Connary v. Shea

• Court: Maine Supreme Court
• Writing for the Court: STANFILL, C.J.
• Citation: 320 A.3d 429
• Docket Number: Docket: Cum-23-74
• Decision Date: 06 August 2024
• Parties: Robert L. CONNARY et al. v. Richard A. SHEA et al.
• topic: Contracts,Trust Law,Civil Procedure

320 A.3d 429

2024 ME 57

Robert L. CONNARY et al.

v.Richard A. SHEA et al.

Docket: Cum-23-74

Supreme Judicial Court of Maine.

Argued: September 13, 2023

Decided: August 6, 2024

Jeremy W. Dean, Esq. (orally), Portland, for appellants Robert L. Connary et al.

Daniel A. Nuzzi, Esq. (orally), and Eammon R.C. Hart, Esq., Brann & Isaacson, Lewiston, for appellees Richard A. Shea et al.

Panel: STANFILL, C.J., and MEAD, HORTON, CONNORS, LAWRENCE, and DOUGLAS, JJ.^*

STANFILL, C.J.

[¶1] For the second time, the Connary heirs ¹ appeal from a summary judgment entered by the Superior Court (Cumberland County, O’Neil, J.) in favor of the Shea brothers on Connary’s claim for reformation of the Shea Family Living Trust. In the proceedings leading to the first appeal, the court (Stewart, J.) concluded that the Trust’s legacy to Connary of stock in a bank was a specific devise that had adeemed when the bank recalled and redeemed the stock, meaning that the stock was no longer part of the Trust and Connary was not entitled to a distribution of money to account for the stock’s value. Connary v. Shea, 2021 ME 44, ¶¶ 8-9, 259 A.3d 118. We affirmed the court’s interpretation of the Trust, but we remanded the matter for the parties to litigate Connary’s reformation claim. Id. ¶¶ 25, 29-30; see 18-B M.R.S. § 415 (2024). On remand, the court (O'Neil, J.) granted Shea’s motion for summary judgment on the ground that Connary had not marshaled any admissible evidence generating a genuine dispute of fact as to the elements of the reformation claim. Connary argues that the court erred in determining that the evidence Connary proferred in support of the reformation claim was inadmissible and urges us to conclude that, considering that evidence, a genuine dispute of material fact exists for trial. We conclude that Connary’s reformation claim cannot survive summary judgment even if he is correct that the disputed evidence may be considered, and we therefore affirm the judgment.

I. BACKGROUND

[¶2] In our opinion deciding Connary’s first appeal, we described the following relevant facts as revealed by the summary judgment record viewed in the light most favorable to the nonprevailing party, Connary. Connary, 2021 ME 44, ¶¶ 1-6, 259 A.3d 118; see, e.g., Kurtz & Perry, P.A. v. Emerson, 2010 ME 107, ¶ 15, 8 A.3d 677. In July 2003, William and Patricia Shea established the Shea Family Living Trust; they funded it, in part, with stock in a private, New-Hampshire-based bank and stock in General Electric. Connary, 2021 ME 44, ¶¶ 1, 4, 259 A.3d 118. The Trust’s distribution plan included a provision that, upon the death of the survivor of William and Patricia, a successor trustee was to "take charge of the assets then remaining in" the Trust, pay the debts of the survivor and of the Trust, distribute the bank and General Electric stock to the Connary heirs (Patricia’s nieces and nephews), and distribute all of the remaining "net proceeds of the trust" to the Shea brothers (William’s children). Id. ¶¶ 4, 18 n.10.

[¶3] William died in 2006. Id. ¶ 5. That same year, the bank recalled and redeemed its stock, and the Trust received approximately $460,000. Id. During the twelve years that followed, these funds were commingled with other funds in the Trust’s investment accounts. Id. After Patricia died in 2018, the successor trustee determined that the bank stock was no longer part of the Trust and informed Connary that he could not distribute any money to Connary in lieu of the bank stock.² Id. ¶ 6.

[¶4] In October 2019, Connary filed the operative nine-count second amended complaint against Shea and the Trust.³ In what were styled as parts "(A)" and "(B)" of Count 2, Connary requested a declaratory judgment stating that the Trust unambiguously provided to him "the ‘[p]roceeds’ from the involuntary redemption and sale of’ the bank stock or, if the Trust was ambiguous, that Patricia "intended to gift any proceeds" from the redemption of the bank stock to him. In part "(C)" of Count 2, Connary asked the court to reform the Trust to "conform to [Patricia’s] intentions" that "[t]he proceeds [were] to be distributed" to him.

[¶5] The parties filed cross-motions for summary judgment on Count 2. Id. ¶ 8.

