Masek v. Masek (In re Charles & Patricia Masek Family Tr.)
| Citation | 312 Neb. 94 |
| Decision Date | 29 July 2022 |
| Docket Number | S-21-552 |
| Parties | In re Charles and Patricia Masek Family Trust. v. Mark Masek and Dianne Yahiro, appellants. Barry Masek, individually and as Administrator of the Estate of Patricia Masek, deceased, appellee, |
| Court | Supreme Court of Nebraska |
1. Trusts: Equity: Appeal and Error. Trust administration matters are reviewed for error appearing on the record absent an equity question or question of law, which are instead reviewed de novo.
2. Judgments: Appeal and Error. For errors appearing on the record, the inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable.
3. Statutes: Appeal and Error. Statutory interpretation presents a question of law, for which an appellate court has an obligation to reach an independent conclusion irrespective of the decision made by the court below.
4. Trusts: Liability. A beneficiary is not personally liable to a trust unless an exception applies. One such exception includes instances where the trust suffered a loss resulting from a breach of trust in which the beneficiary participated.
5. Trusts. A beneficiary participates in a breach of trust if the beneficiary performs, or joins in performing, an act the beneficiary knows is a breach. Mere knowledge of, or consent to, the breach, without more, is insufficient to constitute participation.
6. Trusts: Liability. A person is a de facto trustee, and can be liable for breach, where the person has (1) assumed the office of trustee under a color of right or title and (2) exercised the duties of the office.
Appeal from the County Court for Gage County: Steven B. Timm and Linda A. Bauer, Judges. Reversed and remanded for further proceedings.
Matt Catlett, of Law Office of Matt Catlett, for appellants.
Douglas W. Ruge II for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik and Freudenberg, JJ.
In October 2020, the Gage County Court found that Mark Masek and Dianne Yahiro (Dianne), appellants, had committed breach of trust and had taken trust assets, and it ordered damages against appellants by default judgment. Appellants filed a special appearance and motion for new trial on the issues of lack of personal jurisdiction, insufficiency of process, and insufficiency of service of process under Neb. Rev. Stat. § 25-516.01 (Cum. Supp. 2020). Appellants additionally alleged the eight enumerated grounds for new trial as provided by Neb. Rev. Stat. § 25-1142 (Reissue 2016).
On June 7, 2021, the county court denied appellants' motion, finding that proper notice had been given to them; that the court had personal jurisdiction over them; and that, in the alternative, appellants had otherwise waived the right to challenge personal jurisdiction by requesting a new trial. The county court also found that appellants did not establish any statutory grounds for a new trial under § 25-1142. Appellants filed an appeal, at which time we moved this case to our docket.
Because the county court did not explain its basis for finding appellants liable for breach of trust, we reverse, and remand for further proceedings.
Charles and Patricia Masek created the Charles and Patricia Masek Family Trust in 1993 (Family Trust). The trust named Charles and Patricia as initial cotrustees and provided that upon death, resignation, or disability of either grantor, the remaining grantor would become the sole trustee. The Family Trust also provided that upon the death of either grantor, the trust would become irrevocable and any assets placed in the trust would be divided between a marital share and a family share. Upon the death of both grantors, the family share would consist of all assets remaining in the trust estate. The Family Trust declared that Charles and Patricia had five living children: Barry Masek, Mark, Dianne, Colleen Masek (now known as Colleen Eames), and Richard Masek. The Family Trust named three of the living children-Barry, Mark, and Dianne-as successor cotrustees.
Upon Charles' death in 2000, Patricia became the sole trustee, the Family Trust became irrevocable, and the property within the trust estate was divided into the marital and family shares. Patricia registered the Family Trust in Gage County, Nebraska, in November 2000 and petitioned the court to amend the Family Trust to provide that all five of her children be cotrustees. All five children signed their approval of this amendment, which was approved by the court in December 2000. That same month, Patricia granted an interest in several hundred acres of farmland to her children. The Masek children then formed the Masek Children's Trust (Children's Trust) and placed the land into the Children's Trust. The Children's Trust specified that in the event the Family Trust was depleted prior to Patricia's death, the trustee of the Children's Trust could draw upon trust assets to care for and benefit Patricia.
