Gene Kauffman Scholarship Found. v. Payne

• Decision Date: 14 February 2006
• Docket Number: No. WD 65549.,WD 65549.
• Parties: GENE KAUFFMAN SCHOLARSHIP FOUNDATION, INC., Respondent, v. Mark PAYNE and Mark Payne as next friend of Samantha M. Payne; Appellant Pro Se. Jeremiah W. (Jay) Nixon, Attorney General for The State of Missouri, Respondent.
• Court: Missouri Court of Appeals

183 S.W.3d 620

GENE KAUFFMAN SCHOLARSHIP FOUNDATION, INC., Respondent, v. Mark PAYNE and Mark Payne as next friend of Samantha M. Payne; Appellant Pro Se.

Jeremiah W. (Jay) Nixon, Attorney General for The State of Missouri, Respondent.

No. WD 65549.

Missouri Court of Appeals, Western District.

February 14, 2006.

Mark Payne, Princeton, pro se.

Lloyd A. Cleaveland, Chillicothe, Counsel, Allison M. Murdock, Kansas City, Elizabeth J. Gray, St. Louis, Co-Counsels for Kauffman.

Robert L. Ortbals, Jr., Jefferson City, Counsel for Nixon.

Before: ROBERT G. ULRICH, P.J., PATRICIA A. BRECKENRIDGE and JOSEPH M. ELLIS, JJ.

ROBERT G. ULRICH, Presiding Judge.

Gene Kauffman Scholarship Foundation, Inc. (the Foundation), a Missouri not for Profit Corporation, filed its "Petition for Declaratory Judgment and Trust Construction" in the Probate Division on November 18, 2004, seeking the court's construction of the Edward E. Kauffman Revocable Trust (Revocable Trust), as amended, and the Gene Kauffman Scholarship Foundation Trust (Foundation Trust). Both trusts had been registered in the Probate Division. Specifically, the Foundation sought concurrence by the court of the Foundation's definition and application of the term "high school graduate," a term used within the revocable trust to limit recipients of the trust benefits. Jeremiah W. Nixon, the Attorney General, was named in his official capacity as the sole defendant because of the assertion that the trusts are charitable. Mark A. Payne, as next friend of Samantha M. Payne, filed his motion to intervene, asserting that the Foundation's definition of the term errantly had excluded Samantha as a beneficiary and that the Foundation had wrongly denied her benefits of the trust. Both the Foundation and the Attorney General opposed Mr. Payne's motion to intervene. While Mr. Payne's motion was pending, the Attorney General consented to the entry of a judgment and order granting the relief prayed by the Foundation, and the court entered the consent judgment, which included the denial of Mr. Payne's Petition for Intervention. Mr. Payne appealed both the denial of his Petition to Intervene and the consent judgment.

Facts

The facts are not disputed. On July 17, 1990, Edward E. (Gene) Kauffman created the Edward E. Kauffman Revocable Trust, as amended by Amendment to Revocable Trust Agreement dated July 22, 1991, and Second Amendment to Revocable Trust Agreement dated May 18, 1992. Gene Kauffman died on October 28, 1997. The Kauffman Revocable Trust was filed in the Livingston County Court, Probate Division on October 7, 1998, and was recorded on December 10, 1998, in accordance with section 456.410 RSMo. The Foundation Trust, dated November 3, 1998, is a charitable trust established in accordance with subparagraph E of paragraph SIXTH of the Kauffman Revocable Trust, which states:

My SUCCESSOR TRUSTEE shall establish with the remainder of this trust estate a not-for-profit corporation to be entitled "GENE KAUFFMAN SCHOLARSHIP FOUNDATION, INC." which shall provide financial assistance toward college and university expenses for needy, unmarried, non-smoking female high school graduates of Mercer County, Missouri, to help them pursue their higher education. Said Scholarship Fund shall be administered by a scholarship committee consisting of at least five civic-minded persons who must be landowners and legal residents of Mercer County, Missouri. However, the principals of each high school in Mercer County, Missouri shall be members of such committee. * * * Said committee shall adopt reasonable rules and guidelines not inconsistent with the provisions hereof ... (Emphasis added)

The third paragraph of the Foundation Trust states:

Purpose of Trust. This trust is created and shall be operated exclusively to make grants to Gene Kauffman Scholarship Foundation, Inc., to enable Gene Kauffman Scholarship Foundation, Inc. to satisfy its charitable and educational purpose of providing financial assistance toward college or university expenses for needy, unmarried, non-smoking, female, high school graduates of Mercer County, Missouri, to help them pursue their higher education All of the remaining assets of the Revocable Trust were transferred to the Foundation Trust, and the Revocable Trust was terminated on December 31, 2003. The Foundation Trust was filed with the Circuit Court of Livingston County, Probate Division on September 3, 2004, in accordance with section 456.410 RSMo.

