Bell v. Bell

• Court: Superior Court of Maine
• Decided: August 15, 2018
• Docket: CUMbcd-cv-17-03
• Status: Unpublished

Opinion

STATE OF MAINE BUSINESS AND CONSUMER COURT CUMBERLAND, ss. DOCKET NO. BCD-CV-2017-03 v

GARY W. BELL, ) ) Plaintiff, ) ) V. ) JUDGMENT ON BIFURCATED ) ISSUES BRYAN W. BELL, et al., ) ) Defendants. )

The parties before the Court are Plaintiff Gary W. Bell and Defendants Bryan W. Bell,

Marie P. Bell, Breen D. Bell, Joanne Bell, and Patricia Bell. 1 Service has been properly effectuated

on all Defendants. All parties are represented by counsel, as follows: Gary is represented by Brett

Baber, Esq.; Defendants Bryan and Marie are represented by Richard Currier, Esq.; and

Defendants Breen, Joanne, and Patricia are represented by Brent A. York, Esq.

PROCEDURAL HISTORY

~laintiff Gary filed his initial Complaint against Bryan in Caribou Superior Court on

December 1, 2015. Bryan timely filed an Answer and Counterclaim. Gary thereafter filed his First

Amended Complaint February 8, 2017, again naming only Bryan as a Defendant and Marie as an

interested party. Thereafter, the case was transferred to the Business and Consumer Court and Gary

filed his operative pleading, the Second Amended Complaint in this Court on May 3, 2017, naming

Bryan, Marie, Breen, Joanne, and Patricia as Defendants.

This matter now comes before the Court after a two-day bench trial held at the Presque Isle

District Court February 28 and March 1, 2018. On October 25, 2017, this Court granted Plaintiffs

unopposed motion for bifurcation of trial, agreeing to determine specific issues at a bifurcated trial

1 Because all ofthe parties share the same last name the Court refers to these individuals by their first names throughout this Judgment. before all of the other claims set out in Plaintiffs Complaint and the Defendants' Counterclaim.

See M.R. Civ. P. 42(b). These specific issues relate to the parties' real estate claims and involve

competing requests for a declaratory judgment of ownership among the parties with respect to a

group of largely contiguous properties described by both parties as the "Bell Farms." Plaintiff and

Defendants bring competing petitions for partition. All other issues raised in the pleadings will be

the subject of a jury trial to be scheduled by this Court following its determination of the current

real estate issues and a further pretrial conference ofthe parties. The Court has jurisdiction pursuant

to 4 M.R.S. § 105, 14 M.R.S. §§ 5953, 6051(7),(13), 6502.

Following the trial, the parties obtained and reviewed certain files of Rudman & Winchell,

a law firm that had a role in creating certain trusts that are at issue in this case. The parties have

submitted further stipulations as to the meaning and content of those files, together with additional

exhibits from them. Without objection, and based on the accompanying stipulations that the Court

accepts by way of evidentiary foundation for the introduction of the exhibits, Defendants' Exhibits

X through GG are admitted. Based upon testimony at trial, the stipulations of the parties set_forth

in the Joint Pretrial Statement and the stipulations of the parties regarding the contents of the

Rudman & Winchell files, Plaintiffs Exhibits 100-150, Defendants' Exhibits A-GG which were

admitted without objections as to foundation or authenticity, the record was closed. The Parties'

post-trial written closing arguments and proposed judgments were complete on May 4, 2018 and

the matter was taken under advisement. Following that, the Court makes the following findings of

fact and conclusions of law.

