Shoemaker v. Estate of Freeman, 85636
| Decision Date | 03 March 1998 |
| Docket Number | No. 85636,85636 |
| Citation | 967 P.2d 871,1998 OK 17 |
| Parties | Iva SHOEMAKER; Mary Shackleford Wolfe; Baird Brown; Clair Brown; Eileen Segrest; and Norman S. Brown, Appellees, v. The ESTATE OF Lula FREEMAN, First National Bank and Trust Company of Tulsa, Executor; The Lula B. Freeman Trust, First National Bank and Trust Company, Successor Trustee; Gail C. Freundt; Stephen L. Corcoran; David J. Corcoran; Children's Medical Center of Tulsa; Oklahoma Medical Research Foundation; and the University of Tulsa, Appellants. |
| Court | Oklahoma Supreme Court |
On Certiorari from the Court of Civil Appeals, Division 2.
¶0 Plaintiffs, remaindermen of a life estate, filed suit in district court seeking to recover royalties which accrued during life tenancy. Trial court granted summary judgment on all issues. Appeal number 74,681 followed. The Court of Civil Appeals reversed and remanded. This Court denied certiorari in appeal number 74,681. On remand, parties filed amended pleadings raising new claims. Trial court, the Honorable Jane P. Wiseman presiding, decided the equitable issues, and issues at law were addressed by jury. Judgment was entered for plaintiffs. Defendants filed present appeal. In present appeal, Court of Civil Appeals vacated judgment of trial court and remanded matter with instructions.
CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS' OPINION VACATED; JUDGMENT OF TRIAL COURT AFFIRMED.
George H. Lowrey, Lowrey & Lowrey, Tulsa, for Appellant.
Thomas H. Hull, Tulsa, for Appellees.
¶1 This appeal is before this Court after a jury trial on the issues at law and before the judge on the issues of equitable cognizance. The parties are seeking to establish rights to royalties which accrued during a life tenancy. The issues in this case are: (1) whether a prior Court of Civil Appeals' opinion determined as the law of the case that the plaintiffs, as remaindermen, were entitled to the accrued royalties under the terms of the will which bequeathed the life estate and the remainder interest, (2) whether the plaintiffs' claims are barred by the doctrine of election, (3) whether the trial court erred in refusing to reform the trust on the grounds of mistake, (4) whether the trial court erred in instructing the jury on misrepresentation, and (4) whether the trial court erred in instructing the jury on exemplary damages. 1
¶2 In 1928, Charles W. Brown executed a will in which he left two farms to his children Raymond Brown and Lula Freeman (Freeman) in equal undivided one-half interests. He left another farm to his grandchildren subject to life estates in Raymond Brown and Freeman. As to the farm subject to the life estate, the will provided that the life tenants were to "take, hold, and receive all rents, royalties, and bonuses from said land for oil, gas or other minerals under leases or contracts that accrue during their tenancy."
¶3 Charles Brown died on December 15, 1934, and Raymond Brown died in 1954. Freeman died in 1984. During the years before Freeman's death, the farm in which she had a life estate generated income from oil-and-gas royalty interests (accrued royalties) which were put into the trust. Also included in the trust was one of the farms that Freeman received under the terms of Charles Brown's will. Freeman also made contributions to the trust from income other than the royalties. The First National Bank & Trust of Tulsa, one of the defendants, was named trustee. During her lifetime, Freeman made gifts from the trust funds to the University of Tulsa, Children's Medical Center of Tulsa, the Oklahoma Medical Research Foundation, and the plaintiffs. Under the trust provisions, Freeman gave one-half interest in one of the farms to her niece Iva Shoemaker and one-half interest to her great nieces and nephews. The corpus of the trust was to be distributed as follows: $10,000 each to her great nieces and nephews; $2,000 to a doctor; $50,000 to Perry Shoemaker, her niece Iva Shoemaker's husband; and one-third of the residue to Children's Medical Center in Tulsa, one-third to Oklahoma Medical Research Foundation, and one-third to the University of Tulsa.
