May v. Lubinski
| Decision Date | 29 May 2013 |
| Docket Number | C.A. No. 26528 |
| Citation | 2013 Ohio 2173 |
| Parties | JOSEPH H. MAY, et al. Appellants/Cross-Appellees v. RICHARD G. LUBINSKI, et al. Appellees/Cross-Appellants |
| Court | Ohio Court of Appeals |
APPEAL FROM JUDGMENT
ENTERED IN THE
COURT OF COMMON PLEAS
COUNTY OF SUMMIT, OHIO
CASE No. CV 2011 01 0101
DECISION AND JOURNAL ENTRY
{¶1} Appellants/Cross-Appellees, Joseph May, and numerous residents of Silver Lake Estates (collectively, "the Owners"), appeal from the judgment of the Summit County Court of Common Pleas. Additionally, Appellees/Cross-Appellants, Richard Lubinski, and members of the Silver Lake Estates Board of Trustees (collectively, "the Trustees"), cross-appeal from the trial court's judgment. This Court affirms in part and reverses in part.
I
{¶2} In 1920, a trust agreement was created covering property in the Silver Lake Estates located in Summit County, Ohio. The trust agreement contains various provisions, including details about who may serve as a trustee, the duties of the trustees, and what expenses may be assessed to the property owners.
{¶3} In 2010, property owners in Silver Lake Estates received notice of a special assessment from the Trustees. The special assessment was to cover the costs of variousrenovations and improvements to the trust property, the estimated cost of which, according to the Owners, totaled more than one million dollars. The proposed project was later withdrawn.
{¶4} The Trustees had spent years planning and preparing for the improvement project, but at no time sought the approval of the property owners. According to the Trustees, the trust agreement granted them the authority to make any improvements to the trust property at their discretion and to assess the property owners for such improvements. The Owners, who are a group of property owners in Silver Lake Estates, disagreed with the Trustees' interpretation of the trust agreement and filed a complaint seeking a declaratory judgment. Among other things, the Owners sought a declaration of: (1) the power of the Trustees under the trust agreement to make capital improvements and mandatory assessments for the associated costs; (2) whether expenditures made by the Trustees exceeded their authority under the trust agreement; (3) whether the Trustees breached their fiduciary duty to the Owners; and (4) whether certain trustees were qualified to serve as trustees.
{¶5} The Owners filed a motion for partial summary judgment, reserving the claims for breach of fiduciary duty and unauthorized expenditure of monies. The Trustees filed a cross motion for summary judgment on all claims. In March 2012, the trial court granted in part and denied in part the Owners' motion and denied the Trustees' cross motion for summary judgment. This judgment left the claims for breach of fiduciary duty and unauthorized expenditure of monies unresolved.
{¶6} Subsequently, the Trustees filed a "motion for clarification of the March 8, 2012 judgment entry." In June 2012, the court issued another judgment defining "extraordinary improvement" as set forth in the trust agreement and granting the Trustees' motion for summary judgment on the breach of fiduciary duty claim.
{¶7} The Owners now appeal and raise three assignments of error for our review. Additionally, the Trustees appeal and raise two assignments of error. To facilitate the analysis, we rearrange the assignments of error.
II
The Trustees' Assignment of Error Number One
THE TRIAL COURT ERRED IN REWRITING THE TRUST TO REACH A RESULT NOT INTENDED BY THE SETTLORS AND GRANTING PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT AND DENYING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT ACCORDINGLY.
{¶8} In their first assignment of error, the Trustees argue that the court erred in granting the Owners' partial motion for summary judgment based on an erroneous interpretation of the language of the trust. Specifically, the Trustees argue the plain language of the trust "provides [them] with the authority to make improvements, including the express authority to erect buildings on the Trust property."
{¶9} This Court reviews an award of summary judgment de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105 (1996). To prevail on a motion for summary judgment, the moving party must show:
(1) there is no genuine issue of material fact; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion when viewing evidence in favor of the nonmoving party, and that conclusion is adverse to the nonmoving party.
Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327 (1977).