Connary argued that the Trust’s provision relating to the bank stock was a general devise that entitled him to proceeds from the 2006 redemption, and Shea argued that the provision was a specific devise that had adeemed when the redemption occurred. Id. ¶¶ 8, 26. The court (Stewart, J.) agreed with Shea and granted his motion for summary judgment. Id. ¶¶ 9, 28. Although the parties had not addressed Count 2(C), Connary’s claim for reformation, the court "denied and dismissed" that claim, later stating that it had entered a summary judgment on Count 2 as a whole based on its conclusion that the Trust’s distribution plan plainly provided for a specific devise of the bank stock. Id. ¶¶ 8-9, 26-28 (quotation marks omitted).

[¶6] Connary appealed,⁴ and we affirmed the judgment as to Counts 2(A) and 2(B), agreeing with the trial court that the Trust language "reflect[ed] a plain and clear intent by William and Patricia to create a specific gift" of the bank stock to Connary and that the stock had adeemed because no shares remained in the Trust at the time of Patricia’s death. Id. ¶¶ 13-21, 25 (quotation marks omitted). Turning to Connary’s reformation claim as reflected in Count 2(C) of the complaint, however, we observed that this interpretation of the Trust document did not necessarily preclude a viable claim for reformation. Id. ¶ 29; see 18-B M.R.S. § 415 ("The court may reform the terms of a trust, even if unambiguous, to conform the terms to the settlor’s intention if it is proved by clear and convincing evidence that both the settlor’s intent and the terms of the trust were affected by a mistake of fact or law, whether in expression or inducement." (emphasis added)). Because "facts extrinsic to the Trust" might "demonstrate a mistake of fact or law necessitating reformation" and the parties had not specifically litigated the reformation claim as part of the summary judgment proceedings, we vacated that portion of the judgment and remanded the matter for further proceedings on the reformation claim. Connary, 2021 ME 44, ¶¶ 29-30, 259 A.3d 118.

[¶7] On remand, Shea moved for summary judgment on the reformation claim. See M.R. Civ. P. 56. Connary opposed the motion and filed a statement of additional material facts that he contended raised a disputed issue for trial. See M.R. Civ. P. 56(h)(2). That filing included (1) statements that Patricia had, in 2016 and 2018, indicated to various family members that she intended for Connary to receive "Uncle Pete’s money," an apparent reference to the bank and General Electric stock; and (2) statements that the attorney who drafted the Trust document for Patricia and William did not question Patricia about her intent in the event that the bank stock no longer existed in the Trust at the time of her death. Shea objected to and qualified many of these statements, arguing that the evidence cited was inadmissible and, in any event, did not support the statements. See M.R. Civ. P. 56(e), (h)(2), (4).

[¶8] In January 2023, the trial court (O’Neil, J.) held a hearing on the summary judgment motion, during which Connary acknowledged that the alleged oral declarations by Patricia to family members were "the only evidence of her intent other than the four corners of the [Trust] document." Shea again argued that evidence of the oral declarations was inadmissible and that Connary had therefore failed to raise a genuine fact issue for trial on his reformation claim. After the hearing, the trial court issued a written order granting Shea’s motion. Citing Estate of Utterback, 521 A.2d 1184, 1187-88 (Me. 1987), the court concluded that it could not consider the evidence of Patricia’s statements of intent and that Connary had not presented any other evidence generating a genuine dispute of fact material to his reformation claim. Connary appealed.

II. DISCUSSION

[1–5] [¶9] Connary argues that the statements by Patricia and the drafting attorney were admissible and, taken together, generate a genuine dispute of fact material to their claim that Patricia was mistaken about the meaning of the Trust’s language. We review a trial court’s grant of a motion for summary judgment de novo, viewing the properly supported facts in the summary judgment record in the light most favorable to the nonprevailing party to determine whether a genuine issue of material fact exists.⁵ See Day's Auto Body, Inc. v. Town of Medway, 2016 ME 121, ¶ 6, 145 A.3d 1030; see M.R. Civ. P. 56(c). "A defendant who is the moving party has the initial burden to establish that there is no genuine dispute of fact and that the undisputed facts would entitle the defendant to judgment as a matter of law at trial. The nonmoving plaintiff must then demonstrate that material facts are disputed and must make out a prima facie case for its claim." Oceanic Inn, Inc. v. Sloan's Cove, LLC, 2016 ME 34, ¶ 26, 133 A.3d 1021 (citation, alteration, and quotation marks omitted). "[A] party’s assertion of material facts must be supported by record references to evidence that is of a quality that would be admissible at trial." HSBC Mortg. Servs., Inc. v. Murphy, 2011 ME 59, ¶ 9, 19 A.3d 815; see M.R. Civ. P. 56(e), (h)(4).

[6] [¶10] The substantive elements of a claim for reformation of a trust are set forth in 18-B M.R.S. § 415:

The court may reform the terms of a trust, even if unambiguous, to conform the terms to the settlor’s intention if it is proved by clear and convincing evidence that both the settlor’s intent and the terms of the trust were affected by a mistake of fact or law, whether in expression or inducement.

The statute became effective in July 2005 when the Maine Uniform Trust Code took effect. 18-B M.R.S. § 1103 (2024); P.L. 2003, ch. 618, §§ A-1, A-2. Prior to that enactment, our common...