Snow v. Rudd, 981419.

• Decision Date: 21 January 2000
• Docket Number: No. 981419.,981419.
• Citation: 2000 UT 20,998 P.2d 262
• Parties: Lynda SNOW, Plaintiff and Appellee, v. Gloria RUDD, Defendant and Appellant.
• Court: Utah Supreme Court

998 P.2d 262

2000 UT 20

Lynda SNOW, Plaintiff and Appellee, v. Gloria RUDD, Defendant and Appellant.

No. 981419.

Supreme Court of Utah.

January 21, 2000.

Rehearing Denied March 29, 2000.

E. Craig Smay, Salt Lake City, for plaintiff.

David W. Scofield, Paige Bigelow, Salt Lake City, for defendant.

ZIMMERMAN, Justice:

¶ 1 This case arose from an action by Lynda Snow ("Lynda"), against her sister, Gloria Rudd ("Gloria"), to impose a constructive trust on real property that was sold to Gloria by their father. The trial court granted Lynda's motion for partial summary judgment, holding that their father, as trustee of a trust which held the property, breached his trust obligation and, therefore, that the sale was voidable. The trial court also denied a motion for summary judgment by Gloria, ruling, inter alia, that the statute of limitations did not begin to run on Lynda's claim until 1993. The matter was submitted to the jury on issues concerning an accounting for the trust assets, and elements of a laches claim. Gloria appeals, raising a series of contentions. She claims that Lynda had no standing to bring this suit. She also claims that the trial court erred in: (i) denying Gloria's motions for summary judgment on the statute of limitations and laches issues; (ii) imposing a constructive trust on the sale of the property to Gloria; (iii) denying Gloria reimbursement for her expenditures as constructive trustee of the trust; and (iv) awarding Lynda attorney fees and costs, and in holding that these fees had to be paid by Gloria personally or from her portion of the trust assets. Because we reverse the trial court's grant of summary judgment in favor of Lynda on the statute of limitations issue, we have no occasion to address the other points raised.

¶ 2 We first state the facts, which we recite in a manner most favorable to Gloria, the party opposing summary judgment. See Wilkinson v. Union Pac. R.R. Co., 975 P.2d 464, 465 (Utah 1998)

. On June 17, 1976, Dr. Lyndon Daynes Snow ("Dr.Snow") and Mrs. Glayde V. Snow ("Mrs.Snow") created a trust called the Inter Vivos Trust of Glayde V. Snow (the "Glayde V. Snow Trust"). Mrs. Snow was the trustor and Dr. Snow was the trustee. On August 9, 1976, Dr. and Mrs. Snow conveyed their family home, located at 381 11th Avenue, in Salt Lake City, as well as an adjacent lot, to Dr. Snow as trustee of the Glayde V. Snow Trust. Mrs. Snow was to receive the net income of the Glayde V. Snow Trust during her life, as well as so much of the principal as the trustee deemed "necessary or appropriate for the health, support and maintenance of the Trustor, having in mind the standard of living to which the Trustor [had] been accustomed." If Dr. Snow survived Mrs. Snow, he was directed to provide for his benefit all of the net income from this trust. Upon the death of Dr. and Mrs. Snow, Gloria and Lynda, if still living, were to receive in equal shares any residual assets of the trust. Furthermore, if Dr. Snow died or in some other way ceased to be trustee, both Gloria and Lynda became successor trustees.

¶ 3 On October 15, 1977, Mrs. Snow passed away. Dr. Snow then approached Richard Rudd, Gloria's husband, asking him to purchase the family home. When Richard refused, Dr. Snow asked Gloria to buy the home, which she agreed to do. On May 8, 1978, they entered into a real estate contract under which Dr. Snow would be allowed to live in the house rent free, and Gloria would make payments to Dr. Snow on the purchase price of the home and also assume all the financial responsibilities of ownership of the home. After a few years, Gloria told Dr. Snow she could not afford to continue to pay expenses related to the maintenance of the home as well as make payments on the purchase contract. She discontinued making payments on the contract, but continued to pay the operating expenses of the home.

¶ 4 In 1984, Dr. Snow consulted an estate planning attorney, Mr. Jay Gamble. Dr. Snow informed Mr. Gamble of his previous estate plan. Mr. Gamble suggested that Dr. Snow start over by creating a new trust and that he complete the conveyance of the home to Gloria by a forgiveness of the remaining purchase money debt. A meeting in furtherance of this new plan took place on December 27, 1984, between Dr. Snow, Mr. Gamble, Lynda, and Gloria. At this meeting, Dr. Snow's estate plan was reviewed, including his newly created inter vivos trust ("the Dr. Snow Trust") and the debt forgiveness related to the sale of the home to Gloria. Lynda heard references during the meeting to the Glayde V. Snow Trust, but, in her deposition testimony some ten years later, she could not recall the substance of any specific references to it.