The scholarship committee, on behalf of the Foundation Trust, established the rule that the term "high school graduate" as used in subparagraph E of paragraph SIXTH of the Revocable Trust, as amended, does not include persons who are, or have been home schooled, or persons who have received general equivalency diplomas. "Home schooled," the committee determined, means persons who were home schooled and who did not attend at least two years of high school in Mercer County Schools, with at least one of the two years being the senior year.

Samantha M. Payne applied to the Foundation Trust for a scholarship on or about May 18, 2004. The Foundation denied her a scholarship on August 27, 2004, solely because she was home schooled. That she met all other scholarship eligibility criteria as set forth by the Revocable Trust except that the Foundation claimed that she was not a high school graduate as defined by its definition is not disputed. Except for the issue of what constitutes a high school graduate within the meaning of the Foundation Trust, Samantha is the only applicant ever to have met all scholarship eligibility criteria, and been denied a scholarship.

The Foundation Trust filed its "Petition for Declaratory Judgment and Trust Construction" on September 10, 2004, requesting that the court declare and construe that the provisions of the Revocable Trust and the Trust Agreement of Foundation Trust, dated November 3, 1998, exclude persons who were home schooled and who did not attend at least two years of high school in Mercer County Schools, with at least one of the two years being the senior year of high school, and exclude persons who have obtained general equivalency diplomas (GED) from the definition of the term "high school graduates" contained within the Trust. The Attorney General was considered a necessary party and named Defendant.

Mr. Payne filed his Petition for Intervention as next friend for his daughter Samantha. The Attorney General and the Foundation opposed Mr. Payne's Petition for Intervention on the basis that he lacked standing because (1) he had not been appointed as his daughter's next friend as required by Rule 52.02, and (2) neither he nor his daughter had an identifiable interest in any of the proceeds of the Foundation Trust, and, alternatively, any interest that they may have is adequately protected by the Attorney General. The court appointed Mr. Payne as his daughter's next friend.

The Attorney General served written discovery on the Foundation and, after receiving verified response, filed Consent to Judgment. The court issued its Judgment and Order on May 6, 2005, denying Mr. Payne's petition to intervene, stating that "the interests of the parties are adequately represented by the Attorney General of the State of Missouri and, therefore, the Court finds that Mark A. Payne and Samantha M. Payne have no standing herein and their request to intervene in this action is denied." The court further ordered that the provisions of the Foundation Trust be construed to "exclude persons who were home schooled and who did not attend at least two years of high school in Mercer County Schools, with at least one of the two years being the senior year and persons who have obtained general equivalency diplomas from the definition of the term `high school graduates'." This appeal was then filed.

Points on Appeal

Mr. Payne, as next friend for his daughter Samantha, asserts two points on appeal. His first point asserts that the trial court erred in denying his intervention for lack of standing because he offered sufficient evidence to identify his daughter as an individual with a "special interest" in that she belongs to a small class of identifiable beneficiaries and is a person who is "certain to receive trust benefits." In his second point, Mr. Payne asserts that the court erred in its order declaring and construing the provisions of the Revocable Trust to exclude persons who were home schooled and persons who have obtained general equivalency diplomas from the definition of the term "high school graduates" contained therein because he offered sufficient evidence to show that the term "high school graduates" does not exclude home schooled individuals. The first point is dispositive.

Standing to Sue

Mr. Payne's first point charges that the trial court erred in denying his motion to intervene and its declaration that his daughter had no standing to sue. He claims that he evinced his daughter's "special interest," which qualifies her as a proper party to enforce the provisions of the Foundation Trust.

Standard of Review

"Denial of a motion for leave to intervene as a matter or right under Rule 52.12 will be affirmed by an appellate court unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law." In re Liquidation of Prof'l Med. Ins. Co., 92 S.W.3d 775, 778 (Mo. banc 2003)(quoting State ex rel. Nixon v. Am. Tobacco Co., 34 S.W.3d 122, 126 (Mo. banc 2000); Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976)).

Discussion

The parties agree that the Foundation Trust is a charitable trust. Mr. Payne claims in his first point to have offered sufficient evidence to demonstrate that his daughter has standing to intervene in that he showed that his daughter has a "special interest" in the Foundation Trust because she belongs to a small class of identifiable beneficiaries and, as an identifiable...