Clark v. Mooney (In re Donald F. Clark Tr.)

• Docket Number: 355300
• Decision Date: 20 January 2022
• Parties: In re DONALD F. CLARK TRUST. v. MICHAEL A. MOONEY, Appellee. ELAINE D. CLARK, Appellant,
• Court: Court of Appeal of Michigan — District of US

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In re DONALD F. CLARK TRUST.

ELAINE D. CLARK, Appellant, v. MICHAEL A. MOONEY, Appellee.

No. 355300

Court of Appeals of Michigan

January 20, 2022

UNPUBLISHED

Iosco Probate Court LC No. 18-003656-TV

Before: Cameron, P.J., and M. J. Kelly and Shapiro, JJ.

Per Curiam.

Petitioner-appellant Elaine D. Clark, appeals by right the probate court's order denying her motion for summary disposition under MCR 2.116(C)(10) and denying her petitions to return real property and bank account funds. We affirm for the reasons stated in this opinion.

I. BASIC FACTS

This is the second time that this case is before us. In our prior decision, we described the general background for this case:

On November 29, 2017, Donald F. Clark ("Settlor") created a noncharitable, irrevocable trust [the Trust] to provide for the benefit and welfare of himself and his wife appellant Elaine D. Clark. The trust named respondent[, Michael A. Mooney, ] as trustee and provided that he would have the sole discretion to distribute any trust income or principal to the beneficiaries. Elaine was the primary beneficiary, and upon her death, her son, appellant Donald L. Clark, would become the sole beneficiary. On Donald L. Clark's death, if the trust had not been completely distributed, the remainder would be distributed to respondent. Settlor died on December 9, 2017. On March 22, 2018, the probate court removed respondent from his position as trustee to avoid a conflict of interest. [In re Donald F Clark Trust, unpublished per curiam opinion of the Court of Appeals, issued February 20, 2020 (Docket No. 346539), p 1.]

During the decedent's life and after the Trust's creation, funds from two jointly held PNC bank accounts were transferred into the Trust. Additionally, petitioner met with the decedent's lawyer, Robert Myles, and signed deeds transferring real property into the Trust. Petitioner disputes these transfers and filed petitions to have the funds and property returned to her, arguing that she did not understand what she was doing when she transferred the real property and that respondent improperly transferred the PNC accounts for his own benefit.

Petitioner moved for summary disposition under MCR 2.116(C)(10) only as it related to the PNC accounts. However, the probate court denied the motion, finding that there was a genuine issue of material fact regarding whether the decedent desired that the the funds to pass to petitioner upon his death or whether he desired for those funds to be placed within the Trust and paid out to petitioner to care for her after his death. Additionally, after an evidentiary hearing held on the same day, the trial court found that petitioner had failed to show that the transfers—of real property and the funds in the PNC accounts—should be voided, so it denied the petition to return real property and the petition to return the funds from the PNC accounts.

II. SUMMARY DISPOSITION

A. STANDARD OF REVIEW

Petitioner argues that the trial court erred by denying her motion for summary disposition as it relates to the PNC accounts. "This Court reviews de novo a trial court's decision on a motion for summary disposition, as well as questions of statutory interpretation and the construction and application of court rules." Dextrom v Wexford Co, 287 Mich.App. 406, 416; 789 N.W.2d 211 (2010). A motion is properly granted under MCR 2.116(C)(10) when "there is no genuine issue with respect to any material fact and the moving party is entitled to judgment as a matter of law." Id. at 415. When reviewing such a motion, "a court must examine the documentary evidence presented and, drawing all reasonable inferences in favor of the nonmoving party, determine whether a genuine issue of material fact exists. A question of fact exists when reasonable minds could differ as to the conclusions to be drawn from the evidence." Id. at 415-416. "This Court is liberal in finding genuine issues of material fact." Jimkoski v Shupe, 282 Mich.App. 1, 5; 763 N.W.2d 1 (2008).