{¶10} The determination of the meaning of disputed language in a trust is a question of law. Arnott v. Arnott, 132 Ohio St.3d 401, 2012-Ohio-3208, ¶ 14. "A court's purpose in interpreting a trust is to effectuate, within the legal parameters established by a court or by statute, the settlor's intent." Id., quoting Domo v. McCarthy, 66 Ohio St.3d 312 (1993),paragraph one of the syllabus. "Interpreting a trust is akin to interpreting a contract * * *." Arnott at ¶ 14. Therefore, the trust must be read as a whole to discern the intent of the settlor. See Saunders v. Mortensen, 101 Ohio St.3d 86, 2004-Ohio-24, ¶ 16.
{¶11} When the language of the trust agreement is not ambiguous, "intent can be ascertained from the express terms of the trust itself." Domo at 314. "Any words used in the trust are presumed to be used according to their common, ordinary meaning." In re Trust of Brooke, 82 Ohio St.3d 553, 557 (1998).
Prior Practices
{¶12} The Trustees acknowledge that the language of the trust agreement is unambiguous. However, the Trustees argue that, if we were to conclude that ambiguity exists, the prior practices of the Trustees support their interpretation. The trial court found that the language of the trust agreement was unambiguous, and therefore, it did not consider extrinsic evidence in reaching its interpretation.
{¶13} "Unless the terms of a trust are found to be ambiguous, no extrinsic evidence will be admitted to interpret the trust provisions." Robinson v. Beck, 9th Dist. No. 21094, 2003-Ohio-1286, ¶ 10. "The mere absence of a definition * * * does not make the meaning of [a] term ambiguous. Nationwide Mut. Fire Ins. Co. v. Guman Bros. Farm, 73 Ohio St.3d 107, 108 (1995). A court must give undefined words their plain and ordinary meaning. In re Trust of Brooke at 557. "[A]mbiguity is defined as the condition of admitting of two or more meanings, of being understood in more than one way, or of referring to two or more things at the same time." (Internal quotations and citations omitted.) Robinson at ¶ 25.
{¶14} After a careful review of the trust document, we conclude that the language is not ambiguous. As such, we will limit our review to the language of the trust document itself and will not consider the extrinsic evidence of the prior practices by the Trustees.
{¶15} The Trustees argue that the language of the trust gives them the express authority to make any improvements they deem necessary, which includes the ability to erect new buildings without the consent of the property owners. In support of their position, the Trustees rely on the language in Section 3 of the trust, which provides:
The trustees shall collect money from the lot owners as herein provided, and from the sums so collected, and from any other moneys coming to their hands, shall pay taxes and assessments on said lands as they become payable; shall keep the weeds and grass cut, and trees, shrubbery and flower beds on said lands in good condition; shall provide for removal of snow and ice when necessary; shall keep the pavilion on Block "A" and any and all other buildings erected by them, stairways, private roadways and sidewalks in repair; shall establish regulations for the use of, and provide for proper policing of private roads, lanes, parks and pavilion; and generally maintain all of said property in good order and condition for the use of lot owners in said allotment or allotments; provided that the maintenance and repair of said buildings be in the discretion of the said trustees and the said trustees shall have the power in their discretion to remove any of the said buildings, but in no event shall said trustees permit said buildings from lack of either maintenance or removal, to become unsightly objects and detrimental to the allotment.
(Emphasis added.) The Trustees rely specifically on the section in bold as support for their express authority to erect new buildings at their discretion.
{¶16} On the other hand, the Owners argue that this section merely requires the Trustees to maintain in good repair all buildings owned by the trust and does not grant authority to the Trustees to build new buildings. The trial court agreed and found that, under Section 3 of the trust, the Trustees "have authority and discretion with respect to the general maintenance, repair, and upkeep of the Trust property * * * [and] are also authorized * * * to 'remove' buildings,[however,] this section is silent with respect to erecting new buildings and/or making extraordinary improvements." We agree with the trial court's interpretation.
{¶17} Section 3 details the duties of the Trustees to maintain the property. This section does not discuss the authority of the Trustees (or of the Owners for that matter) to build new buildings. Reading the plain language of the trust, we cannot conclude that Section 3 provides any express authority to build new buildings. While the section does require the Trustees to keep all buildings "erected by them" in repair, this sentence cannot be fairly read to grant the Trustees an express authority to build new buildings at their discretion.
{¶18} The Trustees argue that Section 4 of the trust provides an additional method for improvements to the trust property, but does not limit the Trustees'...
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