evidence, and this fact entitles the moving party to judgment as a matter of law. So, to prevail on a motion for summary judgment, the moving party must show that there is no genuine dispute as to a specific material fact and that this specific fact is enough, regardless of any other facts in the case, to entitle the moving party to judgment as a matter of law.
(Citations omitted.) Strength v. Lovett, 311 Ga.App. 35, 39(2), 714 S.E.2d 723 (2011). We review a trial court's ruling on summary judgment de novo, “viewing the evidence in the record, as well as any inferences that might reasonably be drawn from that evidence, in the light most favorable to the nonmoving party.” (Citation and punctuation omitted.) Beale v. O'Shea, 319 Ga.App. 1, 2, 735 S.E.2d 29 (2012).
Here, the relevant facts in the record are undisputed, and the evidence shows that on or about April 13, 2000, Mrs. Durham executed an irrevocable trust agreement naming herself as a beneficiary and Callaway as trustee. The Trust instrument provided that, upon Mrs. Durham's death, the Trust assets would be divided according to Paragraph 4(f), which states:
all of the property remaining in the hands of the Trustee shall be distributed to my four children, with the properties designated as Trust Tract A being conveyed to Lawrence H. Durham in fee simple, and the properties designated as Trust Tract B being conveyed to Bryant Durham, Lee Durham and Lucinda D. Willard in fee simple....
The Trust instrument also contains an in terrorem clause, which provides as follows:
Should any one of my four children seek or file a legal or equitable challenge to the management decisions made or proposed by my trustee during the administration of this Trust, or pertaining to the management of the Trust Estate, or in regards to the final distribution of the Trust Estate, and be unsuccessful in said legal or equitable challenge, then said child or children shall, as of said date that the challenge is determined adversely to said child or children, forfeit any right, title or interest in said Trust Estate, and the said interest of the child or children making such challenge, less all reasonable attorney fees and expenses incurred by my Trustee, shall pass in the final distribution of the Trust Estate in fee simple to the remaining child or children who did not join in said legal or equitable challenge, and my Trustee shall make, in his sole discretion, any necessary division of the two Trust Tracts so as to maintain the above stated plan for the division of ownership of said Trust Estate between my children.
(Emphasis supplied.)
On March 2, 2001, approximately one year after the creation of the Trust, Bryant and Lee filed suit in the Superior Court of Evans County against Callaway, individually and in his capacity as trustee. They subsequently filed an amended complaint, alleging that Callaway was Lawrence's personal attorney and that he functioned as Lawrence's agent; that Lawrence was significantly indebted to Mrs. Durham and stood to benefit disproportionately from the testamentary provision of the Trust; that Callaway had drafted the Trust instrument so as to guarantee himself an annual income of $35,000 from the Trust, regardless of whether he performed any services for the Trust and regardless of whether the Trust had liquid assets available to pay him; that Mrs. Durham lacked the requisite mental capacity to execute the Trust instrument, a warranty deed transferring certain real property to the Trust, and her affirmation of the Trust; and that both the Trust and Mrs. Durham's subsequent affirmation of the Trust were null and void, because they resulted from Lawrence's exercise of undue influence, coercion, and duress against Mrs. Durham. The complaint therefore sought an order: (i) setting aside the Trust and Mrs. Durham's later ratification of the Trust; (ii) canceling the warranty deed conveying property to the Trust; (iii) ordering an accounting of Trust property; and (iv) removing Callaway as Trustee and appointing a different, temporary trustee pending the outcome of the litigation. The complaint also sought an award of damages against Callaway.
On June 6, 2001, Bryant and Lee filed a motion in the Evans County action seeking an injunction and temporary restraining order to prevent Callaway from liquidating certain timber assets owned by the Trust. The motion, which sought to preserve the status quo pending a decision in the Evans County action, requested entry of an order that would allow Callaway to encroach upon Trust assets, but only after first receiving permission from the court to do so. Although no ruling on this motion appears in the record, there is some evidence indicating that an order was entered requiring Callaway, at least under some circumstances, to obtain court approval before encumbering trust assets.
At a hearing held on October 29, 2001, the trial court discussed with counsel for all parties the possibility of staying the Evans County action pending the resolution of the guardianship proceeding then ongoing in Tattnall County. Specifically, the court noted that the issue of whether Mrs. Durham met the standard for guardianship could also resolve one of the central issues in the Evans County action, namely whether Mrs. Durham was competent to execute the Trust instrument, the warranty deed, and the affirmation of the Trust. The parties agreed, and on November 6, 2001, the trial court entered an order staying the Evans County action pending the outcome of the guardianship proceeding. On April 19, 2002, several months after the Petition for Guardianship was denied, Bryant and Lee voluntarily dismissed the Evans County action.
On May 17, 2001, Bryant, Lee, and Lucinda filed a petition for guardianship of their mother in the Probate Court of Tattnall County. The guardianship was sought on the grounds that Mrs. Durham was incapacitated by Alzheimer's disease. As part of the guardianship proceeding, Mrs. Durham underwent a court-ordered medical exam, and the examining physician reported that, in his opinion, she did not meet the standard for guardianship. Based on this report, the probate court dismissed the guardianship petition, and Bryant, Lee, and Lucinda appealed that decision to the Tattnall County Superior Court.
Following a trial on the issue of Mrs. Durham's competency, a jury found that she was not incapacitated. The Tattnall County Superior Court entered judgment on that verdict and denied the guardianship petition on January 10, 2002.
Following Mrs. Durham's death in 2009, Callaway filed the current action seeking a declaratory judgment that Bryant, Lee, and Lucinda had violated the in terrorem clause of the Trust instrument, had thereby forfeited their rights to inherit under that instrument, and that all Trust property should therefore be distributed to Lawrence. In response, Lawrence filed a counterclaim against Callaway and cross-claims against each of his siblings. Lawrence also sought an order holding that Bryant, Lee, and Lucinda had forfeited their rights in Mrs. Durham's estate and that Callaway should therefore distribute all Trust property to Lawrence.
Lucinda filed motions for summary judgment against both Callaway and Lawrence as to the claims asserted by each against her. Lawrence responded by filing a motion for summary judgment on his counterclaim...
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