2 . '

FACTS

I. OVERVlE W OF PARTIES AND PROPERTIES

These parties are all family members who have been involved in some capacity with the

operation of the Bell Farms over the years. Gary and Patricia are the parents of brothers Bryan and

Breen and were previously married, having divorced in 1997. (Def's Ex. D.) Bryan is married to

Marie and Breen is married to Joanne. The issues presently before the Court relate exclusively to

determining the parties' respective ownership of the real estate that makes up the Bell Farms,

. which consists mostly of farmland but also includes unimproved land as well as some residences

and buildings that have been used in farming operations, such as for storage of crops and

equipment and the like. The properties at issue are those described in the deeds found in the

following Plaintiffs Exhibits:

100, 102, and 106: The Ford Farm 103 and 104: The Bell Farm 108: The Track Storage 110: The Cheney Farm and the Charlie Smith Farm 112: The Smith Road Farm 113: The Larrabee Farm2 115, 116,and 117:TheAvrilBoydFarm . 119: The Blaine Farm and a residence now occupied by Gary 125 : The Walsh Field, Westfield Storage, and the Kearney Farm

With the exception of Plaintiff's Exhibit 125 these properties are also described in the

conveyances to two trusts found in Plaintiffs Exhibits 123-124. Plaintiff's Exhibits 107-109

appear to be transfers to Gary, Bryan, and Breen as tenants in common or as partners. For purposes

2 In his closing argument, Gary claims that he is the owner of the Larrabee Farm, citing Plaintiffs Exhibit 114 which

is a conveyance deed from the Gary, Bryan, and Breen to Gary Bell. There was some testimony this was for the purposes of maximizing federal crop insurance. Whatever the reason this parcel was subsequently conveyed to the Bell Family Realty Trust and is now part of Bell Farms. (Pl's Ex. 125.)

3 of this proceeding these properties are part of Bell Farms. Plaintiffs Exhibit 126 describes the

Shaw Farms, which is real estate owned by the corporation Bell Brothers, Inc. This is a corporate

asset and its ownership is not subject to this phase of the instant proceeding. The properties listed

above are hereinafter referred to collectively as the Bell Farms.

The properties described above are located in approximately the location shown on the

aerial maps in the appendix to James Park's appraisal (Defs Ex. P.) There are no known third­

party ownership interests in or boundary issues pertaining to the Bell Farms.

II. 1959-94: EARLY YEARS AND PARTNERSHIP FORMATION

Gary and Patricia began acquiring the real estate that now composes the Bell Farms

between 1959 and 1971. (Pl's Ex. 100, 103.) By 1978, Gary's sons Breen and Bryan were partners

in the Gary W. Bell & Sons partnership (the "Partnership"). Although there was testimony that a

written partnership agreement was created, no such partnership agreement was admitted into

evidence and there was no evidence as to its terms. The Court finds that Gary, Bryan, and Breen

are equal partners in the Partnership called Gary W. Bell & Sons.

The real estate acquired since 1971 that has come to compose the Bell Farms was thereafter

conveyed to the Partnership or to Gary, Bryan, and Breen as partners. (Pl's Ex. 102, 106, 104, 108,

110, 115-117, 119.) Some land which was once held by the Partnership was thereafter conveyed

to Bryan and Breen (Pl's Ex. 111, the "Delbert McCrum Farm") or Gary (Pl's Ex. 114, the

"Larrabee Farm"); there was testimony at trial from both sides that these conveyances were

intended to increase the parcels' eligibility for federally-backed crop insurance. Whatever the

rationale, these parcels were subsequently conveyed to the trusts described below. (Pl's Ex. 123.)

III. 1994-95: BELL FARM RESTRUCTURED; TRUSTS E TABLISHED

4 In January 1994, Gary, Bryan, and Breen sought to find some means to keep the ownership

of the farm intact in the event that any man divorced his wife. The Court finds that the primary

impetus for this development was marital difficulties that Breen was having at the time, although

the cause is not particularly relevant as Breen and Joanne have remained manied. In furtherance

of this goal Bryan retained the services of Rudman & Winchell to establish two realty trusts, viz.

the Bell Farms Realty Trust (Pl's Ex. 122) and the Bell Family Realty Trust (Pl's Ex. 121)

(collectively the "Trusts"). Bryan testified that he took this action on behalf of and with the

permission of Gary and Breen as well as himself; however, there is no evidence that Gary or

· Breen-or Patricia, Marie, or Joanne-were represented by Rudman & Winchell or any other

attorney at that time.

