Keener v. Keener
| Decision Date | 18 September 2009 |
| Docket Number | Record No. 082280. |
| Citation | 278 Va. 435,682 S.E.2d 545 |
| Parties | Debra KEENER v. Hollis Grant KEENER, Jr., et al. |
| Court | Virginia Supreme Court |
Amy E. McCullough (H. Jan Roltsch-Anoll; Szabo & Zelnick & Erickson, Woodbridge, on briefs), for appellant.
Shelly R. Collette (Pirsch & Associates, on brief), Alexandria, for appellees.
Present: HASSELL, C.J., KOONTZ, KINSER, LEMONS, GOODWYN, and MILLETTE, JJ., and RUSSELL, S.J.
OPINION BY Senior Justice CHARLES S. RUSSELL.
This appeal presents a question of first impression, involving the construction and effect of a forfeiture clause contained in an inter vivos trust. The trust itself was the sole beneficiary under a will.
Hollis Grant Keener (the testator), a widower residing in Prince William County, died on August 7, 2007, survived by his seven children, Hollis G. Keener, Jr. (Hollis), Thomas C. Keener (Thomas), Brenda Anne Collier (Brenda), Deborah Louise Keener (Debra),1 Robin Wanda Peer (Robin), Joyce Sue Purks (Joyce), and Clark Allen Keener (Clark). More than four years before his death, the testator consulted an attorney specializing in estate planning, who prepared a "pour-over" will that left all the testator's property to the "Hollis Grant Keener Revocable Living Trust" (the trust). The will named the testator's eldest son, Hollis, as executor. The will and the trust were both executed on February 1, 2003.
The trust was to become effective immediately. It designated the testator as sole trustee during his lifetime, with his son Hollis as first successor trustee and his son Thomas as second successor trustee. The trust instrument described its purpose:
The purpose of this Trust is to reduce or eliminate probate costs to the extent possible while maintaining complete control of my assets. I wish to also ultimately distribute my estate to members of my family in a prompt, orderly and private manner.
Specifically, I wish to provide for my support, comfort and well-being while I am alive and then to pass along my estate to my children, HOLLIS GRANT KEENER, JR., THOMAS C. KEENER, BRENDA ANNE COLLIER, DEBORAH LOUISE KEENER, ROBIN WANDA PEER, JOYCE SUE PURKS, AND CLARK ALLEN KEENER, if living.
The trust provided that if all of the testator's children should survive him, the trust would terminate at his death and all its assets would be distributed to them in equal shares, "[e]xcept as may be provided by an addendum to this Trust." On the same date the testator executed his will and trust, he also executed four addenda to the trust. The first of these specified the powers of the trustee, the second transferred all the testator's personal property to the trust, except for items requiring a certificate of title, the third transferred the testator's automobile to Hollis at the time of the testator's death, and the fourth provided that the shares of Robin and Clark should not be distributed to them upon the testator's death, but were to continue to be held in trust for them during their lifetimes. The trustee was given power to distribute principal and interest to those children from their shares, in his sole discretion, for their health care, education, support and maintenance.
In 2005, the testator executed a fifth addendum2 providing that upon his death, Clark's share and Robin's share would be first applied to the repayment of certain bank loans made to them before they received any distribution from the trust, and that Joyce's share would be first applied to the repayment of a loan the testator had made to her before she received any distribution from the trust.
In early March 2007, Hollis, who lived in Delaware, visited his father, who was then living with Brenda and her husband in their home in Manassas. When Hollis arrived, he found Debra engaged in an argument with Brenda. In the presence of their father, Debra was examining a portfolio of papers containing their father's will and trust documents. She left the house with these papers, had copies made of them, and returned the original papers. The children's testimony as to the details of their dispute varied, but the disagreements among them became so heated that by the time of their father's death five months later, Debra was on speaking terms with only one of her siblings.
Within a few weeks after this unpleasantness, the testator executed a final addendum to his trust that provided:
At my death:
1. Any person that objects to or contests any provision of this Trust, in whole or in part, shall forfeit his or her entire distribution otherwise payable under this Trust and receive only $1.00 under this Trust and will receive no other distribution from my Trust nor from my estate.
This language was confined to the trust; the testator's will did not contain a forfeiture or no-contest provision.
At the time of the testator's death, the original will was in Hollis' possession in Delaware. He did not offer it for probate because he thought probate was unnecessary, explaining that "the Will was referring everything to the Trust." He told his siblings that "there really was no Will" and that the will "referred everything to the Trust." He later testified that he thought "[t]he only thing I was going to do was get the money, disburse it, call it a day, and I was done."
Debra went to the clerk's office of the Circuit Court of Prince William County to ascertain whether her father's will had been offered for probate. Finding no such record, she attempted to offer for probate the copy of the will she had made in March, but was informed that the original will was necessary. Debra had no communications with Hollis, but she later testified that Brenda and Thomas both told her that "[t]here is no Will."
On October 15, 2007, Debra applied to the clerk of the circuit court for administration of her father's estate, making oath that he had died intestate. The clerk entered an order appointing her administratrix and authorizing issuance of letters of administration to her.
On October 18, 2007, Hollis sent a memorandum to his six siblings making a partial disbursement to them of the funds in the trust. In accordance with the addenda to the trust, he deducted from the checks sent to Joyce and Clark the loans the testator had mentioned. Learning of Debra's qualification as administratrix before her check had cleared the bank, Hollis stopped payment on it on the ground that she had forfeited her entire interest in the trust by violating the no-contest provision in the last addendum to the trust.
Hollis, Thomas and Brenda (the petitioners) brought this suit by filing a petition in the circuit court exhibiting the testator's original will and asking for its admission to probate. The petition named the remaining four children as defendants and asked the court to remove Debra as administratrix and to appoint Hollis as personal representative of the estate. The petitioners alleged that Debra's acts amounted to a contest of the provisions of the trust. Debra filed an answer in which she stated that if a properly executed original will were produced, she would have no objection to its admission to probate and would "cooperate in correcting the probate records" to change the fiduciary in accordance with the provisions of the will.
Debra's answer was accompanied by a counterclaim alleging that Hollis and Thomas had breached their fiduciary duties as successor co-trustees under the trust by wasting trust assets, concealing assets from some beneficiaries while favoring others, and failing to account for their acts. She asked the court to order them to make full disclosure of the facts, to render an accounting and to reimburse the trust for all costs, waste and damages the court might find that the trust had incurred.
Debra later filed an amended counterclaim alleging additional wrongful acts committed by Hollis and Thomas and asking for their removal as co-trustees or, alternatively, for subjecting them to the supervision of the commissioner of accounts. The petitioners answered, accusing Debra of fraud,...
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