EDWARD J. LADD v. MARY A

Decision Date01 October 2010
Docket NumberNO. 2009-CA-001630-MR,2009-CA-001630-MR
PartiesEDWARD J. LADD, AS DEATH TRUSTEE OF THE LADD LIVING TRUST, DATED JUNE 23, 1997; AND AS EXECUTOR OF THE ESTATE OF JESSE R. LADD, DECEASED APPELLANT v. MARY A. LADD APPELLEE
CourtCourt of Appeals of Kentucky

EDWARD J. LADD, AS DEATH TRUSTEE OF THE LADD LIVING TRUST,
DATED JUNE 23, 1997; AND AS EXECUTOR OF THE ESTATE OF JESSE R. LADD, DECEASED APPELLANT
v.
MARY A. LADD APPELLEE

NO. 2009-CA-001630-MR

Commonwealth of Kentucky
Court of Appeals

OCTOBER 1, 2010


TO BE PUBLISHED

APPEAL FROM MCCRACKEN CIRCUIT COURT
HONORABLE ROBERT J. HINES, JUDGE
ACTION NO. 08-CI-00833

OPINION
AFFIRMING IN PART, REVERSING IN PART, AND REMANDING

BEFORE: MOORE AND WINE, JUDGES; HARRIS, 1 SENIOR JUDGE.

HARRIS, SENIOR JUDGE:

Edward J. Ladd, as death trustee of the Ladd Living Trust, and executor of the estate of Jesse R. Ladd, appeals from a McCracken

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Circuit Court declaratory judgment in favor of the appellee, Mary A. Ladd. After a careful review of the record and briefs and consideration of counsels' oral arguments, we affirm in part, reverse in part, and remand for further proceedings.

On June 23, 1997, four months prior to his marriage to Mary, 2 Jesse created the Ladd Living Trust (the "Trust"). On the same day, Jesse signed his Last Will and Testament (the "Will") and an Assignment and Nominee Agreement (the "Assignment Agreement").

The Trust document stated that Jesse was unmarried and had three children, Jesse J. Ladd, Edward J. Ladd, and David O. Ladd. The Trust further stated that Jesse was assigning all of his presently owned and after-acquired property to the Trust, and provided that upon Jesse's death, all of his assets would be distributed to his children, other than a 1994 Cadillac El Dorado Coupe, which would go to Mary. On the date that he signed the Trust, Jesse conveyed seven parcels of real estate, including his marital residence, from himself, individually, to the Trust. Jesse never expressly transferred or titled his remaining assets, neither assets he presently owned nor assets that he subsequently acquired, to the Trust. No reason was given as to why he failed to do so.

Jesse and Mary were married in October 1997. Mary contributed property and bank accounts to the marriage, and Jesse and Mary titled their bank accounts either jointly or in Jesse's name, rather than in the name of the Trust.

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Moreover, Jesse and Mary paid their marital bills from joint bank accounts that they maintained throughout their marriage.

Thereafter, in August 2005, Jesse amended his Trust to provide that his primary residence, which he had previously deeded into the Trust, would be distributed to Mary upon Jesse's death. Jesse made no other amendments to the Trust.

Jesse died on March 6, 2008, and Edward was appointed executor of Jesse's estate. Edward took the position that all of Jesse's assets belonged to the Trust rather than the estate. As a result, Edward asserted that the assets should be distributed to him and his brothers as death beneficiaries of the Trust, other than the residence addressed in Jesse's only amendment to the Trust.

Mary never expressly relinquished her dower rights before or during the marriage and she filed a renunciation of the Will on May 29, 2008.3Additionally, Mary filed this action seeking a declaratory judgment concerning the Trust, stating that she did not contest the terms of the Trust, but sought a ruling as to whether certain assets belonged in Jesse's estate, where she would be a joint beneficiary, or in the Trust, where Edward and his brothers would be the sole beneficiaries.