Nonetheless, the Court finds that Gary and Breen supported and participated in Bryan's

efforts to revamp the Bell Farms' ownership structure and endorsed the eventual establishment of

the Trusts. Based on the testimony of Gary, Bryan, and Breen, it would have been expected that

Bryan would be the primary driver in this reorganization effort, as all three men consistently

testified that by this time Bryan (with his wife, Marie) was primarily responsible for the "office"

side of the farming business. Gary testified that Bryan took over as president of the Corporation

sometime in 1994. Plaintiffs Exhibits 121 and 122 contain the declarations of trust for the Trusts;

both are signed by Gary, Bryan, and Breen, and their authenticity has been stipulated to. The Court

finds that all three partners of the Partnership-Gary, Bryan, and Breen-intended to create the

Trusts, the res of which was to be most of the properties previously owned by the Partnership, as

described in greater detail in the declarations of trust. (See Pl's Ex. 121-124.)

Despite the fact that the instruments establishing both Trusts specifically refer to a·schedule

of beneficiaries, the parties have stipulated that the schedules of beneficiaries do not exist.

5 However, there is substantial evidence in the record that the intended beneficiaries were Gary,

Patricia, Breen, Joanne, Bryan, and Marie. Gary's position is that each Trust failed ab initio as a

matter of law for lack of beneficiaries because the schedules were never created. The Defendants

urge this Court to consider the available evidence (testimonial and documentary) and find that

these six individuals were the beneficiaries of the Trusts and rule that the Trusts were validly

created. The parties agree that the trusts expired by their terms twenty years after they were created,

i.e. in January 2015. (Pl's Ex. 121 at 'jj 4; Pl's Ex. 122 at 'jj 20(a).)

As part of the restructuring of the family business, in November 1994, Gary incorporated

Bell Brothers, Inc. (the "Corporation"). The primary purpose of the Corporation has been and

remains to engage in farming operations on the Bell Farms. The land itself, which for the most

part had been conveyed to the three men as partners as explained above, was conveyed back to the

three men as trustees of the Trusts. (Pl's Ex. 123-124.) At the time of incorporation, the

Corporation's shareholders were Gary, Patricia, Bryan, Marie, Breen, and Joanne. 3 The Court finds

that Gary consented to this restructuring of the business, including the establishment of the Trusts.

All of the operative documents for the restructuring of the Bell Farms family businesses-the

Articles of Incorporation for Bell Brothers, Inc. (Def's Ex. C); the Shareholder Agreement

regarding the shareholder's stock in Be·ll Brothers, Inc. (Def s Ex. K); the Declarations of the

Trusts (Defs Ex. A-B); the Warranty Deed transferring the Larrabee Farm to the Trustees of the

Bell Family Realty Trust (Pl's Ex. 123); and the Warranty Deed transferring all the remaining Bell

Farms ·'Partnership land" to the Trustees of the Bell Farms Realty Trust (Pl's Ex. 124)-bear

Gary's signature. Furthermore, the testimony of all three men including Gary suggests that Gary

never expressed disapproval with the plan or requested more information or the opportunity to

3 Concurrently, Gary signed Article oflncorporation to form Shelby Transfer, Inc., a family trucking company.

6 consult with an independent attorney. On the contrary, the trial testimony shows that this

organizational restructuring was endorsed by all three men and ultimately their wives as well to

the extent that their interests were implicated.

Gary and Patricia's 1997 divorce judgment recognized the Bell Farms Realty Trust and

ordered that each would retain their own interest in that Trust, but did not mention the Bell Family

Realty Trust. (Def s Ex. D.) Each party was likewise awarded his or her interest in Bell Brothers,

Inc. (Id) In 1999, Patricia transferred her shares in Bell Brothers, Inc. to the Corporation. (Defs

Ex. E.) There is no evidence that Patricia.transferred or attempted to transfer her beneficial interest

in either trust in 1999 or at any time thereafter.

