In re Lock Revocable Living Trust

• Decision Date: 09 December 2005
• Docket Number: No. 25214.,25214.
• Citation: 123 P.3d 1241,109 Hawai`i 146
• Parties: In the Matter of the Annie Quon Ann LOCK REVOCABLE LIVING TRUST.
• Court: Hawaii Supreme Court

123 P.3d 1241

109 Hawai`i 146

In the Matter of the Annie Quon Ann LOCK REVOCABLE LIVING TRUST.

No. 25214.

Supreme Court of Hawai`i.

December 9, 2005.

James E.T. Koshiba, Neal K. Aoki, and Keith K. Hayashi (of Koshiba Agena & Kubota), on the briefs, Honolulu, for beneficiaries-appellants Katie Lock Tamashiro, Philia Lau, Jacalyn Lock, Ranceford Lock, Gaylynne Sakuda, Natalie Urata, Verna Ching, and Carol Lock.

Patrick Y. Taomae, on the briefs, Honolulu, for petitioner-appellee Lena L. Wong in her capacity as successor trustee.

Gaylord G. Tom, on the briefs, for beneficiaries-appellee Lena L. Wong and Wah Tim Loc.

MOON, C.J., LEVINSON, NAKAYAMA, and DUFFY, JJ.; and Circuit Judge NAKAMURA, in Place of ACOBA, J., Recused, Concurring Separately.

Opinion of the Court by MOON, C.J.

Beneficiaries-appellants Katie Lock Tamashiro, Philia Lau, Jacalyn Lock, Ranceford Lock, Gaylynne Sakuda, Natalie Urata, Verna Cancino, and Carol Lock hereinafter, collectively, Appellants appeal from the First Circuit Court's¹ July 2, 2002 final judgment granting the Petition of Successor Trustee for Determination of Beneficiaries and Distribution of Estate (the petition). The trial court essentially adopted petitioner-appellee Lena L. Wong's (Lena Wong's) interpretation of the Annie Quon Ann Lock (Annie Lock) Revocable Living Trust Agreement (the Trust) as mandating distribution of the Trust assets in equal shares to Annie Lock's two surviving siblings, beneficiaries-appellees Lena Wong² and Wah Tim Lock.

On appeal, Appellants challenge the trial court's July 2, 2002 findings of fact (FOFs), conclusions of law (COLs), and order granting the petition. Appellants essentially contend that the plain and unambiguous language of the Trust dictates a per stirpes distribution, discussed infra, and, thus, the trial court erred in (1) concluding that the language of the Trust was ambiguous and (2) considering extrinsic evidence of Annie Lock's intent. For the reasons discussed below, we hold that Appellants' contentions lack merit. Accordingly, we affirm the trial court's final judgment.

I. BACKGROUND

On March 22, 1993, Annie Lock, as settlor and trustee, executed the Trust, wherein all her assets are now held. At the time, Annie Lock's parents were deceased, and, of Annie Lock's eight siblings, three were deceased.

Article IV of the Trust provides in pertinent part:

A. As of the date of my death, ... the trustee shall distribute the remaining trust principal (including property to which the trustee may be entitled under my will or from any other source), per stirpes, to my then living brothers and sisters in equal shares. In the event that any of said foregoing persons shall fail to survive me, and shall leave a descendant or descendants living at the time of my death, such descendants shall represent their ancestors and take such ancestor's share, per stirpes, otherwise the share of such decedent shall drop out, thereby increasing the share of the others of said foregoing persons or their descendants, as the case may be.

B. Despite the preceding provisions of this instrument, the trustee may elect to withhold any property otherwise distributable under paragraph A of this Article to a beneficiary who has not reached the age of twenty-five years and may retain the property for that beneficiary in a separate trust named for the beneficiary, to be distributed to the beneficiary when he or she reaches the age of twenty-five years, or before then if the trustee so elects....

The Trust named Annie Lock's sister, Lena Wong, as successor trustee.

Annie Lock passed away on June 23, 1999. Annie Lock had never been married and had no children born to or adopted by her. Thus, Annie Lock had no surviving spouse and no surviving issue at the time of her death. Annie Lock was survived by two siblings, sister Lena Wong and brother Wah Tim Lock, numerous nieces and nephews, and several grandnieces and grandnephews.³

On March 2, 2001, Petitioner Lena Wong, as successor trustee of the Trust, filed the petition. The petition sought a judicial determination of the Trust beneficiaries and distribution of the Trust assets.⁴ Petitioner Lena Wong maintained that the Trust estate should be distributed, in equal shares, to herself and her brother, Wah Tim Lock.