¶4 Freeman made several specific bequeaths in her will including a $5,000 gift to the Oklahoma Medical Research Foundation; one-half interest in her real property to Iva Shoemaker or her children; one-half interest to Norman Brown, Iva Shoemaker's brother, or his heirs; and the residue of her estate, $12,714.27, to the University of Tulsa. The plaintiffs claimed an interest in the accrued royalties deposited in the trust, and the trustee took the position that the accrued royalties generated during Freeman's life belonged to the trust and could be distributed only to the designated charities under the terms of the trusts.
¶5 The plaintiffs also made several demands on the trustee that the farm given to them under the terms of the trust be deeded to them. Even though the trustee has never questioned the plaintiffs' right to ownership of the farm, the trustee has consistently refused to deed the farm to the plaintiffs.
¶6 In 1986, two years and two months after Freeman died but less than two years after making demand on the trustee, the plaintiffs filed suit seeking a declaratory judgment that they were entitled, as remaindermen under Brown's will, to the royalty income generated during Freeman's life estate. They also sought remedies for conversion and waste. Additionally, the plaintiffs requested the district court enter judgment against the defendants for the return of distributions previously made to the charities. Lastly, the plaintiffs sought that the accrued royalties be distributed to them rather than the named charities.
¶7 On September 2, 1987, the trustee filed a motion for summary judgment on the first cause of action, arguing that any income from the royalties was the property of Freeman and subject to distribution under the terms of the trust. The remaindermen filed a response and a motion for partial summary adjudication on the issue of their entitlement to the royalties as remaindermen in Brown's will. On November 6, 1987, the district court denied the defendants' motion for summary judgment and granted the plaintiffs' motion as to the first cause of action only.
¶8 On December 19, 1988, after defendants' two motions to vacate the November 1987 order were denied, the trustee filed another motion for partial summary adjudication. The trustee urged that plaintiffs' claims for relief were barred by the statute of limitations. The trustee took the position that the time began to run on the causes of action when Freeman died. The plaintiffs countered that the time did not begin to run until the trustee denied their right to the royalties. The district court granted the trustee's motion on February 24, 1989.
¶9 On March 2, 1989, the plaintiffs filed a motion to reconsider, an application for a temporary restraining order, an application for relief under the Uniform Declaratory Judgments Act, an application to amend petition, and a petition for removal of the trustee. On May 3, 1989, the trustee filed another motion for summary judgment arguing that the plaintiffs were barred from asserting their claims by the equitable doctrine of election. On August 7, 1989, the district court denied the plaintiffs' motions and applications for relief, to amend, and for removal of the trustee. The district court granted the trustee's motion for partial summary adjudication ruling that plaintiffs' claim for conversion was barred by the statute of limitations. The district court also found that the plaintiffs were barred from asserting their claims by the equitable doctrine of election because they had previously received gifts from the trust.
¶10 Thereafter, both the trustee and the plaintiffs filed motions for partial summary adjudication on the issue of the disbursement of the royalties which remained in the trust. The charitable beneficiaries filed motions adopting the trustee's motions. On January 5, 1990, the trial court entered judgment for the defendants on the claims for affirmative relief.
¶11 The plaintiffs appealed (Appeal No. 74,681). The order granting the plaintiffs partial summary adjudication on the issue of the declaratory judgment was not presented in the petition in error. However, two of the residuary beneficiaries raised the issue in their responses to the plaintiffs' petition in error.
¶12 On appeal, the Court of Civil Appeals found summary judgment was improper. The Court of Civil Appeals held that the statute of limitations did not begin to run until the plaintiffs made demand for the accrued royalties. The Court of Civil Appeals also determined that the plaintiffs were not barred from making a adverse claim against the trust. In so holding, the Court of Civil Appeals stated:
The Court of Civil Appeals denied rehearing. This Court denied the petition for certiorari. Thus, the decision of the Court of Civil Appeals became final.
¶13 On remand, the parties amended their pleadings. The plaintiffs sought damages for conversion and breach of trust. They also sought punitive damages. The trustee filed a counterclaim (1) asking that the trust be reformed to award the charitable beneficiaries the residue of the trust and for creation of a resulting trust based on a mistake that Freeman believed the royalties were hers to dispose of as she wished and (2) asking for damages for fraud because the plaintiffs concealed from Freeman the fact that they intend to challenge the gifts under the trust. The parties agreed that the...
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