In re Raymond W. George Trust

• Decision Date: 23 September 1999
• Docket Number: No. 98-304.,98-304.
• Citation: 296 Mont. 56,1999 MT 223,986 P.2d 427
• Parties: In the Matter of RAYMOND W. GEORGE TRUST, Sarah Arnott Ozement, Successor Trustee.
• Court: Montana Supreme Court

986 P.2d 427

1999 MT 223

296 Mont. 56

In the Matter of RAYMOND W. GEORGE TRUST, Sarah Arnott Ozement, Successor Trustee.

No. 98-304.

Supreme Court of Montana.

Heard January 14, 1999.

Submitted March 25, 1999.

Decided September 23, 1999.

As Amended on Denial of Rehearing October 21, 1999.

Stephen M. Barrett, Kirwan & Barrett, Bozeman, Montana (argued) for Appellant.

James P. Harrington, Butte, Montana (Sarah Arnott Ozment); Alan F. Blakely (argued), Blakely & Velk, Missoula, Montana (Leo George); William M. Kebe, Jr. (argued), Daniel D. Manson, Corette, Pohlman & Kebe, Butte, Montana (Kenneth George and Shirley Bragg), for Respondent.

Justice JAMES C. NELSON delivered the Opinion of the Court.

¶ 1 James Sievers (Sievers) appeals from the Order and Memorandum issued by the District Court for the Sixth Judicial District, Park County, that determined that Sievers was not entitled to a portion of the trust property of the Raymond W. George Trust and that Kenneth George (Kenneth), Shirley Bragg (Shirley), and Leo George (Leo) are each entitled to an equal share of the trust property that Sievers claimed. We affirm.

¶ 2 We address the following dispositive issues on appeal:

¶ 3 1. Did the District Court err in ruling that Sievers did not acquire an estate or interest in the trust property?

¶ 4 2. Did the District Court err in ruling that the doctrines of judicial admissions, collateral estoppel, res judicata, and judicial estoppel did not bar Kenneth, Shirley, and Leo from contesting Sievers' claim?

Factual and Procedural Background

¶ 5 This is the third appeal to this Court of litigation involving the Raymond W. George Trust. See Matter of Raymond W. George Trust (1992), 253 Mont. 341, 834 P.2d 1378 and Double AA Corp. v. Newland & Co. (1995), 273 Mont. 486, 905 P.2d 138. The background leading to the present appeal is as follows:

¶ 6 Raymond W. George (Raymond) died testate on April 18, 1974. Raymond was survived by his wife, Olga George (Olga), and their four children: Maxine George (Maxine), Kenneth, Shirley, and Leo.

¶ 7 Raymond's will directed that most of his property, including a 1,400 acre ranch located south of Livingston, be placed in a trust. Raymond's will named Maxine the trustee and directed her to pay the income from the trust property to Olga. Raymond's will granted the trustee the power to sell the trust property. Raymond's will directed the trustee to distribute, at Olga's death, one-third of the real property in the trust to Maxine and two-ninths of the real property in the trust each to Kenneth, Shirley, and Leo. Raymond's will also granted Maxine a right of first refusal to Kenneth's, Shirley's, and Leo's shares of the real property.

¶ 8 In 1976, Maxine married Cleto McPherson (Cleto). Maxine died intestate in 1980. Cleto was her sole heir.

¶ 9 During the probate of Maxine's estate, a dispute arose between Cleto and Kenneth, Shirley, and Leo over whether Cleto was entitled to inherit Maxine's rights in the trust. To resolve the dispute, Kenneth, Shirley, and Leo each entered into an agreement with Cleto wherein they agreed that Cleto was "entitled to take that share that [Maxine] would have taken under" Raymond's will. In return, Cleto agreed that he was not entitled to inherit Maxine's right of first refusal.

¶ 10 On April 11, 1988, Cleto conveyed by grant deed his "one-third ... remainder interest" in the trust property to the Cleto McPherson Trust. On July 31, 1989, David DePuy, the trustee of the Cleto McPherson Trust, conveyed by grant deed the Cleto McPherson Trust's "one-third ... remainder interest" in the trust property to Sievers. Cleto died in 1992.

¶ 11 Olga died in 1997. As a result, Sarah Arnott Ozement, the successor trustee, petitioned the District Court to terminate the trust. The trust property consisted of the 1,400 acre ranch.

¶ 12 Sievers then claimed that he was entitled to the one-third interest in the trust property that the Cleto McPherson Trust had transferred to him. Kenneth, Shirley, and Leo, however, objected to Sievers' claim. They asserted that Cleto did not have an estate or interest in the trust property to convey to the Cleto McPherson Trust, which, in turn, did not have an estate or interest in the trust property to convey to Sievers. Therefore, Kenneth, Shirley, and Leo maintained that Sievers did not have a one-third interest in the ranch. Hence, they asserted that they were each entitled, under the residuary clause of Raymond's will, to an equal share of the trust property that Sievers claimed.