IV. 2005: BUYOUT OF BREEN AND JOANNE

On December 15, 2005, Breen and Joanne transferred their shares in Bell Brothers, Inc. to

the Corporation for approximately $322,000. This buyout was prompted by Breen's desire to leave

the farming business and instead pursue the trucking business full-time. The Court finds that

trucking had always been a part of the family business, both as a way to bring produce to market

and as a way for the family to earn additional income during the off-season. Multiple witnesses

testified that Breen had always enjoyed this side of the business. However, although the impetus

for the buyout was unquestionably Breen' s desire to "get out of farming" in favor of trucking, it

does not necessarily follow that Breen also intended to give up hs ownership interest in the

farmland itself. The Court finds that the 2005 corporate buyout of Breen and Joanne's shares in

the Corporation was limited to the terms set out in the Stock Redemption Agreement (Def s Ex.

F), Promissory Notes (Def s Ex. G, H), and corporate minutes of the special meeting of

stockholders of Bell Brothers, Inc. held December 14, 2005. (Def s Ex. I). The Court finds that

part of this transaction involved transferring some 183 acres (45 tillable) to Breen and Joanne. (See

7 Def s Ex. I, J; Pl's Ex. 127.) However, the mere fact that the Corporation transferred a parcel of

land to Breen and Joanne is not probative of whether Breen and Joanne intended to transfer their

interest in the rest of Bell Farms or their beneficial interests in either of the two Trusts.

The issue is complicated by the fact that the buyout of Breen' s interest was in 2005, when

the trusts could be described as "dormant;" there were no regular meetings of the trustees and the

formalities contemplated in the two declarations of trust were essentially ignored. The Court finds

that the trustees never collected and received income from the trust assets as such and paid net

income to the beneficiaries, or engaged in annual valuations. 4 (See Pl' s Ex. 121 ~ 5; 122 ~~ 4, 8.1.)

This period of dormancy is not particularly relevant to the determination of whether the trusts were

properly established because it is well after the two declarations of trust were executed. See In re

George Parsons 1907 Tr., 2017 ME 188, ~ 45, 170 A.3d 215 (Hjelm, J, dissenting). However,

this is not to say that the Trusts were forgotten. Contemporaneous correspondence from Bryan's

lawyer to Bryan shows that Bryan discussed whether the buyout of Breen's interest in the

Corporation should also dispose of his beneficial interest in the Trusts. (See Pl's Ex. 141.) In any

event, the closing documents never addressed Breen and Joanne's beneficial interests in the Trusts

or Breen's status as Trustee. The Court finds that Breen and Joanne's beneficial interests in the

Trusts were not disposed of in the buyout of their interest in Bell Brothers, Inc.

In addition to his own testimony that the buyout of Breen and Joanne's interest in the

Corporation was also meant to encompass whatever interest they had in the land of Bell Farms,

beneficial or otherwise, Gary presented documentary evidence to support this proposition. The

closing documents-i. e., the Redemption Agreement, Promissory N ates from the Corporation, and

4 Although Bryan testified that the three trustees did hold regular meetings during this time, on cross-examination it became clear that these meetings are more properly characterized as corporate meetings of the officers and directors of Bell Brothers, Inc.

8 the minutes of the special meeting of the Corporation-are silent on Breen and Joanne's beneficial

interest under the trusts. The Court is thus hesitant to consider any extrinsic evidence that the

parties intended to dispose of Breen and Joanne's beneficial interest in the real estate trusts.

See Rogers, 2002 ME 140, ~ 10, 804 A.2d 379. See also 33 M.R.S. § 51(4).

Gary first points to correspondence from Bryan's attorney to Breen's attorney (Alan

Harding) in 2013. (Pl's Ex. 132.) This letter was sent over seven years later, at a time when Bryan

and Breen were adverse, and merely intimates that Mr. Harding was aware that Breen and Joanne

intended to transfer their beneficial interests under the trusts at the time of closing. It is not

particularly probative of the parties' intent in 2005. This is all the more so because Mr. Harding

previously represented Gary in this litigation, and still represented Gary in post-judgment divorce

matters as recently as June 2017. (Defs Ex. R.)

