Russell Family Trust v. Estate of Russell
| Decision Date | 04 June 2015 |
| Docket Number | NO. 32,629,NO. 32,730,32,629,32,730 |
| Parties | IN THE MATTER OF THE RUSSELL FAMILY TRUST, and SHARON RUSSELL, Plaintiff-Appellant, v. ESTATE OF DIANA RUSSELL and TRACY BELCHER, as trustee of the RUSSELL FAMILY TRUST, Defendants-Appellees. |
| Court | Court of Appeals of New Mexico |
This memorandum opinion was not selected for publication in the New Mexico Appellate Reports. Please see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions. Please also note that this electronic memorandum opinion may contain computer-generated errors or other deviations from the official paper version filed by the Court of Appeals and does not include the filing date.
APPEAL FROM THE DISTRICT COURT OF ROOSEVELT COUNTY
Eric Dixon Attorney & Counselor at Law, P.A.
Eric D. Dixon
Portales, NM
for Appellant
Doerr & Knudson, P.A.
Stephen E. Doerr
Portales, NMfor Appellee Estate of Diana Russell
Greig & Richards, P.A.
William H. Greig
Clovis, NM
for Appellee Tracy Belcher
{1} Plaintiff Sharon Russell appeals the district court's judgment involving two separate causes of action involving the Russell Family Trust (the Trust) that have been consolidated on appeal. We affirm.
{2} The Trust was created by Dorothy Russell and Wiley Russell in 1992. Pursuant to the terms of the Trust, when Wiley Russell died in 2000, the Trust was split into an "A" trust (Trust A) and a "B" trust (Trust B).1 Trust A was a revocable trust of whichDorothy was the settlor, trustee, and life beneficiary. Trust B was an irrevocable trust of which Dorothy was the trustee and life beneficiary, but not the settlor. Dorothy's two daughters, Sharon Russell (the Plaintiff in this case) and Diana Russell, were initially designated successor co-trustees of Trust A and Trust B.
{3} However, due to "serious and irreconcilable disharmony" between Sharon and Diana, Dorothy amended Trust A in 2005 to remove Sharon and Diana as successor co-trustees and replace them with two independent successor trustees. Because Trust B was irrevocable, Dorothy filed an action in the district court in 2005 to replace Sharon and Diana as successor co-trustees for Trust B with the same two independent successor trustees. We refer to this action as "the 2005 case." In January 2006, the district court entered an order in the 2005 case removing Sharon and Diana as successor co-trustees for Trust B and replacing them with the two independent successor trustees.
{4} About nine months later, one of these independent successor trustees resigned. Dorothy continued to function as the trustee of the Trust until she died in November 2010. About a month after Dorothy died, the second independent successor trustee, who became the acting trustee upon Dorothy's death, informed the beneficiaries that he wished to resign. Before resigning, he designated Tracy Belcher, a local certified public accountant, to serve as the successor trustee.
{5} In January 2012, Sharon and her children2 filed a petition in the 2005 case for an accounting of the Trust and to remove Ms. Belcher as trustee, asserting breaches of fiduciary duties and trust mismanagement. In March 2012, Diana learned of Sharon's petition and filed a "Motion to Dismiss" it for lack of subject matter jurisdiction. A few days later, Diana opened a new cause of action, asking the district court to order that her share of the trust assets be distributed to her (the 2012 case). Ms. Belcher, Sharon, and Diana then filed several documents in both cases that are not relevant to this appeal.
{6} Although the district court had not formally consolidated the 2005 and 2012 cases, it held a joint hearing on matters pending in both cases on July 23, 2012, and entered an order on August 7, 2012 (the August 2012 order). As to matters between Sharon and Ms. Belcher, the district court ordered the parties to "attempt, in good faith, to meet and negotiate a resolution of all issues pending in this proceeding" or else it would order a formal mediation. As to Diana's petition for distribution of the trust assets, the district court entered an order stating that the parties agreed that Dianawas entitled to a distribution of 40% of the assets in Trust A and 50% of the assets in Trust B, that Diana had no claims against Ms. Belcher, and that Sharon requested a portion of Diana's share of Trust A be held pending resolution of Sharon's claims against Ms. Belcher.
{7} The district court also ordered that Randall Burnett, another certified public accountant, serve as trustee of the Trust; that Mr. Burnett distribute to Diana her share of the Trust assets, except for a sum agreed to by the parties to be held until Sharon's claims against Ms. Belcher were resolved; that the parties would have two weeks to negotiate a distribution of the real property assets in the Trust that would allow Mr. Burnett to distribute Diana's share; and, that if the parties could not agree to these matters, the district court would hold a hearing as soon as possible to resolve them.
{8} About a month later, on August 28, 2012, Diana died. Her estate was substituted as a party in the proceedings. Three days after Diana's death, Sharon filed an emergency motion in the 2005 and 2012 cases. In this motion, Sharon asked the district court to "immediately stay trust distribution" due to Diana's death and the suspicious circumstances and police investigation surrounding her death. The motion also asked that Diana's home "be placed under control" of the court-appointed trustee Mr. Burnett and that "no one be allowed in the home until such time as aninvestigation can be completed." (Emphasis added.) Finally, the motion asked that any of the Trust assets that had previously been distributed to Diana "be placed with the [c]ourt or back into the [T]rust until further order of the court." About ten days after Diana's death, Sharon filed another motion, asking the district court to modify the distribution of the Trust. In this motion, Sharon asserted that Diana's share had lapsed due to her death without surviving issue and that the trust settlors "intended their hard-earned life-long accumulated family assets to STAY within their family."3 Sharon asked the district court to order the trustee to distribute all of the Trust assets to the "remaining beneficiaries"—Sharon and her children.
{9} Ms. Belcher and Diana's estate opposed Sharon's motions. Diana's estate asserted that the new motions were "without valid factual or legal basis[,]" a "malicious abuse of process[,]" and asked for an award of attorney fees and costs for defending against the motions. Sharon then moved to strike the Notice of Substitution of Party filed by Diana's estate as "premature[,]" asking that it be "dismissed or, in the least, held in abeyance pending the outcome of the probate matters [involving Diana's estate]."
{10} The district court held a hearing on the pending motions on October 9, 2012. We describe the relevant details of this hearing more fully in our discussion below. After the hearing the district court entered a written order on October 29, 2012 (the October 2012 order). As to the distribution of Diana's share of the Trust assets to her estate, the October 2012 order stated, in relevant part, that:
As to Sharon's claims against Ms. Belcher, the October 2012 order stated, in pertinent part, that:
Mr. Burnett prepared his proposed distribution of assets and delivered this proposal to the parties and the district court. The record shows that Sharon did not file any pleadings challenging Mr. Burnett's proposal for distribution of the assets.
{11} On December 18, 2012, a new attorney filed an appearance as co-counsel on behalf of Sharon and moved to continue the December 19, 2012 hearing...
To continue reading
Request your trial