On April 25, 2001, Virginia Naomi Shimada, Annie Lock's niece, on behalf of herself and other Lock descendants, filed a memorandum in opposition, arguing that the language of Article IV of the Trust unambiguously provided for the distribution of the Trust's assets to all of Annie Lock's siblings, "per stirpes." Under a per stirpes distribution, as advocated by Shimada, each of Annie Lock's eight siblings would receive a one-eighth share, with the surviving children of any predeceased sibling taking the share of the deceased parent in equal shares.

On May 9, 2001, Judge Colleen K. Hirai appointed Rhonda L. Griswold, Esq. (the Master), to serve as the Master to review, analyze, and provide recommendations regarding the interpretation of the Trust. In her report of June 1, 2001, the Master concluded that:

Although the Successor Trustee Lena Wong contends that the clause "per stirpes, to my then living brothers and sisters in equal shares" is ambiguous, Paragraphs A and B of Article IV when read in their entirety are relatively clear: the trust estate is to be distributed to Annie Lock's surviving brothers and sisters in equal shares, but if a sibling does not survive her, that predeceased sibling's share is to be distributed to his or her then living descendants, per stirpes. If the descendant is not yet age 25, the descendant's share shall be kept in trust until he or she reaches age 25.

The Master recommended that the Trust assets be distributed to all of Annie Lock's siblings per stirpes.

Pursuant to a hearing held on June 8, 2001, the petition was deemed a contested matter and was assigned to the Honorable Gary W.B. Chang. On July 9, 2001, Shimada filed a motion for summary judgment, contending that the Trust provided for a per stirpes distribution of the Trust assets. On July 27, 2001, Beneficiaries Lena Wong and Wah Tim Lock filed a memorandum in opposition to Shimada's motion for summary judgment (memorandum in opposition), arguing that the Trust assets should be equally divided between them as the only two surviving siblings of Annie Lock. Petitioner Lena Wong joined in the memorandum in opposition on July 31, 2001. On September 13, 2001, the trial court issued an order denying Shimada's motion for summary judgment, finding that there was an ambiguity in the Trust. On November 28, 2001, Shimada filed a notice of withdrawal from active participation in the proceedings.

A jury-waived trial was scheduled for the week of February 11, 2002. However, at a status conference held on January 28, 2002, trial was taken off the civil calender. Instead, the trial court directed Petitioner Lena Wong and Beneficiaries Lena Wong and Wah Tim Lock hereinafter, collectively, Appellees to file a stipulation of facts and proposed FOFs, COLs, and order in connection with the petition, to be served upon all parties in interest, together with a non-hearing notice stating that, unless a party in interest files a written objection within ten days from such service, the trial court would grant the relief sought in the petition.

On May 28, 2002, Appellees filed a stipulation of facts, and, on May 30, 2002, Appellees filed a notice of the proposed ruling based upon the stipulated facts.

On June 10, 2002, Appellants, comprising eight of Annie Lock's nieces and nephews, filed their objections to the stipulation of facts and the notice of the proposed ruling, on the ground that Annie Lock's intent to distribute her Trust assets "to her siblings, per stirpes, is clear and unambiguous based on a reading of the Trust as a whole." Despite Appellants' objections, the trial court entered its FOFs, COLs, and order granting the petition on July 2, 2002. The trial court's FOFs and COLs state in pertinent part:

Findings of Fact:

....

18. With respect to the beneficiaries and distribution of the estate, Paragraph A of Article IV of the Trust , hereinafter "Paragraph A," provides that Annie Lock's estate shall be distributed "per stirpes, to my then living brothers and sisters in equal shares."

19. In describing the beneficiaries of the Trust, Paragraph A is ambiguous because the provision "per stirpes, to my then living brothers and sisters in equal shares" is susceptible, on its face, to two (2) plausible, yet conflicting, interpretations.

20. On the one hand, "per stirpes" means that an estate is to be divided into as many equal shares as there are siblings, whether surviving or deceased, of a decedent. Had Annie Lock wished to have her estate distributed "per stirpes," her estate would be divided into eight (8) shares, one for each sibling; the children of a deceased sibling would then share their parent's portion.

21. Hence, "per stirpes" is in conflict with the remainder of the provision, that directs Annie Lock's estate to be distributed "to my then living brothers and sisters in equal shares," to those siblings who are living at the time of Annie Lock's death.

Conclusions of Law:

....

4. Although the phrase "per stirpes" standing alone has a single meaning, an "ambiguity" arises from Paragraph A of the Trust Agreement when read as a whole, for

... a document may still be ambiguous although it contains no words or phrases ambiguous in themselves. The ambiguity in the document may arise solely from the unusual use therein of otherwise unambiguous words or phrases. An ambiguity may arise from words plain in themselves but uncertain when applied to the subject matter of the instrument.

Hokama v. Relinc Corp., 57 Haw. 470, at 474-75, 559 P.2d 279 at 282 (1977) (citations omitted).

5. In the instant proceeding, this Court further had uncontroverted sworn statements regarding Annie Lock's intentions regarding the disposition

...