Commerce Bank, N.A. v. Blasdel, WD 61941.

Citation141 S.W.3d 434
Decision Date24 August 2004
Docket NumberNo. WD 61941.,WD 61941.
PartiesCOMMERCE BANK, N.A., Respondent, v. Robert Hudson BLASDEL, William Phillip Blasdel, and Barbara Blasdel Alexander, Respondents, and Deborah Peck Durland, Patricia Ann Jackson, Glenn C. Willard, James Barry Willard, Janice Lee Borofka, and Ray Burt Willard, Appellants.
CourtCourt of Appeal of Missouri (US)

Appeal from the Circuit Court, Jackson County, John A. Borron, Jr., J Brian J. Madden, Kansas City, for appellants.

Charles W. German, Kansas City, for respondent Commerce Bank.

Curtis L. Tideman, Overland Park, for respondents Blasdels.

Before JOSEPH M. ELLIS, Chief Judge, HAROLD L. LOWENSTEIN, ROBERT G. ULRICH, PAUL M. SPINDEN, JAMES M. SMART, JR., EDWIN H. SMITH, VICTOR C. HOWARD, THOMAS H. NEWTON, RONALD R. HOLLIGER, LISA WHITE HARDWICK, Judges, and WILLIAM E. TURNAGE, Senior Judge.

JOSEPH M. ELLIS, Judge.

The two adopted adult children of Francis G. Blasdel, Jr. ("the Blasdel adoptees") and the four adopted adult children of Theodore C. Hudson ("the Hudson adoptees") are quarreling with Francis' three natural-born children ("the natural children") over terminating distributions of a very large sum of money from three trusts. After one of the natural children made a demand on the trustee, Commerce Bank, N.A., to deny the Blasdel and Hudson adoptees any distribution whatsoever from any of the three trusts, Commerce Bank filed this declaratory judgment action seeking the circuit court's determination as to their proper construction. The natural children filed a cross-claim against the Blasdel adoptees seeking actual and punitive damages for tortious interference with their inheritance expectancy, and the Blasdel adoptees subsequently counter cross-claimed against the natural children on the same grounds, seeking only actual damages. The circuit court determined that the settlors of the trusts intended to exclude both the Blasdel and Hudson adoptees from the class of "lineal descendants" entitled to take under the terms of the instruments creating the trusts. It also found in favor of the natural children and against the Blasdel adoptees on their respective cross-claims, but awarded the natural children $0 in actual and punitive damages since they presented no evidence on the issue of damages. The Blasdel and Hudson adoptees appeal, assigning four points of error. After briefing and oral argument but before opinion, we ordered the case transferred to this Court en banc for reargument. We reverse in part, affirm in part, and remand with instructions.

The Parties

Francis had three natural children (Barbara Blasdel Alexander, Robert H. Blasdel, and William P. Blasdel) by his first wife before divorcing her in early 1968 and marrying Ann Jackson Blasdel in October 1968. Francis and Ann were still married when he died almost 32 years later, in January 2000. Ann had mothered three children of her own (Thomas J. Flavin, Jr., Patricia A. Jackson, and Deborah P. Durland) during a previous marriage, which also ended in divorce in early 1968. When Ann married Francis, her children ranged in age from 18 to 26 years old. In June 1978, Francis adopted Patricia (then 34) and Deborah (then 27). Francis never adopted Thomas, who died in 1985.

Although he was married twice, Theodore fathered no natural-born children during his lifetime. His first marriage ended in divorce in 1966. In August 1973, he married Beverly Pedersen Hudson, and they remained married until his death in August 1999. Beverly had mothered four children (Ray B. Willard, Glenn C. Willard, James B. Willard, and Janice L. Borofka) during a previous marriage, which terminated in divorce in 1954. When Beverly and Theodore got married, those children ranged in age from 22 to 31. In November 1975, Theodore adopted Ray (then 27) and Glenn (then 25). In June 1978, Theodore adopted James (then 31), and in October 1983, he adopted Janice (then 41).

The Trusts

In March 1949, Gertrude Elizabeth Hudson Jaccard, Adah Hudson Jaccard, Bendena Hudson Blasdel, and Mathilde C. Hudson1 formed an inter vivos trust (the "inter vivos trust"). The trust instrument provided that each of them would receive one-fourth of the trust's net income for the remainder of their lives. It also provided that, upon the death of Gertrude or Adah their shares would be divided equally among and paid to the surviving settlors. The trust further instructed that, when Bendena died, her share was to pass to her son Francis, if then living, "or to his lineal descendants, per stirpes," if not.

