In re RIJ Revocable Trust Agreement
| Decision Date | 24 February 2014 |
| Docket Number | A13-1305 |
| Parties | In re the Matter of the RIJ Revocable Trust Agreement Dated March 16, 2006, as Amended by First Amendment to the RIJ Revocable Trust Agreement dated September 21, 2007. |
| Court | Minnesota Court of Appeals |
This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2012).
Affirmed in part and remanded
Hennepin County District Court
Kay Nord Hunt, Robert J. King, Jr., Bryan R. Feldhaus, Lommen, Abdo, Cole, King, Stageberg, P.A., Minneapolis, Minnesota (for appellant Anna MacCormick)
Joseph E. Trojack, West St. Paul, Minnesota (for respondent Elfi Ehrlich Janssen)
Considered and decided by Hooten, Presiding Judge; Hudson, Judge; and Minge, Judge.*
UNPUBLISHED OPINION
Appellant challenges the district court's orders denying her motion to dismiss respondent's petition in this trust matter, arguing that the district court lacks subject-matter jurisdiction over the damages claims in the petition and personal jurisdiction overappellant. She also argues that respondent lacked standing to assert a claim under the trust for spousal-maintenance-related obligations after the settlor's death. We affirm the district court's exercise of jurisdiction, but remand for the district court to clarify which of respondent's claims are within the scope of this trust proceeding.
Robert Janssen, the founder of Padco, Inc., and the settlor of the RIJ Revocable Trust, died on July 21, 2010. He had three adult children: Craig Janssen, Susan Carlson, and appellant Anna MacCormick. Robert Janssen was married to respondent Elfi Janssen from 1992 to 1994. Their dissolution judgment required that, until her death or remarriage, he would pay spousal maintenance of $3,000 per month, plus a cost-of-living adjustment (COLA) and any associated income-tax liability.
To fund the payment of the monthly maintenance obligation, Robert Janssen established an irrevocable charitable remainder annuity trust, with an annuity payable to him until his death, and then to Elfi Janssen for life. He initially paid the COLA and tax-liability obligations from other sources, but in 2006 he established a second trust, the RIJ Revocable Trust (the RIJ Trust), to pay them. He designated himself as trustee and provided that after his death the trust would become irrevocable, with Anna MacCormick and Elfi Janssen jointly acting as co-trustees. After the deaths of both Robert and Elfi Janssen, the remaining assets would be distributed to Anna MacCormick and her children. The trust was funded with four individual income-generating bonds, collectively valued in 2005 at $522,361.
In September 2007, Robert Janssen amended the RIJ Trust, removing himself as trustee and designating Elfi Janssen and a named bank as co-trustees, to act jointly; she was granted the power to replace the bank with a new co-trustee. The COLA and tax payments were to be made from income on the bonds, with part of the remaining income distributed to Robert Janssen and the rest retained by the trust. The corporate trustee resigned in November 2007; Elfi Janssen did not appoint another co-trustee.
Robert Janssen had a difficult relationship with his children. Although they all worked at Padco at various times, Craig Janssen and Susan Carlson saw their father only occasionally after they left the company. Anna MacCormick, however, maintained a relationship with Robert Janssen until his death. She started working at Padco in 2001 and has served as its president and board chair since 2007.
Robert Janssen executed a will in 1994 on a self-help legal services form. On January 2, 2008, however, after consulting with estate-planning attorneys, he executed a new professionally drafted will, giving his entire estate to Anna MacCormick, whom he appointed personal representative, and disinheriting his other two children. On January 17, 2008, Robert Janssen fell and broke his hip and underwent surgery, after which he became confused, delirious, and disoriented. On January 21, 2008, he signed a revocation of the RIJ Trust. The four bonds held in the trust account were transferred to a transfer-on-death (TOD) account that he had previously established at RBC Dain Rauscher (RBC) with Anna MacCormick as a named beneficiary. Using her power of attorney, Anna MacCormick sold one of the bonds, asserting that the sale was necessaryto provide for her father's care and support. After his death in 2010, she transferred the remaining TOD assets into a new RBC account in her name.
Initial estate and trust proceeding
In October 2010, Craig Janssen and Susan Carlson filed a petition in Hennepin County probate court challenging the January 2008 will as void due to lack of capacity and undue influence. They also alleged breach of fiduciary duty, conversion, and fraud, seeking damages or the imposition of a constructive trust. Anna MacCormick sought to dismiss the petition and to probate the will.