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Mary moved for a declaratory judgment on May 21, 2009. Although it appears that a hearing was scheduled for June 9, 2009, no record of a hearing was provided to this Court, and the trial court did not state in its findings of fact that a hearing occurred. On June 23, 2009, the trial court issued findings of fact, conclusions of law, and a judgment in favor of Mary. This judgment became final pursuant to the trial court's order entered on August 10, 2009. Edward subsequently filed for a motion to alter, amend or vacate, which the trial court denied. This appeal followed.

I. THE APPLICABLE STANDARD OF REVIEW

Edward argues that the correct standard of review is the standard applicable to summary judgments, while Mary argues that the correct standard of review is the "clearly erroneous" standard. Kentucky Rules of Civil Procedure (CR) 52.01 provides that "[i]n all actions tried upon the facts without a jury... [f]indings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses." Conclusions of law, however, are reviewed de novo. Baze v. Rees, 217 S.W.3d 207, 209 (Ky. 2006).

Alternatively, summary judgment serves to end litigation before a trial when there is no issue of material fact and the moving party is entitled to summary judgment as a matter of law. CR 56.03. On a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party, and summary judgment should be granted only if it appears impossible that

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the nonmoving party will be able to produce evidence at trial warranting a judgment in its favor. Steelvest, Inc. v. Scansteel Service Ctr., Inc., 807 S.W.2d 476, 480 (Ky. 1991). Summary judgment "is only proper where the movant shows that the adverse party could not prevail under any circumstances." Id. (citing Paintsville Hosp. Co. v. Rose, 683 S.W.2d 255, 256 (Ky. 1985)). The party opposing summary judgment must present "at least some affirmative evidence showing that there is a genuine issue of material fact for trial." Steelvest, 807 S.W.2d at 482.

The standard of review on appeal when a trial court grants a motion for summary judgment is "whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law." Scrifes v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996). Because summary judgment involves only legal questions and the existence of any disputed material issues of fact, "an appellate court need not defer to the trial court's decision and will review the issue de novo." Lewis v. B & R Corp., 56 S.W.3d 432, 436 (Ky. App. 2001).

Edward argues that this Court should use the standard of review applicable to summary judgments because the trial court utilized the summary judgment standard in its findings of fact, conclusions of law, and judgment, and because no bench trial was ever conducted. Summary judgment may be granted in a declaratory judgment action. CR 56.01; Schmidt v. Halpin, 351 S.W.2d 57, 58 (Ky. 1961). Pursuant to CR 56.01, "[a] party seeking to... obtain a declaratory

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judgment may, at any time... move with or without supporting affidavits for a summary judgment in his favor...." (Emphasis added). In cases where a summary judgment has been granted in a declaratory judgment action and no bench trial held, the standard of review for summary judgments is utilized. Godman v. City of Fort Wright, 234 S.W.3d 362, 368 (Ky. App. 2007).

In this case, the trial court recognized that although Mary's motion was styled a "Motion for Declaratory Relief," it was procedurally a motion for summary judgment in the declaratory action. This recognition is evidenced by the trial court's recitation of the summary judgment standard in its findings of fact, conclusions of law, and judgment. Moreover, although Mary argues in her brief that she was seeking a declaration of law and not summary judgment, a Stipulation and Agreed Order, drafted by Mary's counsel and establishing the briefing schedule on Mary's "Motion for Declaratory Relief," identified the pending motion as a motion for summary judgment. Even more tellingly, the record does not reflect that a trial of any sort was held in the matter. We are persuaded that the judgment under review is a summary judgment; accordingly, we review it by analyzing the standard stated above, to wit, whether the trial court correctly found that there were no genuine issues of material fact and that the movant was entitled to judgment as a matter of law, with no deference to the trial court's decision.

II. PROPERTY ALLEGEDLY TRANSFERRED TO THE TRUST AT THE TIME OF ITS CREATION

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Edward argues that the trial court erred in determining that Jesse did not...

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