Gelber v. Glock, Record No. 160500

• Docket Nº: Record No. 160500
• Citation: 800 S.E.2d 800
• Case Date: June 22, 2017
• Court: Supreme Court of Virginia

293 Va. 497
800 S.E.2d 800

Lawrence E. GELBER, Co–Executor of the Estate of Beverly E. Gelber, deceased, and Co–Trustee of the Beverly E. Gelber Trust u/a dated December 1, 2010, as restated and amended, et al.
v.
Meryl Ann GLOCK

Record No. 160500

Supreme Court of Virginia.

June 22, 2017

800 S.E.2d 804

Cullen D. Seltzer (Faith A. Alejandro ; Sands Anderson, on briefs), Richmond, for appellants.

Mark R. Colombell (Hugh T. Antrim ; John P. O'Herron ; ThompsonMcMullan, on brief), Richmond, for appellee.

PRESENT: All the Justices

OPINION BY JUSTICE ELIZABETH A. McCLANAHAN

This case involves the validity of instruments executed by Beverly E. Gelber ("Mrs. Gelber") two months prior to her death and purporting to convey her home and personal property to her daughter, Meryl Glock. Lawrence ("Larry") E. Gelber and Darlene A. Fleischmann, the executors of Mrs. Gelber's estate, who are also her children, contend that Meryl wrongfully induced Mrs. Gelber to execute a deed of gift and bill of sale through undue influence and fraud.¹ They also assert that the bill of sale, executed by Mrs. Gelber in her individual capacity, was of no effect because Mrs. Gelber's personal property was held in trust.

The Executors challenge the circuit court's rulings denying their motion for partial summary judgment on the issue of Mrs. Gelber's execution of the bill of sale in her individual capacity and granting Meryl's motion to strike the Executors' evidence at trial in support of their claims of undue influence, promissory fraud, and civil conspiracy. The Executors also challenge the circuit court's rulings on the exclusion from evidence of Mrs. Gelber's declarations disavowing the property transfers and the exclusion from evidence of records of real estate tax assessments on Mrs. Gelber's home.

Although we conclude that the circuit court did not err in denying the motion for partial summary judgment on the issue of title and possession of Mrs. Gelber's personal property, in excluding records of real estate tax assessments on Mrs. Gelber's home, and in granting the motion to strike the Executors' evidence on the civil conspiracy claims, we hold that the circuit court committed error in excluding from evidence the declarations made by Mrs. Gelber disavowing the property transfers and in granting the motion to strike the Executors' evidence on their claims for undue influence and promissory fraud.

I. BACKGROUND

On December 1, 2010, Mrs. Gelber executed several estate planning documents, including a will and trust agreement. The 2010 will revoked any other wills, which included a previous will that had been executed by Mrs. Gelber in 2009, and gave Mrs. Gelber's real and personal property to her trustee under the 2010 trust agreement. The 2010 trust agreement named Mrs. Gelber as the trustee and amended a trust agreement previously executed by her in 2009. The 2010 trust agreement directed that upon Mrs. Gelber's death, the successor trustee distribute her assets in equal shares to her children. Mrs. Gelber also executed a tangible personal property deed by which she conveyed all of her tangible personal property to herself as trustee.

On July 18, 2014, while Mrs. Gelber was an inpatient at St. Mary's Hospital in Richmond, she executed a deed of gift in which she conveyed her home on Edwardsville Drive in Glen Allen to Meryl, one of her five children. On that same date, Mrs. Gelber executed a bill of sale in which she conveyed to Meryl all items of her personal property located at her home.² Mrs. Gelber, who was 87 years old at the time and suffering from terminal cancer, later made statements, both orally and by signed typewritten declaration, in which she disavowed the property transfers. More specifically, Mrs. Gelber stated that she did not intend to make the transfers, had no recollection of the execution of the documents, was in a weakened mental, physical, and emotional condition when she executed the documents, and did so upon undue influence and misrepresentations made to her by Meryl.

On August 19, 2014, Mrs. Gelber, individually, by and through her attorneys-in-fact, Larry and Darlene, filed a complaint against

800 S.E.2d 805

Meryl alleging undue influence and fraud in connection with Mrs. Gelber's execution of the deed of gift and bill of sale.³ After Mrs. Gelber died on September 19, 2014, Larry and Darlene were substituted as plaintiffs in their capacities as executors of Mrs. Gelber's estate and trustees of her trust. Subsequently, the Executors added a count alleging a civil conspiracy between Meryl and her sister and brother-in-law, Linda and Philip Landa, though Meryl remained the sole defendant.