Gary also draws the Court's attention to two contemporaneous documents. Bryan's

handwritten notes dated July 15, 2004 are not very helpful because their meaning is unclear and

they do not seem complete. (Pl' s Ex. 131.) On cross-examination, Gary himself seemed to find

this Plaintiffs exhibit unhelpful and incomplete. Gary also points to a letter dated September 9,

2004, from Bryan's lawyer to Bryan. (Pl's Ex. 141.) This letter purports to follow-up from a

meeting the two men had had some weeks prior to discuss Breen' s buyout, and includes a reference

to the "Bell Family Trust" owning 80% of the farmed land while the land transferred to Breen as

part of the buyout transaction was owned by the Corporation. The letter ends: "However, it was

your feeling that once the transactions described above have been accomplished, Breen and Joanne

would no longer be [beneficiaries] of the Bell Family Trust." (Pl' s Ex. 141.) At most, this is

evidence that Bryan told his attorney that he felt the buyout transaction should include the removal

9 of Breen and Joanne as Trust beneficiaries. The documentation referred to above shows that

ultimately Breen and Joanne's interests in the Trusts were not disposed of in the buyout transaction.

In sum, regardless of whether these documents referred to by Gary are considered, the

Court finds that the 2005 buyout transaction had no effect on Breen and Joanne's beneficial interest

under the trusts. 5

V. 2011: SALISBURY NEGOTIATIONS

In 2011, the Bell Farms operation was again contemplating a buyout, this time of Gary's

interest, as part of a generational succession plan. Both parties consistently testified that

notwithstanding the instant litigation Bell Farms was generally previously expected to be an

intergenerational enterprise. In furtherance of this plan Bryan got in touch with Mike Salisbury, a

consultant from Idaho, on a referral from another farmer in Aroostook County for whom Mr.

Salisbury had helped develop a succession plan. Based on Gary and Bryan's testimony, the Court

finds that Gary was initially amenable to working with Mr. Salisbury and with his help Gary and

Bryan reached an understanding on the terms of an agreement to purchase Gary's interest in the

Bell Farms buildings and improvements in the "Bell Realty Trust" and Bell Brothers, Inc. (Defs

Ex. L, Ll.) This mutual understanding was memorialized in two documents dated September 9,

2011 that were signed by Gary and Bryan. (Id.) Whether this agreement is a binding contract is a

factual question. McClare v. Rocha, 2014 ME 4,116, 86 A.3d 22. Although Defendants now take

the position that these documents memorialize enforceable contracts, Bryan and Gary both testified

that at the time they signed these memoranda they understood Mr. Salisbury was not a lawyer and

they planned to have the deal reviewed by attorneys. Bryan specifically testified that after signing

the memoranda he expected that they would need an attorney "to have things finalized." The

5 The Court similarly finds that the buyout transaction had no effect on Breen 's partnership interest in the Partnership, which was effectively defunct since the reorganization exercise in 1994-95.

10 language of the documents does not suggest a final agreement; each memorandum refers to "this

working agreement." (Def s Ex. L, Ll (emphasis added).) Based on this language and the parties'

testimony the Court finds that the parties did not intend for these documents to memorialize the

final agreement between them but were merely to memorialize preliminary negotiations. Id.,~ 20.

The Court finds that the understanding between Gary and Bryan documented in these two

memoranda was not a contract but rather an unenforceable "agreement to agree." Muther v. Broad

Cove Shore Ass'n, 2009 ME 37, ~ 6, 968 A.2d 539.

This mutual understanding was short-lived. Both Gary and Bryan testified that soon after

signing the two documents Gary raised the issue of his continued employment on the farm and that

Bryan refused to consider this possibility. Bryan testified inconsistently about whether Gary's

insistence on continued employment was a "deal breaker," but there was consistent testimony that

Bryan's reason for refusing to let Gary work the farm as part of any agreement was related to

interpersonal issues between Gary and Bryan's sons. The Court finds that the impetus for the

breakdown of these negotiations and the ultimate abandonment of t~e Salisbury deal was Gary's

insistence on continued employment on Bell Farms. Both parties seem to agree that the breakdown

of these succession negotiations eventually resulted in the instant litigation, leaving it to this Court

to determine the disposition of Bell Farms.

