In re Jacobs
| Decision Date | 06 July 2021 |
| Docket Number | ED 109026 |
| Parties | In the ESTATE OF: Shawn Edward JACOBS, Deceased |
| Court | Missouri Court of Appeals |
Peter P. Fiore, Jr., Bret M. Rich, Cohen, Stone, Rich & Fiore, Bret M. Rich 904 S. 4th Street, Suite 302, St. Louis, MO 63102, for appellants.
Paul J. Puricelli, Stone, Leyton & Gershman, 7733 Forsyth Blvd., Suite 500, Clayton, MO 63105, for respondents.
Chad G. Jacobs, Derek T. Jacobs, and Trisha H. Jacobs (Beneficiaries) appeal from the judgment of the Circuit Court of St. Louis County's Probate Division finding in favor of Respondent Stone & Alter Real Estate Company (Stone) on its Petition for Accounting in the amount of $495,088.95. We affirm.
Shawn E. Jacobs (Decedent) was a principal owner of Cicero's, Inc. (Cicero's), a Missouri corporation that owned Cicero's, a well-known St. Louis-area restaurant. On August 23, 1996, Stone entered into a commercial lease with Cicero's. At the time the lease was executed, Decedent and his wife, Alice Jacobs (Mrs. Jacobs), also signed a Guarantee of Lease (Guarantee), personally guaranteeing Cicero's performance of the lease. This Guarantee was ratified by Decedent at the same time as various amendments to the lease, with the most recent being January 1, 2015.
On October 29, 2003, Decedent created the Shawn E. Jacobs Living Trust (Jacobs Trust). Decedent was the sole grantor of the trust. Decedent and his wife were co-trustees, and their three children Chad, Derek, and Trisha were the beneficiaries. The Jacobs Trust provides in relevant part:
[Article III] A. Income and Principal . During the [Decedent's] lifetime, the Trustee shall pay so much or all of the income and principal of the Trust Estate to the [Decedent] or otherwise as the [Decedent] directs.
On January 22, 2012, Mrs. Jacobs passed away. Under the terms of the Jacobs Trust, Neil Packman (Trustee), who had been Decedent's accountant for 30 years, became the successor co-trustee. On June 10, 2016, Decedent passed away. For the remainder of 2016, Beneficiaries directed Trustee to transfer a total of $106,000 from the Jacobs Trust to support Cicero's.
On April 6, 2017, Trustee published a "Notice to Creditors by Trustee," which required claimants to present their claims to Trustee regarding debts owed by Decedent within the following six months pursuant to Section 456.5-505.5.1 Also on April 6, 2017, Stone filed a Petition to Require Administration of Decedent's probate estate pursuant to Section 473.020. Stone's petition included its claim, along with an affidavit describing the claim against Decedent's estate for his personal guaranty of Cicero's lease. The next day, on April 7, the claim was communicated to the Trustee when the Personal Representative appointed in Stone's probate case, Peter C. Palumbo III (Personal Representative), called Trustee and advised him of the claim in the pending probate case.
On June 1, 2017, Cicero's defaulted on its lease. On June 6, 2017, the Personal Representative sent Trustee a letter by both email and regular mail notifying Trustee of Stone's claim against Decedent's estate, which included the Petition to Require Administration filed on April 6, the accompanying affidavit describing the claim, and a document stating Stone's claim amounted to somewhere between $459,328.10 and $1,621,158.00, plus attorney's fees. However, on June 23, 2017, Trustee distributed $165,800 to each of the Beneficiaries (Disputed Transfers), amounting to a total of $497,400, thereby depleting all the assets held in the Jacobs Trust. On September 5, 2017, Stone made a written demand on the Personal Representative to institute an action for accounting to recover from Beneficiaries the Disputed Transfers.
Since Trustee transferred the assets from the Jacobs Trust rather than pay Stone's claim, Stone had no choice but to initiate litigation. On November 22, 2017, Stone filed a Petition for Accounting under Section 461.300, seeking a judgment ordering Beneficiaries to return their pro rata share of the Disputed Transfers to Decedent's estate. Beneficiaries filed a motion to dismiss, arguing Section 456.5-505.5's publication provision barred Stone's claims. The trial court denied the motion to dismiss because it found that within Section 456.5-505.5's six-month period following Trustee's publication of notice to creditors, which ran from April 6, 2017, to October 6, 2017, Stone presented the claims to Trustee three different times.2
On March 13, 2020, the trial court entered its Order and Judgment requiring Beneficiaries to each pay $165,029.65 to Decedent's estate. Specifically, the trial court found: (1) Stone is a qualified claimant under Section 461.300.10(3); (2) immediately prior to his death, Decedent held a power of withdrawal over the Jacobs Trust income and principal, making the Jacobs Trust property subject to the claims of his creditors; therefore, the Disputed Transfers are recoverable transfers under Section 461.300.10(4); and (3) the assets of Decedent's probate estate are inadequate to pay the estate's debts.