¶ 5 In March of 1985, Lynda received a package of documents which included a copy of the warranty deed transferring the family home to Dr. Snow as trustee of the Glayde V. Snow Trust; a copy of the real estate contract in which Dr. Snow, as trustee of the trust, sold the family home to Gloria; and a copy of the warranty deed, which transferred title to the property to Gloria. Each of these documents clearly stated that one of the parties to the transaction was Dr. Snow, as trustee of the Glayde V. Snow Trust. Lynda testified that she was confused as to what the Glayde V. Snow Trust was. When she approached her father to ask about the Glayde V. Snow Trust, he told her not to worry and that it had been taken care of. She made no further inquiry into the nature of the Glayde V. Snow Trust until after her father's death because, as she testified, she had no reason to "primarily" distrust her father and did not want to call him a liar. But, she also testified that she felt that her father lied to her on occasion, and that both Gloria and Dr. Snow were lying about the family home. Lynda testified that during this time she asked Gloria questions about the sale of the family home. She testified that when she questioned her father on this issue, Dr. Snow told her that no sale had really taken place, and that the terms of the real estate contract were not being fulfilled. Lynda alleged that because she always received different and vague answers when she asked about the sale of the property to Gloria, she eventually stopped inquiring.

¶ 6 Dr. Snow died on May 18, 1993, and soon thereafter the family home was listed and sold by Gloria. Lynda claims that following Dr. Snow's death, references to the Glayde V. Snow Trust in his papers caused her to search for the actual document establishing this trust. She contacted retired Judge Joseph Jeppson, whom her mother had mentioned in the 1970s as having helped with the estate plan, and he gave her a copy of the Glayde V. Snow Trust. Lynda testified that she could have asked Judge Jeppson for the document when she first learned of the trust, but did not do so until almost ten years later, after Dr. Snow's death. She further testified that no one stopped her from inquiring as to the terms of the Glayde V. Snow Trust or from obtaining a copy of the trust.

¶ 7 In January of 1994, Lynda filed a claim to impose a constructive trust on the proceeds of the sale of the family home. In the complaint, she asserted that the sale of the home was without adequate consideration and was in violation of the terms of the trust; that the sale of the property operated to impose a trust on the proceeds "in favor of the Glayde V. Snow Trust and its beneficiaries"; and that Gloria was guilty of fraud. Gloria answered asserting, inter alia, a defense of laches and statute of limitations. There followed a series of motions for summary judgment addressing various issues. For the purpose of this opinion, it suffices to say that by the time of trial, the trial court had determined as a matter of law that the Glayde V. Snow Trust gave no power to the trustee to forgive payments due on a contract for sale of trust assets. The conveyance of the trust property to Gloria was "unauthorized and in violation of the trust," and any proceeds from the sale were subject to the terms of the Glayde V. Snow Trust. As to Gloria's defenses, the court held that the statute of limitations period did not begin to run until Lynda "could have discerned the existence of a cause of action," which point the court fixed as "when she obtained a copy of the Glayde V. Snow Trust, following the death of Dr. Lyndon Snow in 1993." Therefore, it concluded that the action was timely filed.

¶ 8 In September of 1997, a jury trial began to resolve the outstanding evidentiary issues which included the question of whether Lynda's claim was barred by laches. At the close of the second day of trial, the trial court took the laches issue away from the jury by ruling that as a matter of law Lynda could not be charged with undue delay for waiting to bring her suit until she obtained a copy of the trust document. The court struggled with whether the statute of limitations issue should be decided by the jury. Even though the court had decided that the statute of limitations period began to run when Lynda received the trust document, less than a year before the suit was filed, the court was concerned that its decision would be reversed on appeal. Therefore, the court allowed in all evidence relevant to the statute of limitations issue. The court also asked the parties to propose questions for a special verdict that would address whether and when Lynda had notice of the breach of trust. Some questions that appear directed at the statute of limitations issues were included in the verdict form, although those proposed by Gloria were rejected. And despite the inclusion of these questions in the verdict form, and a request by Gloria's counsel for jury instructions on the statute of limitations issues, when the jury was instructed, no mention of the statute of limitations defense was included. The matter was submitted and the jury returned a special verdict finding, inter alia, that "prior to the death of Dr. Snow, . . . ...