Young v. Richardson
| Decision Date | 25 July 2008 |
| Docket Number | No. 2006-CA-002441-MR.,2006-CA-002441-MR. |
| Citation | 267 S.W.3d 690 |
| Parties | Julianne May YOUNG, Appellant, v. Lou May RICHARDSON, Charles M. Orr, Christie L. Orr, Clayton P. Orr and Phil M. Orr, Jr., Individually, as Independent Executor of the Estate of Martiele Orr and as Trustee of the Orr Family Trust, and Buena Vista, LLC, Appellees. |
| Court | Kentucky Court of Appeals |
Ridley M. Sandidge, Jr., Louisville, KY, for appellant.
D. Kevin Ryan, Louisville, KY, for appellee.
Before: STUMBO and TAYLOR, Judges; HENRY,1 Senior Judge.
Julianne May Young appeals from an order of the Marion Circuit Court entered on September 27, 2006, which vacated a partial summary judgment and order entered on April 11, 2003.
This case has a lengthy procedural history which includes a prior appeal before this court. The underlying action concerns the propriety of a transfer of assets from two inter vivos trusts that were established in 1991 by the appellant's parents, Sam C. May and Julia May. Young and her sisters, Lou May Richardson and Martiele Orr, or their heirs in the event of their death, were the beneficiaries of the trusts. (The Orrs who are parties to the present appeal are the offspring of Martiele Orr, who died in April 2000.)
Julia May died in 1998. In 1999, Sam C. May created a limited liability company, Buena Vista, LLC. Shortly thereafter, he transferred an Advest brokerage account from the Julia C. May trust to Buena Vista. He also transferred title to two farms which were held in the Sam C. May Trust to Buena Vista. Five days later, he transferred his entire interest in Buena Vista to his three daughters in equal shares. Apparently, he made these transfers to Buena Vista for tax purposes. It should be noted that, according to our earlier opinion in this case, there was no question that his three daughters, or their heirs, would receive these assets. The ensuing dispute concerned the tax consequences of the transfers, and whether any of the assets would be subject to trust restrictions.
In 2001, Young attempted to transfer the Advest account to her mother's trust. In response, Richardson and Philip Orr filed a declaratory judgment action against her in Marion Circuit Court (02-CI-00057), and Buena Vista was joined as a third party defendant, seeking to uphold the transfers of assets made by Sam from the Julia C. May Trust and Sam C. May Trust to Buena Vista, to declare certain trust amendment and trustee resignations ineffectual, and requesting that Richardson be appointed the sole trustee of the Sam C. May Trust. Young counterclaimed, requesting the Court to declare the transfers from the two trusts to Buena Vista void, and to declare Young and Richardson co-trustees of the two trusts. On April 11, 2003, the trial court entered a partial summary judgment in favor of Young, in which it concluded that May had acted as a trustee without authority when he transferred the various assets from the trusts to Buena Vista. The summary judgment was appealed by Richardson, the Orrs, and Buena Vista. These appeals were consolidated. The opinion of the trial court was affirmed by this court on May 6, 2005. See Richardson v. Young, 2005 WL 1050569 (2003-CA-001818-MR; 2003-CA-001848 and 2003-CA-001849-MR). The appellants filed a timely petition for rehearing on June 6, 2005.
The procedural posture of the case then became increasingly convoluted, largely due to events which took place on June 7, August 9 and December 7 in 2005.
On June 7, 2005, the parties met and signed a mediation memorandum in which they agreed to enter into a settlement agreement. The memorandum contained sixteen provisions, of which the following two are the most significant for purposes of this appeal:
All pending cases will be resolved in such a fashion to preserve the tax advantages attendant to utilizing Buena Vista, LLC.
Any dispute arising out of the estates, this agreement or the definitive settlement agreement shall be settled by binding arbitration.
On August 9, 2005, after we denied the petition for rehearing, Richardson filed a motion for discretionary review with the Supreme Court of Kentucky. The motion was held in abeyance by the Supreme Court three times in response to motions by Richardson, until September 7, 2006, when the Supreme Court entered an order denying any further abatement of the case.
On December 7, 2005, Richardson, the Orrs and Buena Vista filed a petition in Marion Circuit Court for relief from the April 11, 2003, judgment, relying upon CR 60.03 and 60.02(f). The movants asserted that there were documents relating to Sam C. May's transfer of the trust assets that had not been submitted for consideration to the trial court and which would have resulted in a dramatically different conclusion to the litigation—namely, that May's transfer of assets to Buena Vista was proper.
A week after the petition was filed, on December 15, 2005, the parties signed an agreed order which apparently represented an attempt to resolve all outstanding issues in the three actions, one of which (Case No. 02-CI-00057) was the subject of a pending motion for discretionary review before the Supreme Court. The order was signed and entered by the Marion Circuit Court the same day. The order provided in part as follows:
The Memorandum executed by the parties on June 7, 2005 is hereby accepted as the settlement agreement of the parties and they shall follow its provisions. John L. Smith, retired attorney [of] Lebanon, Kentucky shall arbitrate disputes or other issues mentioned in said memorandum, subject to his agreement to accept said appointment. Otherwise, if the parties cannot agree to another arbitrator the court shall designate another arbitrator.
