Kerr v. Bauer
| Decision Date | 11 May 2016 |
| Docket Number | CV030231,A153944. |
| Citation | 373 P.3d 1263,278 Or.App. 224 |
| Parties | Bryan KERR and Kerwin Kerr, Plaintiffs–Appellants, v. Donald R. BAUER, Trustee of The Kerr Homestead Trust, Defendant–Respondent, and J.M. Kerr, Trustee of The Kerr Homestead Trust, Defendant–Appellant, and Kerwin D. Kerr, Sr., Deceased, Defendant below. |
| Court | Oregon Court of Appeals |
Thomas H. Anderson, McMinnville, argued the cause for appellants. With him on the joint briefs were Thomas H. Anderson, P.C., Joseph A. Yazbeck, and Yazbeck Cloran & Bowser, P.C.
Thomas C. Tankersley, McMinnville, argued the cause for respondent. With him on the brief were Joseph M. Strunk and Tankersley, Wright & Strunk, LLC.
Before SERCOMBE, Presiding Judge, and HADLOCK, Chief Judge, and TOOKEY, Judge.
, P.J.
In 1956, Sylva Kerr deeded property in trust to two of her children for the benefit of all of her descendents. That deed was inconsistent with the common-law rule against perpetuities. The trustees attempted to reconvey the property to Kerr by deed. Kerr then deeded the property outright to three of her children. The property was later conveyed to a family trust. Three of Kerr's descendents brought suit to cancel the later deeds and quiet title to the property in the original trustees. The trial court granted that relief and modified the 1956 deed to correct the rule against perpetuities violation. In Kerr v. Bauer, 232 Or.App. 374, 222 P.3d 1117 (2009)
, rev. den., 348 Or. 414, 233 P.3d 817 (2010) (Kerr I ), we concluded that the trial court erred in reforming the 1956 deed in the manner that it did. On remand, on cross-motions for summary judgment, the trial court concluded that the 1956 deed was void and that the later deed from Kerr to her children was valid. On appeal, we agree with the court's determinations about the legal effect of the deeds, and we affirm its rulings on the cross-motions for summary judgment.
We restate the underlying facts from Kerr I:
(brackets in original; footnote omitted).
As noted, the trial court in Kerr I “ ‘quiet[ed] title in the trustees pursuant to the 1956 deed (Deed # 1) and order[ed] all subsequent deeds of the real property cancelled.’ ” Id. at 379, 222 P.3d 1117
. In a letter opinion, the trial court had acknowledged that Deed # 1 violated the common-law rule against perpetuities but held that the interests of the grandchildren and descendents could be severed from the interests of the children, so as to change the deed to cure the rule against perpetuities defect. The trial court also concluded that the trustees under Deed # 1 did not have the power to convey the property to Sylva in Deed # 2, and, therefore, all deeds that followed that conveyance were void as a matter of law. The trial court subsequently entered a judgment to that effect.
On appeal from that judgment, Donald argued that severance was improper and Deed # 1 was therefore void. Id. at 380, 222 P.3d 1117
. In Kerr I, we concluded that the rule against perpetuities violation could not be cured by severance. We explained that the doctrine of severance can be applied only when “severing invalid provisions from the remainder of the trust” would not be “contrary to the settlor's purpose of plan” and interpreted Deed # 1 to “evidence[ ] Sylva's intent to benefit her children, grandchildren, and descendents by preserving the property as a place of rest and recreation for all of them equally, with no end date and no provision for the final disposition of the property to any individual.” Id. at 381–83, 222 P.3d 1117. Thus, Deed # 1 was “one entire scheme from which interests cannot be severed without defeating Sylva's manifest purpose to benefit ‘each and all’ of the beneficiaries.” Id. at 383, 222 P.3d 1117. Accordingly, we reversed and remanded the trial court's decision.
In Kerr I, we noted, but did not resolve, one of Donald's alternative arguments, which is relevant to this appeal. After the trial court had entered an order granting plaintiffs' motion for summary judgment and directing entry of a judgment cancelling Deeds # 2 to # 4 and quieting title in J.M. Kerr (J.M.) and Senior, Donald petitioned the court to reform Deed # 1 under ORS 105.970(2)
.1 Donald argued that the court could better preserve Sylva's intent by modifying the deed to include a savings clause and additional trustees.2 Bryan, Junior, and J.M. responded that, since the only remaining interest in the trust was that of the children, Donald was no longer an “interested person” who was qualified to seek reformation. See ORS 105.970(2)
(). The parties reiterated those arguments on appeal, but we stated that “[o]ur disposition on Donald's assignment of error obviate[ed] any need to address” them. Kerr I, 232 Or.App. at 383, 222 P.3d 1117.
On remand, Bryan and Junior again moved for summary judgment on their claim to cancel Deeds # 2 to # 4 and quiet title in J.M. and Senior. Donald also moved for summary judgment on that claim. Along with the merits of plaintiffs' claim, the parties disputed whether the decision in Kerr I limited the issues remaining for the trial court to decide on remand.
Bryan and Junior—joined by J.M.—asserted that they were entitled to summary judgment for two reasons: First, Kerr I was premised on the fact that Deed # 1 was valid and not void ab initio and implicitly foreclosed any assertion that it was not, and Deed # 1 remained valid until a court declared it to be void. Therefore, Deed # 1 should be enforced in some manner. Second, they argued that Deed # 2, and all subsequent deeds, were void because the trustees had no authority to convey the property back to Sylva in Deed # 2.
Bryan and Junior noted that our opinion was limited to the issue of whether severance was the proper way to reform Deed # 1. They reasoned that the court took that approach because it had accepted the premise that Deed # 1 could be reformed in some way—just not through severance—and the remand therefore came with implicit instructions mandating that the trial court reform Deed # 1 under ORS 105.970(2)
. In support of that assertion, they pointed to the portions of Kerr I, discussed above, that mentioned Donald's request for reformation. They argued that the Kerr I court would not have bothered to discuss that argument—one of many that Donald raised on appeal that the court did not resolve—if the court had not intended to signal to the trial court that reformation was the appropriate resolution of the case.
For his part, Donald argued—in opposition to plaintiffs' motion for summary judgment and in support of his own motion for partial summary judgment—that the effect of our reversal was to wipe away all previous rulings by the trial court and start the case anew. Further, he contended that Kerr I implicitly held that Deed # 1 was void because the rule against perpetuities violation could not be cured by severance. For that reason, he asserted that Deed # 1 could not reformed under ORS 105.970(2)
. Donald further contended that, even if Deed # 1 could be reformed under that statute, the trial court should decline to exercise its discretion to do so for a number of reasons. In particular, Donald relied on his own affidavit to support his argument that Marjorie, J.M., and Senior had acted to “save” the 1956 trust from the rule against perpetuities violation through the conveyances memorialized in Deeds # 2 and # 3. He further argued that reforming Deed # 1 was...
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