Meryl filed a counterclaim asserting breaches of contract, statutory warranty, and express warranty against the Executors and seeking damages and attorney's fees incurred in defending the claims made by Larry and Darlene in their capacities as trustees of Mrs. Gelber's trust.

Prior to trial, the Executors filed a motion for partial summary judgment as to title and possession of the personal property on the grounds that the bill of sale was signed by Mrs. Gelber in her individual capacity and was of no effect since the personal property had been conveyed in 2010 to Mrs. Gelber in her capacity as trustee. Also prior to trial, Meryl filed a motion in limine seeking to exclude evidence of Mrs. Gelber's declarations not contemporaneous with the execution of the deed of gift and bill of sale to establish the substantive fact of undue influence. The circuit court denied both motions and the parties proceeded to trial.⁴

During trial, the circuit court excluded from evidence tax assessment records on Mrs. Gelber's home that the Executors sought to introduce to prove the home's value. After the Executors presented their evidence, the circuit court granted Meryl's motion to strike the Executors' evidence as to all claims. In granting the motion to strike, the circuit court ruled that declarations made by Mrs. Gelber disavowing the property transfers were not admissible and would not be considered in determining whether the Executors had met their burden of proof. At a separate hearing, the circuit court entered judgment for Meryl on her claim for attorney's fees.⁵

II. DENIAL OF MOTION FOR PARTIAL SUMMARY JUDGMENT AS TO PERSONAL PROPERTY

The Executors argue that the circuit court erred in denying their motion for partial summary judgment as to title and possession of Mrs. Gelber's personal property. They contend that the bill of sale failed to transfer title over the personal property, as a matter of law, because Mrs. Gelber signed the bill of sale in her individual capacity without referencing her capacity as trustee. We disagree with the Executors that they were entitled to partial summary judgment on this ground. Mrs. Gelber retained the power to revoke prior conveyances to her trust and was, therefore, empowered to withdraw the property from the trust upon substantial compliance with the provisions of the trust agreement, which required only written notice to herself as trustee.

Mrs. Gelber was the sole settlor,⁶ trustee, and lifetime beneficiary of her trust under the provisions of the 2010 trust agreement. Although Mrs. Gelber maintained the right to designate a successor trustee to serve upon her resignation, incapacity, or death, and named therein certain individuals to serve as trustees should she fail to designate a successor trustee, Mrs. Gelber remained the sole trustee at the time the bill of sale was executed by her. The trust agreement provided that "my Trustee shall distribute principal from the trust as I may direct." The trust agreement also expressly reserved to Mrs. Gelber "the right to revoke or amend this agreement by a writing (other than a will) signed by me and delivered to my Trustee during my lifetime." Therefore, as the settlor, trustee, and lifetime beneficiary, Mrs. Gelber maintained control over the property she placed in trust under the 2010 revocable

800 S.E.2d 806

trust agreement. See Murnan v. Stewart Title Guar. Co. , 585 F.Supp.2d 825, 834 (E.D. Va. 2008), vacated in part on other grounds , 607 F.Supp.2d 745 (E.D. Va. 2009) ("[A] grantor who retains the sole discretionary power to revoke the trust owns the right to eliminate the trust and thereby own the trust property outright any time she chooses to do so.").

Furthermore, Mrs. Gelber possessed the power to amend or revoke the trust upon substantial compliance with the provisions of the trust agreement. See Code § 64.2–751(C)(1) ("The settlor may revoke or amend a revocable trust ... [b]y substantial compliance with a method provided in the terms of the trust."). See also Austin v. City of Alexandria , 265 Va. 89, 95, 574 S.E.2d 289, 292 (2003) (when a trust is revocable, the settlor retains the right to withdraw property from the trust in accordance with the terms specified by the trust agreement). The only requirement imposed upon Mrs. Gelber for exercising her rights under the 2010 trust agreement was "a writing ... signed by me and delivered to my Trustee during my lifetime."

We have previously recognized that where the settlor of a revocable trust is also the trustee, a requirement of written notice to the trustee of the settlor's intention...