Newcomer v. Roan, No. WM–14–007.

CourtUnited States Court of Appeals (Ohio)
Writing for the CourtJENSEN, P.J.
Citation56 N.E.3d 408
Decision Date12 February 2016
Docket NumberNo. WM–14–007.
Parties David C. NEWCOMER, in his capacity as Trustee of the Revocable Trust Agreements of Betty S. Strickland, Appellee v. Ann ROAN, et al., Appellants/Cross–Appellees and Thomas Levenson, Appellee/Cross–Appellant.

56 N.E.3d 408

David C. NEWCOMER, in his capacity as Trustee of the Revocable Trust Agreements of Betty S. Strickland, Appellee
v.
Ann ROAN, et al., Appellants/Cross–Appellees
and
Thomas Levenson, Appellee/Cross–Appellant.

No. WM–14–007.

Court of Appeals of Ohio, Sixth District, Williams County.

Feb. 12, 2016.


56 N.E.3d 411

James R. Jeffery, Toledo, for appellee.

56 N.E.3d 412

Timothy A. Shimko, Cleveland, for appellants/cross-appellees.

William T. Maloney and Sarah A. McHugh, for appellee/cross-appellant.

JENSEN, P.J.

{¶ 1} This case is before the court upon an appeal filed by Ann, Steven, and Kerry Roan (collectively, “the Roans”), and a cross-appeal filed by Thomas Levenson (“Tom”). The Roans and Tom were named as defendants in the underlying action filed by David Newcomer, the trustee of a trust created by Betty Strickland, Ann and Tom's mother. This case arises out of their disagreement over how that trust should be administered.

{¶ 2} The Williams County Court of Common Pleas issued judgments dated February 19, 2014 (decision on cross-motions for summary judgment), October 8, 2014 (judgment memorializing the court's decisions on the Roans' motions for directed verdict and entering its decision on the issues that proceeded to a verdict), and December 31, 2014 (decision denying the Roans' motion for permanent injunction and dissolving preliminary injunction). For the reasons that follow, we affirm the February 19, 2014 judgment; affirm, in part, and reverse, in part, the October 8, 2014 judgment; and affirm the December 31, 2014 judgment.

I. Background

{¶ 3} Betty Strickland was the daughter of one of the two founders of the Spangler Candy Company in Bryan, Ohio. She married Neil Levenson and together they adopted Ann in 1952, and three years later, Tom. In the 1980s, Betty and Neil moved to Vero Beach, Florida, where they lived most of the year; they spent their summers in Bryan, Ohio. Neil died in 1992. Betty remarried Harold Strickland, who died in 1997.

{¶ 4} Betty and Neil owned a substantial number of shares in Spangler Candy Company. They wanted future generations to remain invested in the company. Apparently apprehensive about their children's ability to manage money and concerned that they may not retain the shares, Neil created a revocable trust on June 12, 1991, the effect of which was to hold the Spangler Candy shares in trust and provide Ann and Tom with income on the shares. Following Ann and Tom's deaths, ownership of the shares would pass outright to their children. Ann and her husband, Steven Roan, had one son, Kerry. Tom had no children.

A. Betty Executes a Number of Trust Documents

{¶ 5} On October 28, 1991, Betty executed a revocable trust agreement which contained substantially the same terms as the trust executed by Neil. She executed a number of amendments and restatements in the years that followed. The following table chronologically lists the various trust documents Betty executed.

October 28, 1991 Revocable Trust Agreement
March 20, 1998 Restatement of the Betty S. Strickland Revocable Trust Agreement
April 22, 1998 First Amendment to the Betty S. Strickland Trust Agreement
April 20, 1999 Second Restated Exhibit A to the Restatement of the Betty S. Strickland Trust Agreement
August 29, 2000 First Amendment to the Second Restated Exhibit A to the First Restatement of the Betty S. Strickland Trust Agreement
March 4, 2002 Second Amendment to the Second Restated Exhibit A to the Restatement of the Betty S. Strickland Trust Agreement
July 25, 2003 Addendum to Trust Agreement Dated October 28, 2001
October 20, 2003 Third Complete Restatement of the Revocable Trust Agreement of Betty S. Strickland
August 24, 2006 Second Amendment to the Betty S. Strickland Trust Agreement
56 N.E.3d 413

{¶ 6} The March 20, 1998 document completely superseded the October 28, 1991 trust. The provisions for the disposition of the Spangler Candy stock were contained in an exhibit A. Like the October 28, 1991 trust, it provided for the payment of income on the Spangler Candy stock to Betty's children, and provided for the eventual disposition of the shares outside the trust to Betty's grandchildren.

