U.S. Bank, N.A. v. Molk

Decision Date19 January 2021
Docket NumberNo. ED 108598,ED 108598
Parties U.S. BANK, N.A., AS TRUSTEE OF the LIVING TRUST AGREEMENT OF LORENZ K. AYERS, DATED MAY 3, 1967, as Amended and Restated, Respondent, v. Elizabeth MOLK, Appellant, and Anne Herbst, Catherine Herbst, Donald A. Herbst, Miles Herbst, David C. Molk, Rebecca B. Molk and Peter F. Molk, Defendants.
CourtMissouri Court of Appeals

Clayton G. Kuhn, 600 Washington Ave. 15th Fl., St. Louis, MO 63101, James R. Ruffin, 752 Trinity Ave., University City, MO 63130, For Respondent.

Steven M. Hamburg, 231 S. Bemiston Ste. 1111, Clayton, MO 63105, Michael Gross, 231 S. Bemiston Ste. 250, For Appellant.

Tim Lemen, 8182 Maryland Ave. Ste. 600, St. Louis, MO 63105, For Defendants Herbst.

Steven M. Hamburg, 231 S. Bemiston Ste. 1111, Clayton, MO 63105, For Defendants Molk.

OPINION

Colleen Dolan, P.J.

Elizabeth Molk ("Appellant") appeals the probate court's grant of the motion for summary judgment filed by U.S. Bank, as trustee of the Living Trust Agreement of Lorenz K. Ayers ("Grantor"), dated May 3, 1967, as amended and restated (the "Lorenz K. Ayers Trust"), on U.S. Bank's claim for declaratory judgment. Appellant raises five points on appeal related to the probate court's grant of U.S. Bank's motion for summary judgment and award of attorney's fees. U.S. Bank also filed a motion for appellate attorney's fees with our Court that was taken with the case.

Finding that the probate court did not err, we affirm the judgment of the probate court. Additionally, we grant U.S. Bank's motion for attorney's fees on appeal and remand to the probate court for determination of U.S. Bank's reasonable appellate attorney's fees.

I. Factual and Procedural Background

On May 3, 1967, Grantor executed the instrument that established the Lorenz K. Ayers Trust, which was created for the purpose of supporting Grantor during his lifetime and Grantor's wife, daughters (Helen A. Davis ("Helen") and Barbara A. Herbst ("Barbara")), and his daughters’ descendants after Grantor's death. The Lorenz K. Ayers Trust became irrevocable when Grantor passed away in 1987. Pursuant to the terms of the Lorenz K. Ayers Trust instrument, separate trusts were created for Helen and Barbara with the corpus of each trust containing half of the assets in the Lorenz K. Ayers Trust following Grantor's death. The Lorenz K. Ayers Trust instrument further instructs that, following the death of each respective daughter, the trust share of the deceased daughter would be further evenly split such that separate trusts would be created for each of that daughter's children (Grantor's grandchildren) and maintained by U.S. Bank as trustee.1

Item Five, Section 6 of the Lorenz K. Ayers Trust instrument establishes that U.S. Bank, as trustee, "shall pay the entire net income" of each grandchild's trust to the subject grandchild-beneficiary "in convenient installments, for the life of said beneficiary." Item Five, Section 6 further states that, upon the death of a grandchild-beneficiary, the principal of that grandchild's separate trust shall be divided amongst the children of that grandchild-beneficiary (Grantor's great-grandchildren), or in the case of a grandchild-beneficiary dying childless, amongst "his or her then heirs at law who are direct descendants of Grantor...." Once assets of the Lorenz K. Ayers Trust are passed to Grantor's great-grandchildren, each great-grandchild share shall be held in a separate trust maintained by the trustee for the great-grandchild-beneficiary until he or she reaches 21 years of age, at which time said great-grandchild share shall be distributed outright and thus terminating the Lorenz K. Ayers Trust as to that share.

Following Barbara's death on or about October 15, 2015, individual trusts were established (pursuant to the terms of the Lorenz K. Ayers Trust instrument) for her children (Grantor's grandchildren): Appellant, Anne Herbst ("Anne"), Catherine Herbst ("Catherine"), and Donald A. Herbst ("Donald"). U.S. Bank acts as trustee for Anne's, Catherine's, and Donald's grandchild trusts, but not for Appellant's. In 2016, after conferring with U.S. Bank's representatives, Anne requested that U.S. Bank, as trustee, convert her separate, individual grandchild trust to a "unitrust" with 4% of the fair market value of her trust's assets being paid to her annually, pursuant to § 469.411.2 On July 20, 2016, U.S. Bank notified all qualified beneficiaries of its intent to make Anne's requested unitrust election, as required by § 469.411.5, and, although not required by statute, provided all such beneficiaries the opportunity to consent or object to the unitrust election. Appellant was the only qualified beneficiary who objected to Anne's requested unitrust election.

