Thompson v. Koenen

• Decision Date: 26 March 2013
• Docket Number: No. WD 74549.,WD 74549.
• Citation: 396 S.W.3d 429
• Parties: Kurt THOMPSON, Successor Trustee of the Joseph O'Connor and Mary O'Connor Trust Dated April 13, 2002, Respondent, v. Amber Crowley KOENEN, Respondent; Shaina Crowley, Caitlynn Crowley, Cassandra Crowley; Appellants; Randy G. Crowley, Jr., Respondent.
• Court: Missouri Court of Appeals

396 S.W.3d 429

Kurt THOMPSON, Successor Trustee of the Joseph O'Connor and Mary O'Connor Trust Dated April 13, 2002, Respondent,

v. Amber Crowley KOENEN, Respondent;Shaina Crowley, Caitlynn Crowley, Cassandra Crowley; Appellants;Randy G. Crowley, Jr., Respondent.

No. WD 74549.

Missouri Court of Appeals, Western District.

March 26, 2013.

Stephen K. Griffin, for Respondent Kurt Thompson, Cameron, MO, for appellant.

William M. Quitmeier, for Shaina, Caitlynn and Cassandra Crowley, Kansas City, Mo; Arthur A. Benson, II for Amber Koenen, Kansas City, MO; and Randy Crowley, Jr., Acting Pro Se, O'Fallon, MO, for respondent.

Before Division Three: ALOK AHUJA, P.J., and VICTOR C. HOWARD and GARY D. WITT, JJ.

ALOK AHUJA, Judge.

Following a bench trial, the Circuit Court of Clinton County entered a judgment which ordered the Successor Trustee of the Joseph O'Connor and Mary O'ConnorTrust to execute a deed transferring the Trust's interest in the O'Connors' former residence to Amber Crowley Koenen, one of the O'Connors' grandchildren. The O'Connors' other grandchildren appeal. We affirm.

Factual Background

On April 18, 2002, Joseph O'Connor and Mary O'Connor, husband and wife, created the Joseph O'Connor and Mary O'Connor Trust (the “Joint Trust”), as grantors and trustees. The O'Connors were also named beneficiaries of the Joint Trust. The Joint Trust was revocable during the lifetime of both of the O'Connors; the Declaration of Trust provided, however, that “[u]pon the death of either of the Grantors, no power to alter, revoke or amend this Instrument shall be enjoyed by the surviving Grantor.” The Declaration of Trust provided that upon the death of both of the O'Connors, the income and principal in the Joint Trust were to be paid, in equal shares, to their five grandchildren: Caitlynn Eleanor Crowley; Cassandra Lynn Crowley; Amber Christine Crowley (now known as Amber Crowley Koenen); Randy Gerald Crowley Jr.; and Shaina Rene Crowley.¹

On May 21, 2002, the O'Connors transferred their residence into the Joint Trust.

Joseph O'Connor passed away in July of 2003. After Mr. O'Connor's death, Mrs. O'Connor consulted with attorney Ronald Mullennix on May 7, 2005. According to Mullenix's testimony at trial, Mrs. O'Connor “indicated she wanted to change the distribution of assets at the time of her death.” Mullenix informed Mrs. O'Connor that according to his reading of the Declaration of Trust, she could not amend or revoke the terms of the Joint Trust. He told her, however, that she could withdraw property from the Joint Trust as the surviving grantor, and the Joint Trust's sole trustee and beneficiary.

Following his meeting with Mrs. O'Connor, Mullennix prepared a new trust agreement, which established the Mary F. O'Connor Trust (the “New Trust”). Mrs. O'Connor executed the Trust Agreement for the New Trust on July 26, 2005.

Mrs. O'Connor wished to transfer her residence to the New Trust. To enable Mullenix to prepare the conveyance documents, Mrs. O'Connor provided Mullenix with the deed by which the O'Connors originally acquired the property. She failed, however, to provide Mullenix with a copy of the May 2002 deed by which the O'Connors had transferred the property into the Joint Trust.

Based on the deed provided to him, Mullennix prepared a warranty deed, which on its face purported to transfer the property from “Mary O'Connor, a single person” as grantor, to “Mary F. O'Connor, as Trustee of the Mary F. O'Connor Trust dated July 26, 2005” as grantee. Mrs. O'Connor executed this deed on July 26, 2005, the same day on which she executed the Trust Agreement for the New Trust. Mullenix testified that at the time of preparing the warranty deed, both he and Mrs. O'Connor believed the property was held by Mrs. O'Connor individually, and that “at that point, to my knowledge, [the Joint Trust] did not have assets in it.” At the time Mrs. O'Connor executed the Trust Agreement for the New Trust and the warranty deed, Mullenix provided her with a letter explaining the documents he had prepared for her, and providing her with instructions for transferring other assets into the New Trust; that letter informed her that “[w]e have prepared a Warranty Deed transferring your residence to your trust.” ² Although Mullenix did not believe the Joint Trust contained any assets, his instruction letter also advised Mrs. O'Connor that she had the power to withdraw any assets in the Joint Trust, and transfer them to herself and then to the New Trust.

