Ludwig v. AmSouth Bank of Florida

• Decision Date: 08 January 1997
• Docket Number: No. 95-04769,95-04769
• Citation: 686 So.2d 1373
• Parties: 22 Fla. L. Weekly D200 Evelyn L. LUDWIG, individually, and as Personal Representative of the Estate of Adrain Robert Ludwig, deceased, Appellant, v. AMSOUTH BANK OF FLORIDA, f/k/a The First National Bank of Clearwater, and John Fisher Ludwig, Appellees.
• Court: Florida District Court of Appeals

Page 1373

686 So.2d 1373

22 Fla. L. Weekly D200

Evelyn L. LUDWIG, individually, and as Personal Representative of the Estate of Adrain Robert Ludwig, deceased, Appellant, v. AMSOUTH BANK OF FLORIDA, f/k/a The First National Bank of Clearwater, and John Fisher Ludwig, Appellees.

No. 95-04769.

District Court of Appeal of Florida,

Second District.

Jan. 8, 1997.

Merritt A. Gardner and Anthony T. Leon of Gardner, Wilkes, Shaheen & Candelora, Tampa, for Appellant.

Harry S. Cline of Macfarlane Ausley Ferguson & McMullen, Clearwater, for Appellee AmSouth Bank of Florida.

Kent J. Anderson of Anderson, Morgan & Tjaden, P.A., Sarasota, for Appellee John Fisher Ludwig.

Cynthia I. Rice and Theo J. Karaphillis of Richards, Gilkey, Fite, Slaughter, Pratesi & Ward, P.A., Clearwater, Guardian Ad Litem for Kimberly E. Ludwig and Ryan F. Ludwig, minors.

PER CURIAM.

Evelyn L. Ludwig, as personal representative of the Estate of Adrain Robert Ludwig (Robert's Estate), appeals an order providing certain instructions concerning trusts created by Robert's grandparents. The trial court held that the rule against perpetuities did not require the trustee to distribute the corpus of the two trusts at any time prior to Robert's death. The order eliminated any claim that Robert's Estate might have to the trusts and is appealable by Robert's Estate. Fla. R.App. P. 9.110(k). We affirm the trial court's decision that the trusts survived Robert and that his estate had no claim to either trust. We decline to reach any of the trial court's other rulings affecting the remaining parties because additional issues are unresolved in the trial court.

Adrain R. Fisher and Grace M. Fisher were husband and wife. On November 14, 1963, when they were approaching retirement, they executed a trust instrument entitled Fisher Trust No. II. This trust instrument actually created two trusts. Trust A (Mr. Fisher's trust) contained property from Mr. Fisher and provided that the income from this property would be distributed to Fisher Trust No. I during his lifetime. The terms of Fisher Trust No. I are not disclosed in this record, but it appears that this trust was created about 18 months before Trust No. II. Trust B (Mrs. Fisher's trust) contained property from Mrs. Fisher and provided that the income from this property would be distributed to her during her lifetime.

Initially, Article III of Fisher Trust No. II provided that Mr. Fisher's trust, Trust A, would terminate upon his death with the corpus being paid to Fisher Trust No. I after the trustee paid the debts and expenses of his estate. Article III contained a similar provision for Mrs. Fisher's trust. The Fisher Trust No. II reserved the settlors' right, at least jointly, to modify or terminate the trusts.

On May 18, 1970, the couple amended the trust instrument for Fisher Trust No. II. They deleted the simple termination provisions in Article III and added two similar complex provisions with several subsections. Subsection (b) provided that Mr. Fisher's trust, Trust A, would remain in existence after his death and would distribute income and principal for the benefit of the Fishers' two grandsons, Adrain Robert Ludwig (Robert) and John Fisher Ludwig (John). ¹ The The couple amended the trust instrument again on July 30, 1973. This amendment did not affect the distribution upon their deaths, but specified that the income from Mr. Fisher's trust, Trust A, during his life should be distributed to the two grandsons or "all to the survivor of them." ³

amendment further provided that distributions could be made to or for the benefit of each grandson's descendants. The amendment contained no provision expressly terminating the trust on a specific date or event. Instead, it contained a lengthy clause, subsection (d), that is a combination termination/savings clause. ² This clause explained that, if the trust violates the rule against perpetuities, "on the date limited by such rule" the trustee should distribute the corpus of Trust A: (1) to the two grandsons equally; or, (2) if one of them is deceased, his half is distributed to his descendants per stirpes; or, (3) if one of them is deceased and leaves no descendants, to the other grandson or his descendants; or, (4) if both are deceased and leave no descendants, then to various residual beneficiaries. Mrs. Fisher's trust, Trust B, was similarly amended.

Mr. Fisher died on December 18, 1976, and Mrs. Fisher died on March 6, 1984. Less The trustee, AmSouth Bank, concerned about the effect of Robert's death on the proper construction of Trust A, filed a petition for instructions as authorized by section 737.201(1)(c), Florida Statutes (1993). Robert's Estate argued that Trust A should properly have been terminated when Mr. Fisher died in 1976, and Trust B should have been terminated when Mrs. Fisher died in 1984. This interpretation would require the corpus of the two trusts to be distributed equally to John and Robert's Estate because both grandsons were living in 1984. Thus, this interpretation would provide substantial proceeds to Robert's Estate and indirectly to his surviving spouse, Evelyn L. Ludwig. On the other hand, John maintains that the trust is valid and should continue after his death for the period permitted by the rule against perpetuities. This interpretation would leave any corpus for distribution to someone other than either of the grandsons on some future date. ⁵

than 21 years after these deaths, Robert died on October 12, 1993, without lineal descendants. John Fisher Ludwig is still living and has two children. ⁴

Both Robert's Estate and John moved for judgment on the pleadings or summary judgment. The trial court correctly concluded that the matter was ripe for resolution without an evidentiary hearing. It determined that John is the life in being for purposes of the rule against perpetuities and concluded that both Mr. Fisher's trust, Trust A, and Mrs. Fisher's trust, Trust B, should continue for 20 years and 364 days after John's death. For purposes of this appeal, it is important only that the trial court found that the trusts should continue beyond the date of Robert's death.

On appeal, the parties have provided thorough arguments addressing the possible ambiguity of the distribution/savings clause. Because of the issue before us at this time, we can take a somewhat narrower approach than that taken by the trial court. There is no question that both trusts were revocable at least until Mr. Fisher's death in 1976. Thus, from the most conservative view, the period for vesting required under the rule of perpetuities did not begin until his death. Cook v. Horn, 214 Ga. 289, 104 S.E.2d 461 (1958); Ryan v. Ward, 192 Md. 342, 64 A.2d 258 (1949); Thomas F. Bergin and Paul G. Haskell, Preface to Estates in Land and Future Interests 212 (1966). See also 70 C.J.S. Perpetuities § 41 (1987) (explaining that rule against perpetuities does not prescribe any limitation on duration of validly created trust as long as interest vests within period prescribed by rule). Article III(1)(b) of the trust clearly provided a vested life interest for the two grandsons following the deaths of their grandparents. Thus, if the savings portion of clause (d) was effective even using Mr. Fisher's death as the starting point for the rule, Robert's Estate was entitled to no interest in these trusts.

The rule against perpetuities is a rule of property law, not a rule of construction. Roemhild v. Jones, 239 F.2d 492 (8th Cir.1957); Estate of Schmitz, 214 Neb. 28, 332 N.W.2d 666 (1983); 61 Am.Jur.2d Perpetuities, etc. § 8 (1981). The savings clause in the trust, however, was an attempt to...