Salem United Methodist Church v. Bottorff

• Decision Date: 14 July 2004
• Docket Number: No. 25622.,25622.
• Citation: 138 S.W.3d 788
• Parties: SALEM UNITED METHODIST CHURCH and Salem Public Library, Plaintiffs-Respondents, v. Bill BOTTORFF and Jacqueline Bottorff, Defendants-Appellants, Salem Nutrition Site, Linda Bottorff Wood, and Curtis Bottorff, Individually and as Trustee of the First Amended Arnold B. Bottorff Trust, Defendants.
• Court: Missouri Court of Appeals

138 S.W.3d 788

SALEM UNITED METHODIST CHURCH and Salem Public Library, Plaintiffs-Respondents, v. Bill BOTTORFF and Jacqueline Bottorff, Defendants-Appellants Salem Nutrition Site, Linda Bottorff Wood, and Curtis Bottorff, Individually and as Trustee of the First Amended Arnold B. Bottorff Trust, Defendants.

No. 25622.

Missouri Court of Appeals, Southern District, Division Two.

July 14, 2004.

Appeal from the Circuit Court, Dent County, J. Kent Howald, J R. Brooks Kenagy, Steelville, MO, for appellants.

W.H. Thomas, Jr., Emily Woodward, Rolla, MO, for respondents.

JEFFREY W. BATES, Judge.

The unusual issue presented in this appeal is whether a Missouri trust can be revoked by physical act, rather than by compliance with the method of revocation specified in the trust. This question arose because, after the settlor's death, all three signed copies of his amended trust were discovered with the distributive provisions torn from the documents. The trial court ruled that the amended trust was still valid because the evidence presented was insufficient to support the conclusion that the distributive provisions were torn out by the settlor with the intent to revoke the trust, and there was no proof of compliance with the specific method of revocation required by the terms of the amended trust. We affirm the trial court's judgment.

I. Standard of Review

In this court-tried case, our review is governed by Rule 84.13(d) and the principles articulated in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976).¹ We must affirm the trial court's judgment unless it is not supported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law. Bean v. Bean, 115 S.W.3d 388, 392 (Mo.App.2003). We review the evidence and all reasonable inferences in the light most favorable to the judgment and disregard all contrary evidence and inferences. Ketcherside v. McLane, 118 S.W.3d 631, 634 (Mo.App.2003). Credibility of the witnesses and the weight to be given to their testimony is for the trial court, which is free to believe none, part, or all of the testimony of any witness. Id. Our summary of the evidence, which is set forth below, has been prepared in accordance with these principles.

II. Facts and Procedural History

Arnold B. Bottorff ("Arnold") was born in Dent County, Missouri. His parents resided in Salem, Missouri.² Arnold went to school in Springfield, Missouri, and then attended the National University in Mexico City. Thereafter, he taught school in Alton, Missouri, and in California and Colorado. In the early 1970's, Arnold returned to live in Dent County and built a house east of Salem, where he lived for about 10 years. In the early 1980's, he moved into a mobile home near the Baptist church in Salem. Arnold never married and had no children. His relatives included two brothers, Bill Bottorff ("Bill") and James A. Bottorff ("James"); one niece, Linda Bottorff Wood ("Linda"); and one nephew, Curtis Bottorff ("Curtis"). Curtis is Bill's son.

On April 24, 1995, Arnold created a revocable trust agreement by executing trust documents prepared by Salem attorney Mark Weaver ("Weaver"). Arnold was the trust's grantor and trustee. Curtis was named successor trustee. As grantor, Arnold transferred to himself as trustee items of property listed in a schedule attached to the trust. The schedule included a number of parcels of real property and personal property described as "Certificates of Deposit, Stocks and Bonds, Household furnishings [and] Bank accounts." Also attached was an assignment of tangible personal property executed by Arnold as trustee and an acceptance of same executed by him as trustee. Arnold reserved the right to amend or revoke the trust in Section 2.1, which stated:

Grantor, during his lifetime, expressly reserves the right and power, at any time and from time to time, to withdraw all or any part of the property then constituting the trust, to amend any or all of its provisions or to revoke the trust in its entirety, provided, however, that any amendment shall be effected by a written instrument signed and acknowledged by Grantor which shall be delivered to the then acting Trustees, and provided further that the duties and responsibilities of the Trustees hereunder may not be changed without the prior written consent of the then acting Trustees.

