Kinniburgh v. Moncur (In re J. Kent Kinniburgh Revocable Tr. Dated Jan. 27, 1992)
| Citation | 2023 WY 56 |
| Docket Number | S-22-0142 |
| Decision Date | 06 June 2023 |
| Parties | IN THE MATTER OF THE J. KENT KINNIBURGH REVOCABLE TRUST DATED JANUARY 27, 1992, AS AMENDED AND RESTATED: v. JACQUE MONCUR and ROSEMARY STEELE, Successor Co-Trustees of the J. Kent Kinniburgh Revocable Trust dated January 27, 1992, Appellee (Petitioner). JANEL K. KINNIBURGH, beneficiary and Successor Trustee of the J. Kent Kinniburgh Revocable Trust dated January 27, 1992, Appellant (Plaintiff), |
| Court | United States State Supreme Court of Wyoming |
Appeal from the District Court of Natrona County The Honorable Kerri M. Johnson, Judge
Representing Appellant: Lucas Buckley and Jeremiah James of Hathaway & Kunz LLP. Argument by Mr. Buckley.
Representing Appellee: Thomas A. Valdez, Mikole Bede Soto and Trevor J. Schenk of Chapman Valdez & Lansing. Argument by Mr. Schenk.
Before FOX, C.J., and KAUTZ, BOOMGAARDEN, GRAY and FENN, JJ.
[¶1] Janel Kinniburgh is one of the beneficiaries of the J. Kent Kinniburgh Revocable Trust (the Trust). She filed suit against her sisters, Jacqueline Moncur and Rosemary Kinniburgh, who are the co-trustees of the Trust, alleging they breached certain fiduciary duties. Following a bench trial, the district court ruled in favor of the Trustees on most of Janel's claims. While the district court found the Trustees breached their duties of loyalty and impartiality, it found Janel failed to prove any damages resulted from that breach. The district court declined to remove the Trustees or award any monetary damages. Janel appeals, and we affirm.
[¶2] Appellant raises three issues, which we rephrase as follows:
[¶3] James Kent Kinniburgh (Kent) was the adoptive father of five children: Jacqueline Moncur (Jacque), Rosemary Kinniburgh Janel Kinniburgh, Donald Kevin Kinniburgh (Kevin); and Robert Keith Kinniburgh (Keith).[1] Kent established the J. Kent Kinniburgh Revocable Trust on January 27, 1992. The Trust was amended twice, once on September 20, 2004, and again on September 25 2007. During his lifetime, Kent and Jacque served as co-trustees of the Trust. Although Jacque was a co-trustee, Kent did not share any information about the Trust with her, and he did not ask her to perform any tasks related to the Trust. She was not given a list or inventory of the Trust's assets.
[¶4] As a result of a car accident, Kent had been a paraplegic since he was nineteen, and as he got older, it became more difficult for him to do everyday activities. After Kent's second wife, Georgia, died in 1991, her sister, Sharon Lohrenz, became his companion and caregiver. In 2002, he asked Sharon to retire and move to Arizona with him. Kent purchased a home in Wickenburg, Arizona, and he and Sharon moved into that home in early 2003.
[¶5] Kent was generous with his money, and he often helped his children when they needed it. For example, Kent gave Janel his vehicle after he moved to Arizona. He also gave Janel money whenever she asked for it. In 2006, Kent purchased a condo in Houston, Texas, where he allowed Rosemary to reside rent-free. At the time he purchased the condo, Rosemary also owed Kent more than $70,000 for money he lent her in the late 1990s to purchase a tavern in Houston.
[¶6] Kent passed away on February 2, 2016, and his Trust became irrevocable. Following Kent's passing, Rosemary was appointed as a co-trustee pursuant to Section 5.1 of the Trust. In March 2016, the Trustees mailed each qualified beneficiary a copy of a Notice to Qualified Beneficiaries of the J. Kent Kinniburgh Revocable Trust. This document informed the beneficiaries they were entitled to a copy of the Trust instrument and to the trustee's reports under Wyoming Statute § 4-10-813(c).
[¶7] At the time of Kent's death, he still owned the condo in Houston, Texas, the house in Wickenburg, Arizona, and various mineral rights. He also owned liquid assets worth $1,207.50. The Arizona and Texas properties belonged to the Trust at the time of Kent's death, but the mineral rights were held in his individual name. The mineral rights were transferred to the Trust through a summary distribution proceeding in June 2016.
