Kerper v. Kerper
| Decision Date | 01 September 1989 |
| Docket Number | R,No. 1,Nos. 87-244,A,87-245 and 87-246,1,s. 87-244 |
| Citation | 780 P.2d 923 |
| Parties | Loujen KERPER, Trustee of Kerper Trustppellant (Plaintiff), Janeen Kerper, Jill Kerper, Ryan Lennon, Colby Lennon and Kara Bereman (Plaintiffs), v. Meike KERPER, William Daniel Elsom, Teren Falk, John Kerper Romano, Tina Romano, Stana Milodragovich, Inge Stander and Taimi Alexander, Appellees (Defendants). Janeen KERPER and Jill Kerper, Appellants (Plaintiffs), Loujen Kerper, Trustee of Kerper Trustyan Lennon, Colby Lennon and Kara Bereman (Plaintiffs), v. Meike KERPER, William Daniel Elsom, Teren Falk, John Kerper Romano, Tina Romano, Stana Milodragovich, Inge Stander and Taimi Alexander, Appellees (Defendants). Inge STANDER and Taimi Alexander, Appellants (Defendants), Meike Kerper, William Daniel Elsom, Teren Falk, John Kerper Romano, Tina Romano and Stana Milodragovich (Defendants), v. Loujen KERPER, Trustee of Kerper Trust; Janeen Kerper; Jill Kerper; Ryan Lennon; Colby Lennon and Kara Bereman, Appellees (Plaintiffs). |
| Court | Wyoming Supreme Court |
Robert James Wyatt of Burgess & Davis, Cody, and Margaret Sommers of McCarty & Cranfill, Cody, for appellant Loujen Kerper.
Tom C. Toner of Redle, Yonkee & Arney, Sheridan, for appellants Inge Stander and Taimi Alexander.
Janeen Kerper, San Diego, Cal., pro se and counsel for appellant Jill Kerper.
Ross D. Copenhaver of Copenhaver, Kahl & Kath, Powell, for appellee Meike Kerper.
Charles G. Kepler of Simpson & Kepler, Cody, for appellees Ryan Lennon, Colby Lennon, Kara Bereman, Teren Falk and John Kerper Romano.
Before CARDINE, C.J., THOMAS, URBIGKIT, and MACY, JJ., and BROWN, J. Ret.
This lawsuit began as a declaratory judgment action brought by Loujen Kerper as trustee of the Kerper family trust after bad feelings developed between herself and her sister Meike Kerper about the use of a family cabin. Loujen was the designated trustee of the Kerper trust and was also an income beneficiary of that trust along with her three sisters. The trial court resolved the declaratory judgment action by ordering:
1. That certain surcharges be imposed against Loujen as the original trustee.
2. That a constructive trust be imposed on assets received from the estate of W.G. (Wes) Kerper and that the four Kerper sisters reimburse the Kerper trust for assets received from the Wes Kerper estate.
3. That Loujen Kerper be removed as designated trustee of the Kerper trust and that a corporate trustee be substituted.
The trial court's orders resulted in three separate appeals. In these consolidated appeals we will address the following issues:
I
Did the settlors of the Kerper trust intend to modify the liability of the trustee in the event she mismanaged trust assets?
II
Did Wes and Hazel Kerper execute mutual wills containing an express and enforceable contract for the disposition of their respective estates and if such contract existed did Wes Kerper breach its terms after Hazel Kerper's death?
III
Did the trial court err in removing Loujen Kerper as trustee and replacing her with the First Wyoming Bank of Cody as an independent successor trustee under the terms of the trust?
We reverse.
Hazel and Wes Kerper were both attorneys who practiced law for many years in Wyoming. They had four daughters and ten grandchildren, three of whom were minors at the time of trial.
Between 1965 and 1974, Hazel, Wes and their daughter, Loujen Kerper, executed numerous trust instruments incorporating supplements and amendments, apparently intending to dispose of the Kerper assets under the trusts. The first trust document, executed on September 7, 1965, provided that the corpus of the trust be distributed to the four daughters in equal shares. This trust was to expire by its terms either on September 1, 1967, or upon the death of Loujen Kerper, whichever occurred first. Appellants introduced unrebutted evidence that the original estate plan, as manifested in the 1965 trust, was later changed because of the alcoholism, emotional instability and troubled marriage of one of the daughters.
Hazel and Wes Kerper created other trusts, supplements and amendments between 1965 and 1974. 1 The last trust instrument was a document executed October 1, 1974, by Wes and Hazel Kerper, as settlors, and Loujen Kerper, as trustee. This document recited that it superseded the previous trust documents. It contained the same language of disposition found in the September 17, 1973 trust instrument, but added a spendthrift provision and provided that in the event of a vacancy occurring in the position of trustee, a successor trustee would be appointed by the surviving Kerper daughters.