VT. JAMES PARK'S VALUATION

Defendant's expert witness, James Park, completed a thorough and well-researched

valuation of Bell Farms, and the Court adopts the findings therein. (Def s Ex. P, T.) The Court

accepts the valuation of each of the unified parcels as set forth in the appraisal by Mr. Park at

$2,250,000. This was the lower of two value estimates provided by Mr. Park, and the estimate

"under the assumption of sale in the entirety" as opposed to "under the assumption of portfolio

11 valuation allowing for divided sale." (Def s Ex.Pat 2.) In his written report and oral testimony,

Mr. Park was consistent that he felt this value better reflected the intended use for which these

parcels were assembled over time-to facilitate farming operations. Based upon Mr. Park's

testimony, the Court finds that: small units of farmland would likely receive a higher price than

large parcels, that unitary ownership of farmland is preferable to fractional interests, that the Bell

Farms are located in reasonable proximity to two large potato processors in the Central Aroostook

region, that the Bell Farms generally have suitable soils for farming, and that the Bell Farms are

suitable to raise potatoes. (Defs Ex. P.)

With regards to a physical partition, based on the testimony of both Bryan and Mr. Park,

the Court finds that physically dividing the farm land and buildings would have an adverse

economic impact on the Bell Farms farming operations. The Court bases this finding on the

testimony presented at trial about the crop rotation requirements imposed by potato processors as

well as the simple principle of economies of scale. Based on the testimony of Gary and Mr. Park,

the Court likewise finds that there is a ready market for the lease of farmland in the Bell Farms'

region of central Aroostook County and that there would be a reasonable economic return to each

party upon the physical partition of the Bell Farms, and that such an approach could in fact result

in a slightly higher economic valuation.

ANALYSIS

I. THE TRU TS DID NOT FAIL FOR LACK OF BENEFICIARIES

Both sides agree that the principle issue before the Court is whether the Trusts were ever

effective. This is so notwithstanding the fact that the trusts expired on their terms in January 2015.

(Pl's Ex. 121 at~ 4; Pl's Ex. 122 at~ 20(a).) If the trusts were effective, upon expiration, the

Trustees may liquidate or distribute the Trusts' assets amongst the beneficiaries in cash or in kind

12 at the discretion of the Trustees. (Id.) The competing partition actions of the parties would dispose

of the Trust assets. If the Trusts failed ab initio a trust resulted by implication in favor of the

settlors, with the ultimate result that the Partners of Gary W. Bell and Sons partnership have been

the title owners of most of Bell Farms since the expiration·ofthe Trusts in 2015.

"A trust may be created by: 1. Transfer of property. Transfer of property to another person

as trustee during the settlor' s lifetime ... [or] 2. Declaration. Declaration by the owner of property

that the owner holds identifiable property as trustee[.]" 18-B M.R.S. § 401(1)-(2).

A trust is created only if: A. The settlor has capacity to create a trust; B. The settlor indicates an intention to create the trust; C. The trust has a definite beneficiary or is [a charitable trust or otherwise excepted from the definite beneficiary requirement]; D. The trustee has duties to perform; and E. The same person is not the sole trustee and sole beneficiary. Id. § 402(1). "A beneficiary is definite if the beneficiary can be ascertained now or in the future,

subject to any applicable rule against perpetuities." Id. § 402(2).

"When a gift or bequest is made in terms clearly manifesting an intention that it shall be

taken in trust, and the trust is not sufficiently defined to be carried into effect, the donee ... takes

the legal title only, and a trust results by implication oflaw to the donor ...." Murdock v. Bridges,

91 Me. 124, 133, 39 A. 475, 477-78 (1897) (quoting Nichols v. Allen, 130 Mass. 211 (1879)); cf

Canal Nat'! Bank v. Noyes, 348 A.2d 232, 234 (Me. 1975). While Murdock is an older case, this

holding is consistent with the result under the Restatement (Third) of Trusts, which our Law Court

regularly cites for principles of trust law. See, e.g., Estate of Wilde, 1998 ME 55, ~ 8, 708 A.2d

273.