Around 2014, appellants moved Patricia and Richard, who had special needs and could not live on his own, to Illinois to live with Dianne. By this time, Patricia had reportedly been diagnosed with progressive dementia and Alzheimer's disease. According to siblings Barry and Colleen, appellants moved Patricia and Richard without first informing Barry and Colleen of the move.
In October 2015, Colleen filed a petition to remove Patricia as trustee of the Family Trust, alleging that Patricia was unable to administer the trust effectively. Colleen further asked the court to remove all successor cotrustees and appoint a qualified corporate fiduciary as successor trustee. Colleen stated that she believed it would be impossible for all currently named successor cotrustees to agree due to a separate and then-pending action regarding the Children's Trust.
In May 2016, the court found that the interests of justice did not require court intervention; that the terms of the trust prevailed, which required certain procedures be done to find Patricia unfit to be trustee; and that such terms had not been fulfilled. As a result, Patricia was not removed as trustee.
Within a year after Patricia and Richard were moved to Illinois, the relationship between Barry and Colleen on one hand and appellants on the other, which had not been harmonious to begin with, further deteriorated. Barry and Colleen claim they were barred from communicating with Patricia and Richard, despite their best efforts, for a period of almost 5 years. Colleen filed an action for guardianship in Illinois to locate Patricia. Despite an Illinois court order demanding that Patricia be produced, Patricia was not produced and the court issued a warrant to locate Patricia.
In December 2019, Barry and Colleen filed a joint petition for accounting in Gage County, alleging that they had not received an accounting from Patricia as trustee since January 2014. Hearings regarding this petition were scheduled for March 12, 2020. A copy of this petition and the notice of hearing was emailed to Brian Koerwitz as counsel for Dianne, Mark, and Richard and to Christopher Bartling as counsel for Patricia. Koerwitz filed a motion to withdraw as counsel, which was granted on January 13.
On February 28, 2020, Bartling filed a motion to withdraw as counsel for Patricia. Bartling stated that he had attempted to contact Patricia without success; that he had not directly communicated with Patricia since 2016; and that Mark, as durable power of attorney for Patricia, had requested Bartling withdraw as counsel.
In early March 2020, Barry was contacted by an Illinois police department. Richard had died on March 1, and Dianne and her husband had brought Richard's body to a crematory so that Patricia could give consent to cremate Richard. The crematory contacted the police, who then contacted Barry and Colleen.
On March 6, 2020, an Illinois circuit court issued an order in which it found an emergency basis existed for the appointment of a temporary guardian for the estate and person of Patricia for reasons including, but not limited to, concerns expressed by a detective about Patricia's safety, Dianne's failure to appear or produce Patricia despite court order, Dianne's failure to present Patricia for a visit with her guardian ad litem, and the fact that Patricia was hospitalized with signs of bruising. The Illinois court then named Barry as temporary guardian for a duration of 60 days, which would expire May 5.
In her response to Bartling's motion to withdraw as counsel, Colleen notified the Gage County Court of these Illinois proceedings. Colleen alleged that Mark's power of attorney for Patricia had been suspended by the Illinois court.
At the March 12, 2020, hearing on Colleen's petition, Bartling informed the court that he had been unable to contact Patricia by any means. Colleen's counsel responded that Bartling should not be allowed to withdraw at that time, due to the ongoing guardianship proceedings in Illinois, and provided further detail to the court of recent events. The county court took the matter under advisement and set a further hearing on the matter of withdrawal for May 18.
Also during this March 12, 2020, hearing, Benjamin Murray, counsel for appellants in litigation concerning the Children's Trust, was present in the courtroom and was addressed by the court. When addressed, Murray specified that he was "not on the [F]amily [T]rust," and only "on the [Children's [T]rust." A separate hearing concerning the Children's Trust began immediately after the conclusion of this hearing.
On May 11, 2020, Barry filed a motion to amend the pleadings. On May 18, Bartling was granted withdrawal after the court noted that a guardian had been appointed for Patricia ...
To continue reading
Request your trial