B. ANALYSIS

Petitioner argues that under MCL 487.703, a joint bank account with a deposit was prima facie evidence of the depositor's intention to vest title in the survivor. Thus, because she and the decedent created the PNC accounts in 2006 with rights of survivorship and deposited funds into the accounts, there is no genuine issue concerning whether the decedent intended for the funds to pass to petitioner upon his death. MCL 487.703 provides in relevant part:

When a deposit has been made, or shall hereafter be made, in any banking institution transacting business in this state, in the names of 2 or more persons, payable to either or the survivor or survivors, such deposit or any part thereof or any interest or dividend thereon and any additions thereto, made by any 1 of the said persons, shall become the property of such persons as joint tenants, and the same shall be held for the exclusive use of the persons so named and may be paid to any 1 of said persons during the lifetime of said persons or to the survivor or survivors after the death of 1 of them, and such payment and the receipt or acquittance of the same to whom such payment is made shall be a valid and sufficient release and discharge to said banking institution for all payments made on account of such deposits prior to the receipt by said bank of notice in writing not to pay such deposit in accordance with the terms thereof.

The making of the deposit in such form shall, in the absence of fraud or undue influence, be prima facie evidence, in any action or proceeding, to which either such banking institution or surviving depositor or depositors is a party, of the intention of such depositors to vest title to such deposit and the additions thereto in such survivor or survivors.

This statute shields a banking institution from liability "for any withdrawal of funds made by a co-owner of the account, at least in the absence of prior written notice that withdrawals are not permitted." Lewis Estate v Rosebrook, 329 Mich.App. 85, 88; 941 N.W.2d 74 (2019). However, this does not "serve as a sword for the withdrawing co-owner to pierce the nonwithdrawing co-owner's rights. Instead, the withdrawing co-owner must take the funds from the account as a co-owner and, therefore, must use the funds in a manner consistent with the other co-owner's rights." Id.

MCL 487.703 "provides two primary rights—a right of proportional share of the funds in the account and a right of survivorship." Id. at 95. However, "parties, by their words or deeds, can agree to put conditions or restrictions on the account, for example, by expressing an intent that the funds are to be held merely for the convenience of the depositor or are otherwise subject to revocation at the sole discretion of the depositor." Id. Although "the law presumes that joint tenants are equal contributors, have equal ownership shares, and have equal rights to access and use the funds," this "presumption can be rebutted . . . and this is a question of fact subject to clear-error review on appeal." Id. at 96. The form of the account does not control; rather, it is the "realities of ownership" that "control in a dispute between parties to the joint tenancy," and "[t]he rights are determined by the intent of the depositor at the time of the deposit." Id. at 96-97 (quotation marks omitted).

In Lewis Estate, 329 Mich.App. at 88, the parties owned three joint bank accounts with the right of survivorship, and both parties held equal rights in the accounts. This Court explained the nature of the parties' relationship and use of these accounts:

Carol Rosebrook and Lewis were a couple for approximately 24 years, living and socializing together, though they never married. They had several joint and individual financial accounts, three of which are relevant here. In 2001, 2003, and 2009, the parties opened joint accounts with the right of survivorship at Old Kent Bank (later Fifth Third Bank) and Sidney State Bank. All three accounts were funded primarily, if not exclusively, by Lewis. The couple used the funds to pay their ordinary day-to-day expenses, sometimes consulting each other and sometimes not, depending on the nature and amount of the expense. As the probate court concluded, "In all respects these accounts were held and used equally by both parties."

Lewis was diagnosed with a serious illness in 2013, and in October 2016, he moved into a care facility. The couple ended their relationship in late January 2017, and they agreed to a 30-day period to sort out their affairs. Immediately after the split, Lewis and his daughter went to Fifth Third Bank and asked that the bank "freeze" the joint accounts. They maintain that they were told that the accounts could not be "frozen," and they left the bank without withdrawing any funds or closing the accounts.

Over the next two weeks, Rosebrook transferred approximately $255, 000 from the three accounts to accounts solely in her own name; this total represented substantially all of the funds in the three accounts. At the time, she was a cotrustee of the Robert G. Lewis, Sr., Trust. Rosebrook also had the power to act on Lewis's financial behalf under a durable power of attorney ["the DPOA"]. Lewis did not authorize or otherwise agree to the transfers, nor did he even know that the funds had been removed until he went to one of the banks and tried to access an account. [Id. at 89-90.]

This Court held that this transfer was unlawful because Rosebrook "acted in her own personal capacity, rather than in her capacity as a co-owner in the joint tenancy[.]" Id. at 89. In doing so, this Court reasoned that the evidence showed that Lewis did not "intend[] to convey a 100% interest in the funds to Rosebrook or that he intended to divest himself of...