In June 2011, Elfi Janssen filed an amended petition as an interested person with a property right against Robert Janssen's estate, seeking relief under Minn. Stat. § 524.1-301 (2010) and Minn. Stat. § 524.3-105 (2010). She alleged Robert Janssen's lack of capacity to revoke the RIJ Trust and undue influence by Anna MacCormick and sought the imposition of a constructive trust and damages for conversion of trust assets. Anna MacCormick filed an objection denying the allegations. She moved to dismiss the petition, maintaining that the district court lacked subject-matter jurisdiction to determine Elfi Janssen's claims, or, in the alternative, for summary judgment. Elfi Janssen also moved for summary judgment.
In November 2011, the district court issued an order, concluding that it "has jurisdiction over trust matters pursuant to Minn. Stat. Chapter 501B" and that "all interested parties received notice of the claims in [the] petition and there is no prejudice to any party by proceeding with the issues raised in [the] trust petition as a companion petition [to the estate matter]." The court concluded that genuine issues of material factexisted on the issues of undue influence and lack of testamentary capacity and denied Anna MacCormick's request to dismiss those claims for lack of subject-matter jurisdiction. The district court also denied the request to dismiss the conversion claim for lack of subject-matter jurisdiction or, alternatively, on summary judgment. The district court scheduled for trial the issues of capacity and undue influence incident to execution of the 2008 will and the revocation of the RIJ Trust, expressly reserving other issues for later determination.
The district court held a trial in February and April 2012. While the matter was pending before the district court, Anna MacCormick formed Sibley Holdings, LLC, an entity that she owns along with her three children. In May and June 2012, she transferred to Sibley Holdings an RBC margin account that held the three remaining bonds, as well as other bonds and cash, all of which originally had been in the RIJ Trust and the RBC TOD account.
In July 2012, the district court set aside Robert Janssen's revocation of the RIJ Trust and ordered Anna MacCormick to return the trust assets. The district court found that Robert Janssen had testamentary capacity to execute the January 2008 will and that the evidence was insufficient to support a finding of undue influence in its execution. But the district court found that Robert Janssen lacked the capacity to revoke the RIJ Trust three weeks later, after his health deteriorated. The district court also found that he was unduly influenced in signing the trust revocation, based on Anna MacCormick's opportunity to exercise influence, her confidential relationship with her father, and her active participation in arranging the revocation. Specifically, the district court found thata facsimile exchanged between Robert Janssen and his estate-planning attorney on January 17, 2008, indicated that Robert Janssen wanted to make certain modifications to the trust; nothing in the facsimile suggested that he wanted to revoke the trust as Anna MacCormick had claimed. In August 2012, Elfi Janssen obtained an ex-parte order temporarily enjoining Sibley Holdings from transferring trust assets after she alleged that Anna MacCormick and Sibley had attempted to evade the district court's order by transferring the bonds.
Elfi Janssen's additional claims in the trust proceeding
In August 2012, by amended petition, Elfi Janssen sought relief as beneficiary and trustee under Minn. Stat. §§ 501B.24 and 501B.81, subd. 28 (2012), relating generally to trust administration. She alleged that: Anna MacCormick had transferred trust assets in fraud of creditors; the corporate veil should be pierced because Sibley Holdings was created to defraud the court; Anna MacCormick, Sibley Holdings, and RBC converted trust assets and had been unjustly enriched by Anna MacCormick's receipt of interest from the bonds; and Anna MacCormick and her attorneys had committed fraud on the court. Elfi Janssen moved to join Sibley Holdings and RBC as parties, for a temporary injunction to freeze Sibley Holdings's assets, for amended findings on the issue of Anna MacCormick' s control of trust assets, and for summary judgment.
In November 2012, the district court temporarily enjoined transfer of three of the bonds previously held by the trust in the RBC account, but otherwise denied the motions, stating that Sibley Holdings was not a party. The district court assigned the trust claims to a separate district court file, stating that Elfi Janssen's petitions "clearly requestadditional relief related to trust matters"; and that all issues, except for undue influence and testamentary capacity, had been reserved for later determination, so that there was no longer a need to keep the cases combined. The district court reaffirmed its previous findings, conclusions, and...
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