Thus, no particular method had to be used to revoke the trust. The original trust contained the following distributive provisions: (1) $200,000 to the Salem United Methodist Church ("Church"), with one-half of the money reserved exclusively for the benefit of its music program; (2) $60,000 to the Salem Public Library ("Library"); (3) $5,000 to the Salem Nutrition Center ("Nutrition Center") for meal purposes; (4) $25,000 to Arnold's nephew, Curtis; (5) $20,000 to Arnold's niece, Linda; and (6) $20,000 to Arnold's brother, James. These cash distributions were to be made by liquidating trust assets, except for stocks and securities owned by the trust. The stocks and bonds were to be transferred to Curtis, Linda and James as tenants in common in equal one-third shares. If any trust assets remained after the cash distributions were made, the remainder was to be distributed in the same fashion as the stocks and bonds. The trust made no provision for Arnold's brother, Bill.

On the same date the original trust was created, Arnold executed his Last Will and Testament. The will contained a pour-over provision naming the trust as the remainder beneficiary after payment of specified expenses.

As noted above, the terms of the original trust gave Arnold the right to make amendments thereto. He did so on July 18, 1997, by executing in triplicate his first amended trust. Weaver prepared the amended trust documents. Arnold was the grantor and trustee of the amended trust, and Curtis was named successor trustee. As before, the amended trust recited that Arnold was transferring property to the trust. Another assignment of tangible personal property executed by Arnold as grantor and trustee and a revised Schedule A, which listed certain real and personal property being transferred to the trust, were attached to the amended trust. The amended trust contained three differences from the original trust that are significant here.

First, the distributive provisions were changed. Pursuant to Article V, Section B, the remainder of the trust estate, excluding certain tangible personal property distributed via written list, was to be allocated by percentage in the following manner: (1) 55% to the Church, with one-half of this amount specifically designated for the music program; (2) 20% to the Library; (3) 20% to James, with a proviso that his wife, Jacqueline, was to receive his share if James predeceased Arnold; and (4) 5% to the Nutrition Center for meal purposes.

Second, the trust terms dealing with revocation were substantially amended. Article II, Section C, states in pertinent part:

ARTICLE II. Reservation of Rights in Grantor. The GRANTOR reserves the right during GRANTOR'S lifetime and without consent of the TRUSTEE:

....

B. To change, alter, or amend this trust agreement by written instrument, executed by the GRANTOR and delivered to the TRUSTEE hereunder....

C. To revoke or vacate this trust in whole or in part, or to withdraw any of the trust property from the operation of this trust at any time during the GRANTOR'S lifetime. Such revocation or vacation of this trust agreement, or such withdrawal of property shall be effected by GRANTOR giving written notice to the TRUSTEE of the GRANTOR'S intentions in this regard, and upon the receipt of any such notice by the TRUSTEE, the TRUSTEE shall make, execute, and deliver to the GRANTOR such instruments in writing (including deeds, bills of sale, or otherwise) as may be necessary to release to the GRANTOR any and all rights which the TRUSTEE may have acquired in any of the properties of the trust estate.

Thus, the original trust provision requiring any amendments to the trust to be in writing was broadened to cover changes or alterations of the trust agreement itself. More importantly, Arnold's reserved power to revoke the trust was narrowly circumscribed by permitting only one method of revocation, which involved two separate steps: (1) giving written notice of revocation to the trustee; and (2) the subsequent preparation and delivery by trustee of written instruments needed to release the trustee's rights in the properties belonging to the trust estate.

Third, a new article was added the trust. Article X stated that it was to be "construed under and be regulated by the laws of the State of Missouri, and the validity and effect of this agreement shall be determined in accordance with the laws of Missouri."

In September 1999, Arnold moved from his mobile home into the Salem Residential Care Center ("Care Center") because of advancing age and declining health. Arnold's amended trust documents and his will were kept in his safe deposit box at the U.S. Bank. In July 2000, Bill's name was added to the list of persons authorized to enter the box. On September 26, 2000, Arnold asked Bill to go to the bank and get his trust documents. Bill obtained the documents and delivered them to Arnold in his room at the Care Center. Arnold kept the trust documents in his room, where other residents, staff and visitors at the Care Center would have had access to them.

On October 10, 2000, Arnold suddenly became ill and was taken the hospital. He died there on October 11, 2000, at the age of 86. That same day, Bill and Curtis went to the Care Center to clean out Arnold's room. The trust documents were found in the drawer of a night table in the room. Bill and Curtis took the documents back to the bank and placed them in the safe deposit box.

About two weeks after Arnold died, Bill and Curtis brought a number of documents to Weaver. The amended trust documents were among the papers...