On January 17, 2006, Young moved the trial court to abate the proceedings in the CR 60.02(f)-60.03 action and moved for an extension of time to file a responsive pleading until further order of the court and pending the decision of the arbitrator as agreed by the parties in the December 15, 2005, order. The trial court denied the motion and set a briefing schedule. The parties proceeded to brief the action.
Then on June 1, 2006, the trial court entered an order which stated in pertinent part as follows:
On December 7, 2005, the Petitioners filed this action for relief from the April 11, 2003 partial summary judgment in case # 02-CI-00057. On January 20, 2006, the court set a briefing schedule. On February 2, 2006, the Petitioners filed form AOC-280 Notice of Submission.
The Petitioners claim equitable grounds pursuant to CR 60.03 and 60.02(f). The Petitioners claim that important documents were not previously agreed to nor considered by the Trial Court nor the Court of Appeals.
However, on June 7, 2005, the parties executed a memorandum of settlement of all of their pending cases at mediation. The disputes involve the estates of Julia C. May and Sam C. May. The express goal of the parties is to finalize the estates and to minimize the tax liability attendant thereto. The mediated agreement provides for binding arbitration of any dispute. On December 15, 2005, the parties executed an agreed order to fulfill their mediated settlement agreement. The Court has designated an arbitration team with expertise in estates, trusts and taxation.
The trial court granted Young's motion to abate the action pending arbitration, and ordered the parties to address the issues with the court-appointed arbitration team.
The parties met with the arbitrators on September 15, 2006. On September 26, 2006, the arbitrators presented a proposed order to the trial court to vacate the April 11, 2003, order. On September 27, 2006, the trial court entered the order vacating the 2003 judgment. It provided in pertinent part that
1. The pleadings filed by the Respondents herein in response to Petitioner's motion for relief pursuant to CR 60 are violative of the obligations of the respondents, Julianne May Young and Meneese Wall, under the Settlement Agreement entered into by the parties on June 7, 2005 as affirmed by Agreed Order signed by the parties and entered in this Court on December 15, 2005.
2. The Court finds that there are sufficient grounds under 60.02 and 60.03 for the granting of relief from the Court's prior entry of partial summary judgment herein on April 11, 2003, which grounds include, but are not limited to, the agreement of the parties as to the proper resolution of this matter, as set forth in the Settlement Agreement referenced above. Therefore the Court's prior partial summary judgment herein is hereby set aside in its entirety.
3. Further, as noted by the Petitioners in their briefs, this Court has substantial power to grant general equitable relief under CR 60, and the Court hereby exercises its discretion to utilize its inherent equitable powers to grant the requested relief in this case. It seems clear that Sam May intended to fund and then give away Buena Vista, LLC, so that his heirs could have the advantage of the preferential tax treatment of the assets transferred thereto, although (in Petitioners' words) he may have been clumsy in his attempts to do so. Given the agreement of the parties that all pending cases should be resolved in "such a fashion to preserve the tax advantages attendant to utilizing Buena Vista, LLC," it is appropriate for the Court to exercise its equitable powers of discretion to fulfill the intent of Mr. May in making these transfers to Buena Vista, LLC, as well as the intent of the parties in reaching their undeniably arms' length settlement of their dispute.
4. Therefore, the Court rules that the transfer of real estate and securities to Buena Vista LLC in October 1999 ... are valid and binding upon all of the parties in all respects for the reasons set forth in the Petition herein, which Petition is unopposed in light of the Court's ruling striking the pleadings of the...
To continue reading
Request your trial
-
Zink v. Zink
...to CR 60.02, which is designed to relieve a party from a judgment "where regular avenues of relief are foreclosed." Young v. Richardson, 267 S.W.3d 690, 697 (Ky. App. 2008). The purpose of CR 60.02 is to bring errors before a court which had not been put into issue and which could not have ......
-
Cooper v. Cooper, No. 2008-CA-000338-MR (Ky. App. 4/2/2010)
... ... Thus, any trial court order entered while the appeal was pending which purported to affect matters involved in the appeal, was a nullity. See Young v. Richardson, 267 S.W.3d 690, 696 (Ky.App. 2008). Accordingly, we decline to review Cooper's argument that the presiding judge should have recused ... ...
-
Smith v. Norman
...notice of appeal below, and any agreements related thereto, are also null and void on their face as a matter of law, in my opinion. Young, 267 S.W.3d at 695. summation, this is the kind of case that gives both the Court of Justice and the legal profession in Kentucky a black eye. Presumably......
-
Moore Prop. Invs., LLC v. Fulkerson
...in this case], the circuit court is divested of jurisdiction over a case when a notice of appeal is filed[.]" Young v. Richardson, 267 S.W.3d 690, 695 (Ky. App. 2008). Stated in another way, "[a] notice of appeal, whenfiled, transfers jurisdiction of the case from the circuit court to the a......