{¶ 7} The April 22, 1998 document appointed a co-trustee, but otherwise restated the March 20, 1998 trust.

{¶ 8} The April 20, 1999 document restated exhibit A to provide, in paragraph A, that shares gifted to or held in trust for Tom's then-wife, Karon, would equal the number of shares gifted to or held in trust for Steven.

{¶ 9} The August 29, 2000 document revoked paragraph A of exhibit A, and inserted no new provision in its place. This change was precipitated by Tom and Karon divorcing. Confusingly, it then ratified the October 28, 1991 document despite the fact that it had been superseded by the March 20, 1998 document.

{¶ 10} The March 4, 2002 document added a new paragraph A, which the parties refer to as the equalization provision. It sought to ensure that Ann and Tom received an equal number of shares of Spangler Candy stock.

{¶ 11} The July 25, 2003 document appointed Betty's Bryan, Ohio attorney, David Newcomer, to be her successor trustee.

{¶ 12} The last two documents that Betty executed are at the heart of the parties' disagreement.

{¶ 13} The October 20, 2003 document was drafted by Betty's Florida counsel, Todd Fennell. It acknowledged the existence of each of the documents previously executed by Betty and restated Betty's entire trust. It distributed Betty's trust estate to her living descendants “outright and free of trust,” thereby eliminating any remainder interest to her grandson.

{¶ 14} The August 24, 2006 document was drafted by Newcomer. It acknowledged the existence of the October 28, 1991 trust agreement and the documents dated March 20, 1998, and April 22, 1998, but made no mention of the existence of the October 20, 2003 restatement or any of the other documents. It purported to change provisions that corresponded to the March 20, 1998 agreement. It made two changes, referred to as Item One and Item Two. Item One appointed Newcomer to replace Betty as trustee. Item Two “restate[d] and reaffirm[ed] each and every paragraph of said Restatement of Trust dated April 22, 1999.”

{¶ 15} Betty died in Florida on March 30, 2011, at age 93. Her trust became irrevocable at that point. Within 60 days of becoming irrevocable, Fla.Stat. 736.0813 required her trustee to give notice to the beneficiaries of the trust's existence, the identity of the settlor, the right to request a copy of the trust instrument, and the right to an accounting. In accordance with this requirement, Fennell's partner, attorney Anthony Guettler, mailed to Ann and Tom on May 31, 2011, a notice of acceptance of appointment as successor trustee and related trust disclosures and a copy of the October 20, 2003 trust agreement. The notice, signed by Newcomer, indicated that Betty had served as trustee until her death, thus suggesting that Fennell

56 N.E.3d 414

and Guettler were unaware of the existence of the August 24, 2006 amendment drafted by Newcomer and executed by Betty in Ohio.

B. Lawsuits Are Filed

{¶ 16} Ann retained Florida counsel, inquiring about the possibility of setting aside the October 20, 2003 trust due to either a lack of capacity by Betty or undue influence by Tom. The existence of the August 24, 2006 document eventually came to her attorney's attention. In a letter to Ann dated April 13, 2012, counsel raised the possibility of arguing that the effect of the August 24, 2006 amendment was to revoke the October 20, 2003 trust agreement. Counsel communicated this theory to Newcomer in a letter dated May 12, 2012.

{¶ 17} On May 25, 2012, Newcomer, as trustee, filed a declaratory judgment action in the Williams County Court of Common Pleas seeking an order determining which trust agreement was the valid last trust agreement. In his complaint, he alleged that the April 22, 1999 date that appeared in the August 24, 2006 amendment was a typographical error and that April 20, 1999, was the date that should have been referenced in the August 24, 2006 amendment.

{¶ 18} The Roans answered and counterclaimed, alleging that the August 24, 2006 amendment revoked the October 20,...

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