In January 2007, Mrs. O'Connor contacted Mullenix and told him “that she wanted to be certain that her granddaughter Amber Koenen received her residence at her death.” According to Mullenix's testimony, “Mrs. O'Connor was ... adamant that ... the house go directly to Amber ... and not be a part of the [New] [T]rust.” On January 9, 2007, Mrs. O'Connor executed a Trustee's Deed which Mullenix had prepared, which purported to transfer the property out of the New Trust to Mrs. O'Connor individually. On the same day, Mrs. O'Connor also executed a Beneficiary Deed naming Koenen as the sole beneficiary upon Mrs. O'Connor's death.

Mrs. O'Connor died on September 12, 2007.

Following Mrs. O'Connor's death, Amber Koenen and her family moved into the O'Connors' residence. Koenen testified that after she moved into the home, she and her husband paid all of the expenses associated with the property, and that the accounts for taxes, utilities, and insurance were in their names. In the summer of 2010, however, Mullenix learned from a title company that the property was still titled to the trustees of the Joint Trust. On February 7, 2011, the Successor Trustee of the Joint Trust, Kurt Thompson, filed a Petition for Declaratory Judgment against the named beneficiaries of the Joint Trust, seeking a declaration that the July 26, 2005 warranty deed effectively exercised Mrs. O'Connor's power, as trustee of the Joint Trust, to transfer the property from the Joint Trust to the New Trust. Mullennix testified at trial to the circumstances described above. He also testified that, at the time of the execution of the warranty deed, “I believed it effectively conveyed her house into the trust,” and that he was “still ... of the strong opinion that it accurately reflected her wishes and her intent at that point in time.” Mullenix testified that, in his interactions with Mrs. O'Connor, “two things were clear: She believed she owned the house and could convey it effectively into the trust; [and] she ultimately wanted Amber to have that house as Amber's home.”

On October 11, 2011, the trial court entered its Judgment, which concluded that Mrs. O'Connor “intended for her granddaughter, Amber Crowley Koenen, ... to own” the residence, and that “the real estate records of Clinton County, Missouri should be corrected to comport with the intent of Mary O'Connor, deceased, as found by this Court.” The trial court's judgment ordered the Successor Trustee to execute a Trustee's Deed, conveying the Joint Trust's interest in the residence to Koenen. The O'Connors' other grandchildren appeal.

Analysis

I.

In their first Point on appeal, the Appellants argue that the trial court's judgment, which ordered the conveyance of the residence from the Joint Trust to Koenen, amounted to a reformation of the deed Mrs. O'Connor executed in July 2005, and that the evidence was insufficient to support this result. We disagree.³

The standard of review for a declaratory judgment is the same as that established in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976), for court-tried cases: “[T]he trial court's decision should be affirmed unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law.” Guyer v. City of Kirkwood, 38 S.W.3d 412, 413 (Mo. banc 2001).

Laclede Cnty. v. Douglass, 43 S.W.3d 826, 827 (Mo. banc 2001). “We view the evidence and all reasonable inferences drawn therefrom in the light most favorable to the judgment and disregard all evidence and inferences to the contrary.” Inman v. Missouri Dept. of Corr., 139 S.W.3d 180, 183 (Mo.App. W.D.2004) (citation omitted).

Based on the evidence presented, the trial court could properly have concluded that reformation of the July 26, 2005 warranty deed, to identify the grantor as Mrs. O'Connor in her capacity as trustee of the Joint Trust, was justified based on mutual mistake.

Reformation of a written instrument is an extraordinary equitable remedy and should be granted with great caution and only in clear cases of fraud or mistake. Reformation is a remedy by which a party to a contract may obtain modification of the terms of the contract such that those terms reflect the parties' original intent in forming the contract. Equity will reform an instrument which, through mutual mistake of the parties, does not accurately set forth the terms of the agreement actually made or which does not incorporate the true prior intentions of the parties.

A mutual mistake occurs when both parties, at the time of contracting, share a misconception about a basic assumption or vital fact upon which they based their bargain. This is normally a question of fact. In a bench-tried case such as this, the trial judge is the finder of fact. To establish a mutual mistake in an instrument, it is not necessary to show that the parties theretofore had agreed upon any particular words or language to be used in the instrument, but it is sufficient to show that they agreed to accomplish a particular object by the instrument to be executed and that such instrument, as executed, is insufficient to effectuate their intention.

Trial courts can reform a written instrument only upon clear, cogent, and convincing evidence that leaves no room for reasonable doubt. This degree of proof relates not only to the existence of a mutual mistake, but also to establishment of the actual agreement allegedly...