As a result of Appellant's objection to Anne's requested unitrust election, U.S. Bank filed its petition for declaratory judgment before the probate division of the Circuit Court of the City of St. Louis on September 28, 2017, in which U.S. Bank requested that the court "enter judgment declaring U.S. Bank in its capacity as Trustee is authorized to make the unitrust election of Anne[’s] separate share," pursuant to § 469.411.5.3 Appellant and her children filed a joint answer to U.S. Bank's petition and also filed a counterclaim for declaratory judgment. In their subsequently filed second amended counterclaim for declaratory judgment, Appellant and her children argued that Anne's requested unitrust election pursuant to § 469.411.5 would be improper because such an election would be contrary to Grantor's intent expressed in the Lorenz K. Ayers Trust instrument in violation of § 469.411.5 (Count I) and that § 469.411 was unconstitutional (Count II). Appellant and her children argued in their counterclaim for declaratory judgment that Grantor's intent was that the Lorenz K. Ayers Trust's principal be preserved for future generations, and per the terms of the Lorenz K. Ayers Trust instrument, the assets of Anne's separate, individual trust would pass to Appellant, Catherine, Donald and/or their descendants upon Anne's death because she has no children. Additionally, Appellant filed a motion to withdraw her previous consent to U.S. Bank converting Donald's grandchild trust to a unitrust and for revocation of the unitrust election made for Catherine's grandchild trust.4 In that motion, Appellant again pointed out that, because Anne and Donald have no heirs and Catherine only has one heir, "at least three quarters (3/4) of their trusts is distributable to [Appellant's] children." U.S. Bank, Anne, Donald, and Catherine also filed motions requesting awards of attorney's fees from some combination of Appellant personally, Appellant's grandchild trust, and/or Appellant's children; Appellant filed a motion conversely requesting an award of attorney's fees from U.S. Bank and Anne.

Appellant filed a motion for partial summary judgment on Count I of her second amended counterclaim for declaratory judgment and U.S. Bank shortly thereafter filed its cross-motion for summary judgment on its declaratory judgment claim. In support of its cross-motion for summary judgment, U.S. Bank filed its correlating statement of uncontroverted material facts, memorandum of law, and exhibits containing the records detailing its maintenance as trustee of the subject trusts deriving from the Lorenz K. Ayers Trust. The exhibits filed by U.S. Bank correlated with the affidavit of Justin R. Meyer ("Meyer"), U.S. Bank's Trust Managing Director, who also previously served as a trust officer for U.S. Bank. In regards to U.S. Bank's cross-motion for summary judgment on its declaratory judgment claim, Appellant filed motions to strike Meyer's affidavit and U.S. Bank's exhibits supporting its cross-motion for summary judgment, but did not file a response to U.S. Bank's cross-motion for summary judgment or its statement of uncontroverted material facts. In her motions to strike Meyer's affidavit and U.S. Bank's exhibits, Appellant argued why the affidavit did not sufficiently support the exhibits and why the exhibits were inadmissible, but did not substantively respond to U.S. Bank's cross-motion for summary judgment or statement of uncontroverted material facts.

After further pleadings, the probate court entered its order ruling on the parties’ preliminary motions, specifically denying Appellant's motions to strike Meyer's affidavit and U.S. Bank's exhibits. On June 28, 2019, the probate court entered its order granting U.S. Bank's cross-motion for summary judgment and denying Appellant's motion for partial summary judgment.5 The court thereafter on December 15, 2019, entered its order on the partiesmotions for attorney's fees. The probate court found in its December 15, 2019 order that, while Anne, Donald, Appellant, and Appellant's children were not personally entitled to an award of attorney's fees, "equity and justice in this matter require that [Appellant] be responsible for the portion of the legal fees incurred by [U.S. Bank]." Noting several pleadings entered by Appellant and that she "added a divisive element to the cause of action when she withdrew her prior consent to the conversion of Donald's separate trust," the probate court ordered that Appellant reimburse Anne's, Catherine's, and Donald's grandchild trusts for the attorney's fees incurred by U.S. Bank in the following amounts: $94,693.26 to Anne's grandchild trust and $20,291.25 to each of the grandchild trusts for Donald and Catherine.

This appeal follows.

II. Discussion

Appellant raises five points on appeal. Appellant asserts in her first, second, third, and fourth points on appeal that the probate court erred in several ways by granting U.S. Bank's motion for summary judgment. Appellant further argues in her fifth point on appeal that the probate court erred in ordering Appellant to reimburse various trusts stemming from the Lorenz K. Ayers Trust for attorney's...

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