Where the owner of property makes a donative transfer and manifests an intention that the transferee is to hold the property in trust but the intended trust fails ... the transferee holds the trust estate or the appropriate portion or interest therein on

13 resulting trust for the transferor or the transferor's successors in interest [subject to two exceptions inapplicable here.]

Restatement (Third) of Trusts,§ 8 (2012); accord Restatement (Second) of Trusts,§ 411.

Although the Court agrees with Defendants that the evidence is clear and convincing that

six individuals-Gary, Breen, Bryan, Patricia, Joanne, and Marie-were the intended beneficiaries

of the Trusts, the Defendants' written closing argument does not explain whether this evidence

may properly be considered, or what findings the Court must make in order to consider it; i.e.

whether a threshold finding of ambiguity in the written documents is required. Defendant's

argument implies that no such finding is required. The general rule is that "[i]n interpreting a trust

document, a court only considers extrinsic evidence to determine the settlor's intent ifthe document

is ambiguous." Estate of Davis, 2001 ME 106, ~ 9, 775 A.2d 1127. However, in Davis as in the

case it relies upon for this proposition, Estate of Utterback, 521 A.2d 1184, 1187 (Me. 1987), our

Law Court was dealing with a testamentary trust; in both cases, the settlor of the trust was

deceased. See Estate of Utterback, 521 A.2d 1184, 1187 (Me. 1987) ("The residuary beneficiaries

acknowledge that Maine case law prohibits the introduction of testimony relative to the testator's

oral declarations of intent.") (emphasis added). At the time Davis was decided, Utterback' s

holding had been narrowed as "reflect[ing] a policy of excluding statements of a testator's intent

that would otherwise be admissible pursuant to M.R. Evid. 803(3), the state of mind hearsay

exception" and applying to "cases where a party seeks to introduce the hearsay statement of a

testator to prove testamentary intent." Morrill v. Morrill, 1998 ME 133, ~ 4, 712 A.2d 1039; see

id., ~ 10 ("I concur with the Court's conclusion that Utterback's holding must be restricted to

evidentiary issues directly involving will contests.") (Saufl.ey, J, concurring). Whether Davis's

limitation on the introduction of extrinsic evidence to interpret a trust document applies in this case

14 where the settlors are all living and all testified at trial is thus unclear. Davis, 2001 ME 106, ~ 9,

775 A.2d 1127; see also Mooney v. Ne. Bank & Tr. Co., 377 A.2d 120, 122 (Me. 1977) ("Extrinsic

evidence, such as the circumstances of the settlor at the time the trust was executed, may be

introduced to determine the settlor's intention only if the language of the instrument is ambiguous

....") (emphasis in original). A similar policy is reflected in the "parole evidence rule" in contract

construction. Handy Boat Serv. v. Prof! Servs., 1998 ME 134, ~ 13, 711 A.2d 1306. The policy

considerations motivating the parole evidence rule would still be present here where the settlors

are alive and all testified at trial as to their intent. See Univ. ofMe. Found. v. Fleet Bank ofMe.,

2003 ME 20, ~ 9, 817 A.2d 871.

The issue may be merely academic as the Court finds that the Declarations of Trust are

clearly ambiguous as "the language of [these] instrument[s are] susceptible to more than one

reasonable interpretation." Mooney, 377 A.2d at 122. The Court's principle purpose in construing

a declaration of trust is to "effectuate the intent of the settlor." Canal Nat1l Bank v. Noyes, 348

A.2d 232, 234 (Me. 1975); see also George Parsons I 907 Trust, 2017 ME 188, ~ 45, 170 A.3d