[¶8] Sections 4.1 and 7.6 of the Trust required the Trustees to pay all of Kent's bills, expenses, taxes, and probate costs. Once Kent's expenses were paid, Section 4.2 of the Second Amendment to the Trust required the Trustees to pay the following specific gifts: 1) $50,000 to Janel; 2) $150,000 to Sharon; and 3) $5,000 to Keith. This section of the Trust also authorized and directed the Trustees to sell the Arizona property at fair market value to pay the specific gifts. Once the specific gifts were paid, Section 4.4 provided the net income of the Trust would be distributed to Janel and Kevin at least quarterly. Under Section 4.7 of the Trust, upon the death of Kevin and Janel, the undistributed balance of the Trust would be distributed to Kent's grandson, Logan Moncur, and any living issue of Janel and Kevin.
[¶9] The family gathered in Casper, Wyoming, in July 2016 to spread Kent's ashes. During this gathering, Jacque told her siblings the Trust documents were available for their review. Jacque provided Janel and Kevin a copy of the Trust and Kent's will in the months following Kent's death. Janel and Kevin understood the specific gifts had to be paid before they would receive any income distributions. After this gathering, Jacque spoke to Janel and Kevin by phone on a weekly basis about what was going on with the Trust. The Trustees did not provide any sort of written accounting or report to the beneficiaries.
[¶10] The Trustees could not pay the specific gifts until they sold the Trust's real property. Section 4.3 of the Second Amendment to the Trust gave Rosemary the option to purchase the Texas condo at fair market value within 120 days of Kent's death. Rosemary chose to exercise this option.
[¶11] Rosemary believed the fair market value of the condo to be $105,000 due to the condition of the property. According to her testimony, the ground floor of the condo flooded during Hurricane Ike in 2008, which caused the hardwood floors to warp. In addition, in 2010 a water leak from the upstairs bathtub caused mold in the kitchen, which Rosemary could never remediate. Rosemary did not talk to a realtor or appraiser when determining the fair market value of the condo. However, she knew another similar unit in her complex was sold for $109,000. She also asked a real estate attorney to run some comparable sales for her, and she reviewed the Harris County Tax Assessment for the condo, which showed a value of just over $110,000. Rosemary ultimately decided to purchase the condo for $122,000. Jacque played no role in determining the purchase price. The Trust paid the closing costs for the sale, but it did not have to pay any realtor fees. The transaction closed in early May 2016. The beneficiaries were not provided information or written documents pertaining to the sale of the Texas condo. Rosemary sold the condo in late 2017. A developer purchased the entire complex, which resulted in the owners of the condos being paid above market value. Although Rosemary testified she received more than $200,000 from the sale of the condo, she could not recall the exact amount the developer paid for the condo.
[¶12] Rosemary also paid the Trust $78,000 to pay off the note she still owed to Kent. The Trust account only had a balance of approximately $7,500 before Rosemary purchased the Texas condo and paid off the note. After receiving the $200,000 from Rosemary, the Trustees decided to start paying the specific gifts, although there was not enough money to pay all the gifts. Keith received his $5,000 gift on May 17, 2016. Janel received her $50,000 gift on July 18, 2016. Sharon received the following payments: 1) $1,000 on April 19, 2016; 2) $50,000 on May 5, 2016; 3) $15,000 on June 16, 2016; and 4) $2,500 on September 15, 2016. After making these payments, the Trustees still owed Sharon approximately $81,000.
[¶13] In November and December of 2016, the Trustees advanced Kevin approximately $12,500. These funds were paid directly to some of Kevin's creditors. Kevin and the Trustees agreed the amount he received would be taken out of his portion of the proceeds from the sale of the Arizona property. At the time the $12,500 was advanced, Kevin was the only beneficiary who had not received a distribution from the Trust. Janel was not told about the payments Kevin received, and she was not offered matching distributions.
[¶14] The Trustees knew they would have to sell the Arizona property to finish paying Sharon's specific gift. Although Sharon planned to move back to Casper after Kent's death, she agreed to stay in the Arizona house until it sold. The Trustees made it clear from the beginning the house needed to be sold, and Sharon would have to move out once it had been sold. In exchange for staying in the home and keeping it ready for showings, the Trustees promised to help Sharon move back to Casper after the house was sold. The Trustees did not pay Sharon to stay in the home, and Sharon did not pay any rent while living there. While the house was on the market, the Trust continued to pay the utilities, but Sharon paid her own living expenses, including internet and groceries.
[¶15] Because neither of the Trustees resided in Arizona, they asked Sharon to help them find a realtor to sell the Arizona property. Sharon interviewed several realtors, and the Trustees...
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