Schmitendorf v. Taylor

• Decision Date: 19 June 2020
• Docket Number: No. 120,123,120,123
• Citation: 468 P.3d 796
• Parties: Karen SCHMITENDORF, Appellant, v. Deborah TAYLOR, AS TRUSTEE OF the V. LOUISE PARK REVOCABLE LIVING TRUST; and Deborah Taylor, Individually, Appellees.
• Court: Kansas Court of Appeals

468 P.3d 796

Karen SCHMITENDORF, Appellant,

v.Deborah TAYLOR, AS TRUSTEE OF the V. LOUISE PARK REVOCABLE LIVING TRUST; and Deborah Taylor, Individually, Appellees.

No. 120,123

Court of Appeals of Kansas.

Opinion filed June 19, 2020.

Jeffrey R. King, of Sage Law LLP, of Overland Park, for appellant.

Geri L. Hartley, of Paola, for appellees.

Before Bruns, P.J., Green, J., and Timothy J. Chambers, District Judge, assigned.

Bruns, J.:

This case arises out of an ongoing family dispute over the disposition of the V. Louise Park Revocable Living Trust. Karen Schmitendorf brought this action against the trust, and against the trustee—Deborah Taylor, individually. The district court granted summary judgment in favor of Taylor on the basis that a Family Settlement Agreement entered into by Schmitendorf and Taylor to resolve prior litigation precluded the claims asserted in this case. Based on our review of the unambiguous terms of the Family Settlement Agreement entered by the parties, we agree with the district court and affirm its decision.

FACTS

Schmitendorf and Taylor were first cousins once removed to Vera Louise Park, who is now deceased. On August 4, 1993, Park—who was single and had no children—created the V. Louise Park Revocable Trust. This revocable living trust designated Park as the trustee. In the event of disability, incompetency, or incapacity, Park's sister—Genevieve P. Jones—was to serve as successor trustee. If Jones died or was to serve as trustee, Schmitendorf was to serve in that capacity.

The original trust provided that in the event of Park's death, the assets were to be distributed as follows:

"As soon as reasonably possible after the death of Grantor, the Trustee shall divide the trust estate as follows: eighty percent (80%) to Genevieve P. Jones and twenty percent (20%) to Karen Schmitendorf Brandt, except that if Genevieve P. Jones predeceases the Grantor then her share shall go and be conveyed and transferred outright, free from Trust, to Karen Schmitendorf Brandt, but if Karen Schmitendorf Brandt predeceases Grantor, then her share shall be conveyed to Jay A. Schmitendorf."

For several years, Park lived with Jones at John Knox Village in Lee's Summit, Missouri. However, Jones died in October 2012 and Park—who was then 87 years old—moved to Bridge Haven Memory Center in Lawrence. At the time, Schmitendorf lived in Davis, California, and Taylor lived in Lawrence. The purpose of the move was so that Park would be closer to Taylor in case she needed assistance. In order to effectuate the move, Park signed durable powers of attorney, naming both Schmitendorf and Taylor.

On November 15, 2012, Schmitendorf and Taylor met with Molly Wood—an attorney who practices elder law in Lawrence—to discuss Park's long-term care planning and Jones' estate as well as other matters. A few months later, Schmitendorf and Taylor met with Wood again. At the second meeting, Park's trust was discussed but the parties dispute the details of the discussions.

At some point, Schmitendorf provided a copy of Park's trust to Wood. In turn, Wood prepared a draft amendment to the trust that provided that the remainder of the trust assets would be distributed in equal shares to Schmitendorf and Taylor upon Park's death. The amendment also designated Schmitendorf as trustee of Park's trust and Taylor as successor trustee. On February 11, 2013, Schmitendorf returned to her home in California.

Three days later, Wood met alone with Park in a conference room to discuss the amendment to the trust. While the two met, Taylor remained in the lobby. During this meeting, Park executed the trust amendment and Wood notarized her signature. After the February 14, 201 meeting, Wood provided copies of the 2013 trust amendment signed by Park to both Schmitendorf and Taylor.

The 2013 amendment changed the distribution of the trust assets in the event of Park's death, as follows:

"WHEREAS in recognition of Genevieve P. Jones's death, the Grantor wishes to alter the Trust's distribution pursuant to Paragraph 3 Death of Grantor;

"THEREFORE, pursuant to her reserved authority, V. LOUISE PARK does hereby replace paragraph 3.1 with the following:

"As soon as reasonably possible after the death of Grantor, the Trustee shall divide the trust estate to be conveyed outright, free from Trust as follows: 50% to Karen Schmitendorf, per stirpes , and 50% to Deborah D. Taylor, per stirpes ."