This appeal follows.
Beneficiaries raise two points on appeal. First, they argue the trial court erred in denying their motion to dismiss and motion for directed verdict because Section 456.5-505.5 barred Stone's claim in that it was not "presented" to Trustee during the six-month period following Trustee's publication of notice to Decedent's creditors. Second, they assert the trial court erred because the Jacobs Trust was "subject to the protections against creditor's claims pursuant to [Section] 456.5-504 and [Section] 456.505."
Generally, the appellate court will affirm the judgment of the trial court unless there is no substantial evidence to support it, it is against the weight of the evidence, it erroneously declares the law, or it erroneously applies the law. In re Estate of Jones , 280 S.W.3d 647, 650 (Mo. App. W.D. 2009) (citing Murphy v. Carron , 536 S.W.2d 30, 32 (Mo. banc 1976) ). However, because statutory construction is a question of law, the appellate court's review is de novo , and it gives no deference to the trial court's determination of law. Id. (citing Mo. Highway & Transp. Comm'n v. Merritt , 204 S.W.3d 278, 281 (Mo. App. E.D. 2006) ).
Beneficiaries argue the trial court erred in denying their motion to dismiss and motion for directed verdict because Section 456.5-505.5 barred Stone's claim against Trustee and the Jacobs Trust property. They assert Stone did not "present" its claim to Trustee within the six-month period because Stone did not file its Petition for Accounting within that time.
The issue is whether Stone timely "presented" its claim to Trustee within the meaning of Section 456.5-505.5. To determine the meaning of Section 456.5-505.5, we turn to statutory interpretation.
The rules of statutory interpretation are not intended to be applied haphazardly or indiscriminately to achieve a desired result. Instead, the canons of statutory interpretation are considerations made in a genuine effort to determine what the legislature intended. This Court's primary rule of statutory interpretation is to give effect to legislative intent as reflected in the plain language of the statute at issue.
Parktown Imports, Inc. v. Audi of Am., Inc. , 278 S.W.3d 670, 672 (Mo. banc 2009).
Generally, Section 456.5-505 determines when trust assets are subject to claims by the settlor's creditors. Section 456.5-505.53 allows a trustee to publish notice in a newspaper informing creditors of the deceased settlor to present the decedent's debts to the trustee within six months of the date of the first publication of notice or be forever barred. The definitions applicable to Section 456.5-505 are found in Section 456.1-103, which does not define "present" or "claim of creditor." We have not found any cases interpreting the word "present" in the context of Section 456.5-505.5.
Beneficiaries argue Stone "presented" its claim only when it filed the Petition for Accounting on November 22, 2017, which was outside of Section 456.5-505.5's six-month period. Beneficiaries assert that Stone's sole avenue for recovering from assets in the Jacobs Trust was to file an action for accounting within the six-month period. However, this argument fails to recognize that Stone's action for accounting only became necessary when Trustee ignored Stone's multiple communications regarding its claim and subsequently disbursed the trust assets. If Trustee had simply responded to Stone's claim, this litigation would not have been necessary. Accordingly, Stone was not required to file an action for accounting in order to properly present its claim to Trustee under Section 456.5-505.5.
Beneficiaries further argue that Section 456.975 supplies the relevant definition of a "claim of creditor," which defines how to "present" a claim to a trustee. However, this argument fails for two reasons. First, the plain language of Section 456.975 states that its definitions apply to Sections 456.970 to 456.1135. Second, Section 456.1120 provides, "Section 456.970 to 456.1135 shall not limit the ability of a creditor or other claimant to reach a beneficial interest as otherwise provided in sections 456.5-501 to 456.5-507. " (emphasis added). Thus, Section 456.975 provides no assistance to determine the meaning of "present" as used in Section 456.5-505.5.
In the absence of statutory definitions, we may rely on dictionary definitions to ascertain the meaning of the language used therein. Invs. All., LLC v. Bordeaux , 428 S.W.3d 693, 696 (Mo. App. E.D. 2014) (citing Gash v. Lafayette Cnty., 245 S.W.3d 229, 232 (Mo. banc 2008) ). Therefore, we turn to the dictionary to define the plain meaning of "present." Interestingly, Black's Law Dictionary (11th ed. 2019), does not define the verb "pr...
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