¶ 13 The District Court ruled that Cleto did not acquire an estate or interest in the trust property. Hence, the District Court concluded that Cleto did not have an estate or interest in the trust property to transfer to the Cleto McPherson Trust and, consequently, that the Cleto McPherson Trust did not have an estate or interest in the trust property to transfer to Sievers. Because the court ruled that Sievers did not acquire an estate or interest in the trust property, it concluded that Kenneth, Shirley, and Leo were each entitled to an equal share of the property that Sievers claimed. Finally, the District Court summarily ruled that the doctrines of res judicata, judicial estoppel, judicial admissions, and collateral estoppel, did not bar Kenneth, Shirley, and Leo from contesting whether Sievers acquired an estate or interest in the trust property. Sievers appealed.

Standard of Review

¶ 14 This Court reviews a district court's conclusions of law to determine whether the court interpreted the law correctly. Delaware v. K-Decorators, 1999 MT 13, ¶ 27, 293 Mont. 97, ¶ 27, 973 P.2d 818, ¶ 27, 56 St.Rep. 52, ¶ 27 (citing Carbon County v. Union Reserve Coal Co., Inc. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686).

Issue 1.

¶ 15 Did the District Court err in ruling that Sievers did not acquire an estate or interest in the trust property?

¶ 16 Sievers argues that the District Court erred in ruling that he did not acquire an estate or interest in the trust property. Sievers maintains that, under the general rule of trust law, the remainder beneficiaries — including Cleto — had equitable estates and interests in the trust property and that they could convey those estates and interests. Since Cleto conveyed his interest in the trust property to the Cleto McPherson Trust which then conveyed its interest in the trust property to Sievers, Sievers argues that he acquired an estate and interest in the trust property. Since the trust is being terminated, Sievers asserts that he is entitled to a portion of the trust property.

¶ 17 Kenneth, Shirley, and Leo, however, argue that, under the plain language of § 72-24-201, MCA (1973), neither they nor Maxine, as remainder beneficiaries, had any estate or interest in the trust property when Olga was living. Instead, they maintain that their and Maxine's interest only allowed them to enforce the performance of the trust. Moreover, they assert that Cleto did not acquire any more interest in the trust than Maxine had. They therefore assert that Cleto did not have an estate or interest in the trust property to convey to the Cleto McPherson Trust. Consequently, they maintain that the Cleto McPherson Trust could not have conveyed any estate or interest in the trust property to Sievers and, therefore, that Sievers did not acquire an estate or interest in the trust property. We agree.

¶ 18 Section 86-108, RCM (1947)(recodified in 1978 as § 72-24-201, MCA, and repealed in 1989) (hereinafter referred to as §XX-XX-XXX) provides:

Except as hereinafter otherwise provided, every express trust in real property, valid as such in its creation, vests the whole estate in the trustees, subject only to the execution of the trust. The beneficiaries take no estate or interest in the property, but may enforce the performance of the trust. [Emphasis added.]

A substantively identical statute is presently codified at § 72-36-206(2), MCA.

¶ 19 To interpret a statute, we ascertain and declare what is in terms or in substance contained therein, neither inserting what has been omitted nor omitting what has been inserted. Section 1-2-101, MCA. We first look to the plain meaning of the words the statute contains. Seypar v. Water and Sewer Dist. No. 363, 1998 MT 149, ¶ 26, 289 Mont. 263, ¶ 26, 960 P.2d 311, ¶ 26. When the statutory language is clear and unambiguous, the statute speaks for itself, and, consequently, we will not use other means of interpretation. "In the search for plain meaning, `the language used must be reasonably and logically interpreted, giving words their usual and ordinary meaning.'" Seypar, ¶ 26 (quoting Werre v. David (1996), 275 Mont. 376, 385, 913 P.2d 625, 631).

¶ 20 The plain and unambiguous language in § 72-24-201, MCA, states that the beneficiaries of an express trust in real property take no estate or interest in the trust property and that the trustee has the whole estate in the trust property. The plain and unambiguous meaning of the words "no" and "whole" provide that the beneficiaries of an express trust in real property do not have any estate or interest — legal or equitable — in the trust property and that the trustee has the entire or complete interest and estate in the trust property. Thus, under the plain and unambiguous language in § 72-24-201, MCA, the beneficiaries of an express trust in real property do not have either a legal or an equitable estate or interest in the trust property; they may only enforce the performance of the trust.

¶ 21 In the instant case, then, under § 72-24-201, MCA, the remainder beneficiaries — including Cleto — did not have an estate or interest in the trust property. Since Cleto did not have an estate or interest in the trust property, he could not convey an estate or interest in the trust property to the Cleto McPherson Trust which, in turn, could not convey an estate or interest in the trust property to Sievers. Hence, the District Court correctly ruled that Sievers...