Likewise, the trust provided that, when Mathilde died, her share was to pass to her son Theodore, if then living, "or to his lineal descendants, per stirpes," if not. The inter vivos trust instrument also directed that the trust was to terminate when the settlors and their sons had all died. On termination of the trust, its corpus, including all accrued and undistributed income, was to "be divided among and paid in equal shares, per stirpes, to the lineal descendants then living" of Bendena and Mathilde. In the event there were no such lineal descendants at the time the trust was terminated, the corpus was to be "paid over and delivered" to the Jackson County Society for Crippled Children. In the circuit court, the natural children, the Blasdel adoptees, and the Hudson adoptees all claimed under the terms of this trust.

In May 1949, Gertrude executed a will creating "three (3) equal, separate and distinct" testamentary trusts: one for the benefit of Bendena, one for the benefit of Mathilde, and the third for the benefit of Adah. (The assets in these trusts were entirely separate from those involved in the prior inter vivos trust.) The first of these trusts (the "first testamentary trust") provided income to Bendena for the remainder of her life, and then to her son Francis for the remainder of his life. When Francis died, the corpus of this trust was to be divided among and paid over to Francis'"lineal descendants" then living per stirpes if those descendants were at least 30 years old. As modified by codicils executed on April 26, 1954 and January 26, 1955, the trust further provided that should Francis "be not survived by a lineal descendant, or in case all of his lineal descendants shall die after his death and prior to receiving the remainder of this Trust estate as hereinabove provided," the remainder of the trust estate was to "be added to and made a part of THE WALTER M. JACCARD2 MEMORIAL TRUST FUND," which had been created in another part of the will and whose net income was to "be used to pay the hospital and nursing bills for indigent old men" in Saint Luke's Hospital of Kansas City (or its successors), particularly those "worthy indigent old men who are unable to pay for said services themselves and are in real need of hospitalization." In the circuit court, both the natural children and the Blasdel adoptees, all of five of whom meet the age criterion, claimed under the terms of this trust.

The second of these trusts (the "second testamentary trust") had parallel terms. It provided income to Mathilde for the remainder of her life, and then to her son Theodore for the remainder of his life. When Theodore died, the corpus of this trust was to be divided among and paid over to Theodore's "lineal descendants" then living per stirpes if those descendants were at least 30 years old. As modified by codicils executed on April 26, 1954 and January 26, 1955, the trust further provided that should Theodore "be not survived by a lineal descendant, or in case all of his lineal descendants shall die after his death and prior to receiving the remainder of this Trust Estate as hereinabove provided," the remainder of the trust estate was to be added to and made a part of The Walter M. Jaccard Memorial Trust Fund described supra. In the circuit court, only the Hudson adoptees, all four of whom meet the age criterion, claimed under the terms of this trust.3

The last of the trusts (the "third testamentary trust") established in Gertrude's May 1949 will was created for the benefit of her sister Adah. It provided income to Adah for the remainder of her life, and then to her husband Ernest A. Jaccard for the remainder of his life. Upon the deaths of both Adah and Ernest, the trust was to terminate and its remaining assets, including any accrued or undistributed income, were to be "added to and made a part of The Betty Jaccard4 Memorial Trust for Crippled Children," which had originally been established earlier in the will, evidently "to pay the hospital and nursing bills of sick, indigent old women or of sick or crippled children[.]" In the circuit court, none of the parties claimed under the terms of this trust.5 However, as will become apparent post, the existence and particular terms of this trust have significant value in ascertaining Gertrude's testamentary intent.

Mathilde died in 1968, having been predeceased by Adah (in 1954), Gertrude (in 1960), and Bendena (in 1967). Theodore died in August 1999.6 In January 2000, Francis passed away as well, thereby triggering the terminating distribution process under the trusts. This protracted litigation commenced in August, 2000, and has culminated in the instant appeal from the circuit court's final judgment construing the trusts.

The Circuit Court's Judgment

In construing the trusts, the circuit court reached the following legal conclusions: (1) neither of the two Blasdel adoptees are lineal descendants of Francis, who died with only three surviving lineal descendants — the natural children; (2) none of the four Hudson adoptees are lineal descendants of Theodore, who died without any surviving lineal descendents; (3) the natural children "are the sole lineal descendants entitled to distribution of both the Blasdel and Hudson shares of the testamentary trusts and the Gertrude Jaccard et al., inter vivos trust";7 (4) Commerce Bank was entitled to recover the above-mentioned $6,706.43 from...

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