On May 25, 1974, Hazel and Wes Kerper executed mutual wills containing the same terms of distribution for their respective estates. The wills provided that the remainder of their estate be left in trust to the trustee under Kerper Trust No. 1 dated September 17, 1973, to be added to and become part of the corpus of that trust. After October 1, 1974, Loujen Kerper managed the Kerper financial affairs through a single trust, that is, the October 1, 1974 trust document.
Hazel Kerper died on January 17, 1975. On July 22, 1976, the decree of distribution of her estate distributed certain property to Loujen Kerper, trustee of Kerper Trust No. 1.
By the summer of 1980 Wes Kerper had decided to remarry and called a meeting with his daughters in which he informed them that he desired to change his will. On July 15, 1980, an agreement was signed by Wes Kerper and his four daughters. The agreement provided that a will, executed on that date by Wes Kerper, would control the distribution of his property and estate and that the will was made in accordance with the original understanding between Wes Kerper and Hazel B. Kerper as set forth in their 1974 wills. The July 15, 1980 will revoked Wes's 1974 will and provided that upon the death of Wes Kerper, the remainder of his estate would go to his four daughters in equal shares.
Wes Kerper died on June 3, 1981. No contractual claims were filed against the estate by any of the beneficiaries of the trust or by the trustee, and there were no objections made to the petition for decree of distribution. Wes Kerper's estate was distributed in accordance with his will of July 15, 1980, with the residue and remainder of his estate set over to the four Kerper daughters in equal shares. The decree of distribution in the estate was entered on October 21, 1982.
Loujen Kerper proceeded to administer the trust according to the terms of the October 1, 1974 trust agreement. After substantial family disharmony, she filed a complaint in the District Court of Park County, Wyoming, seeking a declaratory judgment that she had acted in accordance with the trust documents in making loans to herself and had otherwise conducted the business of the trust properly. Several beneficiaries of the Kerper Trust filed a counterclaim naming Loujen Kerper in her capacity as trustee as defendant, alleging that she had breached her duties and mismanaged the trust.
After a motion by appellees Teren Falk, John Kerper Romano, Tina Romano, Stana Milodragovich and Meike Kerper, Charles Kepler was appointed as guardian ad litem for the minor contingent income beneficiaries and remaindermen of the trust. The guardian ad litem filed a counterclaim and crossclaim against the four Kerper daughters alleging that Wes Kerper had breached the contract contained in the 1974 wills by executing his July 15, 1980 will in which he changed the disposition of the assets of his estate. The guardian ad litem sought judgment against the four Kerper daughters requiring them to convey to the Kerper Trust No. 1 all property which they received from the Wes Kerper estate still owned by them, and to pay to Kerper Trust No. 1 an amount equal to the fair market value on October 21, 1982 (the date of the decree of distribution in the Wes Kerper estate) of all property received from the estate of Wes Kerper no longer owned by them.
The guardian ad litem filed a motion for summary judgment on his claims on July 31, 1986. The motion was resisted by the trustee on several grounds including the fact that a claim against the estate arising from a contract to make a will had to be asserted in an independent action against the administrator or executor of the estate and that the beneficiaries had failed to challenge the distribution made in the estate of Wes Kerper in a timely manner.
On September 22, 1986, the court granted the partial summary judgment filed by the guardian ad litem and imposed a constructive trust upon the assets received by the four Kerper daughters from the Wes Kerper estate. The order granting the partial summary judgment left for future determination the amount which the four Kerper daughters would be obligated to reimburse the trust.
After other pretrial motions, including a motion for partial summary judgment by the trustee, the court issued an additional partial summary judgment holding that:
(1) The Declaration of Trust dated September 7, 1965, terminated and became distributable to the four Kerper daughters on September 1, 1967, and that the four Kerper daughters were entitled to a conveyance to them of their undivided one-fourth interest in the Husky oil royalty.
(2) The Amendment to Declaration of Trust No. 1 executed by Loujen Kerper on May 30, 1972, was not effective to amend the 1965 Declaration of Trust because the 1965 declaration had already expired by its terms and because no power to amend or modify had been reserved in the 1965 declaration; therefore, it was irrevocable and not subject to amendment or revocation.
(3) The December 15, 1967 trust instrument was a "dry trust" because no asset or property was transferred to the trust at the time of its execution; therefore, the 1967 trust agreement was invalid for lack of a trust res at the time the trust was created. The court determined that a consequence of...
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