Even after the 2013 amendment was signed, Schmitendorf continued to act as the sole trustee of Park's trust. In June 2014, Schmitendorf purchased a house in Lawrence—using trust assets—in anticipation of Park living there and Schmitendorf opening a small assisted living facility. Although Park never moved in, Schmitendorf moved from California and began living in the house owned by the trust. In September 2014, Schmitendorf made a substantial gift from the trust assets to the Greater Kansas City Community Foundation in order to establish an endowment in Park's name.

About a year later, Schmitendorf—in her capacity as trustee—transferred the deed to the house in Lawrence from Park's trust into the Karen K. Schmitendorf Family Trust. The following month, Schmitendorf received a letter from an attorney representing Taylor expressing concern about the use of trust assets. In addition, Taylor indicated that she intended to file the necessary paperwork to be named as Park's guardian.

On January 15, 2016, Taylor filed a petition for the appointment of a guardian for Park. In the petition, Taylor requested that the district court appoint her as Park's guardian. The following month, Schmitendorf filed her answer and counterclaim in which she asked the district court to name her as guardian should it be determined that a guardianship was necessary. Moreover, Schmitendorf asked the district court to declare the durable powers of attorneys executed by Park in 2012 to be void due to Park's lack of capacity. In particular, Schmitendorf asserted:

"19. On August 4, 1993, Vera Louse Park executed the V. Louse Park Revocable Living Trust....

"20. A purported amendment to the V. Louise Park Revocable Living Trust was executed on February 14, 2013....

....

"22. In October and November 2012, the capacity of V. Louise Park was diminished to such an extent that she did not understand or know the nature and extent of her assets, could not readily [identify] visiting family and was dependent on others for her care.

"23. Upon information and belief, as early as 2012, V. Louise Park was diagnosed with Dementia (Alzheimer's type) and any document she signed after such diagnosis would have been done at a time when she did not have sufficient contractual capacity to execute such documents.

"24. Upon information and belief, sometime prior to October 2012, Genevieve P. Jones determined V. Louise Park was no longer able to handle her affairs due to disability, incompetency or incapacity, and Genevieve P. Jones began acting as Successor Trustee under the Trust."

In early 2016, the district court appointed a guardian ad litem to represent Park's interests in the litigation. Subsequently, the parties agreed to attempt to resolve their disputes with the assistance of the guardian ad litem. Initially, these negotiations were not successful, and Taylor filed a "Petition for Immediate Removal of Trustee and Damages for Breach of Trust" in the district court. In doing so, Taylor sought the removal of Schmitendorf as the trustee of Park's trust and alleged "multiple acts of breach of trust, financial misappropriation and self-dealing [by Schmitendorf] ... concerning approximately $1 million of assets." Later, the district court consolidated the removal action with the guardianship case.

The parties continued to participate in settlement negotiations and signed a limited settlement agreement regarding the transfer of money to the Greater Kansas City Community Foundation. In the agreement, the parties agreed that the amount of $251,709 would be transferred back to the trust, and the Foundation subsequently returned the money. The agreement recognized that both Schmitendorf and Taylor "are currently designated as equal beneficiaries of the V. Louise Park Revocable Living Trust executed on August 4, 1993 ...." Ultimately, Schmitendorf and Taylor were also able to agree on the terms of a Family Settlement Agreement pursuant to K.S.A. 59-102(8).

On July 20, 2016, the district court held an evidentiary hearing to consider the Family Settlement Agreement as well as the guardianship issue. At the beginning of the hearing, counsel representing Schmitendorf and Taylor announced that the parties had entered into a Family Settlement Agreement and submitted it for the court's approval. Likewise, counsel announced that the parties had agreed to be appointed as Park's co-guardians.

The Family Settlement Agreement presented to the district court provides:

"All parties to this Agreement desire to agree to a settlement of the matters at hand including trust assets and distributions, care and control of V. Louise Park, and future estate matters as best they can be determined at this date.

....

"5. Distribution: Each party hereto consents and agrees that after the payment of all costs and expenses as listed above all of the remaining assets of Vera Louise Park and the Trust be divided, per the Amendment to the Trust dated February 14, 2013, as follows:

"a. Karen Schmitendorf shall receive 50%, per stirpes, and

"b. Deborah D. Taylor shall receive 50% share, per stirpes."

Paragraph 6 of the Family Settlement Agreement provided additional terms agreed upon by the parties, including:

• Schmitendorf agreeing to resign as successor trustee and Taylor being appointed as the new successor trustee;

• Confirming that the funds given to the Greater Kansas City Community Foundation would be returned to Park's trust in accordance with the previous agreement of the parties;

• Schmitendorf agreeing to execute a promissory note and mortgage to Park's trust in the amount of

...