215 ("The court must determine a settlor's intent at the time the trust was created, without regard

to sensibilities that may have evolved later.") (emphasis added) (Hjelm, J, dissenting). To

conclude now that the Trusts were never effective would be to completely disregard the intent of

the settlors at the time they executed the declarations of trust, as evidenced by the settlors' trial

testimony and the documents themselves. Proceeding from that premise-that the Court's goal is

to effectuate the intent of the settlors to establish two trusts-the remaining function of the Court

is to enforce the terms of the Trust and, as necessary, construe the declarations of trust consistent

with that intent. To be clear, the Court does not consider extrinsic evidence to determine whether

the declarations are ambiguous, but only to resolve the ambiguity in the declarations establishing

15 the Trusts. The declarations of trust refer to schedules of beneficiaries; for whatever reason, those

schedules were never created. In the context of the declarations of trust, "beneficiary" thus

becomes an undefined or ambiguous term. In such a situation the Court may consider extrinsic

evidence to define the ambiguous term. See Univ. ofMe. Found., 2003 ME 20, ,r 9, 817 A.2d 871.

The Court rules as a matter oflaw that the Trusts did not fail for lack of beneficiaries. The

extrinsic evidence the Court considers here consists of the testimony of Gary, Bryan, and Breen as

well as the contemporaneous con-espondence from the Rudman & Winchell file that was

introduced upon stipulation of the parties after the bench trial. (See, e.g., Def s Ex. AA, CC, DD).

All three settlors of the Trusts testified at trial. Brian and Breen both testified as to who the six

beneficiaries were intended to be under both Trusts; Gary never testified that anyone other than

those six individuals were to be the beneficiaries contemplated in the declarations of trust. This

evidence is corroborated by the contemporaneous notes and correspondence of the attorneys

involved in setting up the Trusts. There is no evidence to suggest that anyone other than these six

individuals were meant to be beneficiaries of the Trusts, nor is there any evidence to suggest that

any of the six were not meant to be beneficiaries. The Court thus concludes that because the trusts

were effective, but have since expired on their terms, the Trustees may liquidate or distribute the

Trusts' assets amongst the six beneficiaries in cash or in kind at the discretion of the Trustees,

commensurate with each beneficiary's beneficial interest. (Pl's Ex. 121 at ,r 4; Pl's Ex. 122 at ,r

20(a).) The Court finds that each Trust has six beneficiaries, each of who currently holds an equal

one-sixth beneficial interest: Gary, Breen, Bryan, Patricia, Joanne, and Marie. 6 The Trustees have

6 The Court determined as a factual matter that Breen and Joanne's beneficial interests under the Trusts were not disposed of in the buyout transaction of Breen's interest in the Corporation. Whether this was the result of a failure on the part of Bryan as then-president of the Corp0ration (or Bryan and Gary jointly as the two other trustees of the Trusts) is not an issue presently before the Cowt.

16 effectively placed the issue of the disposition of the Trust assets with the Court in their competing

petitions for partition.

II. PARTITION

Both parties present alternative petitions for partition to this Court. In broad strokes, Gary

requests a physical partition of the land; half of which is to be granted to him and half to Bryan as

the remaining partners in the Gary W. Bell and Sons Partnership. 7 Defendants request that they be

allowed the opportunity to buy Gary out of his share, which they argue is only one-sixth of the

total land, equal to his beneficial interest under the Trusts. Given the Court's ruling above that the

Trusts are valid and no beneficiary has ever transferred or otherwise disposed of her beneficial

interests under the Trusts, the ultimate disposition of Bell Farms pursuant to any partition order

must reflect each parties' one-sixth interest in the land. All of the beneficial interest holders are

parties to this action. The Court finds that given the expiration of the Trusts and the Trustee's

competing petitions for partition that the parties are to be considered tenants in common for

purposes of deciding how Bell Farms is to be partitioned.

This Court has the authority to partition property held in joint tenancy or tenants in common

pursuant to statute as well as its express grant of equity jurisdiction. 14 M.R.S. §§ 6051(7),(13),

6501-6525; see also Libby v. Lorrain, 430 A.2d 37, 38-39 (Me. 1981). "Statutory partition may be

carried out only by physical division of the jointly owned real estate or perhaps ... by a time­

sharing of its use." Libby, 430 A.2d at 39. "EquitaQle partition is more flexible in its procedure

than 'partition by petition' and is not limited to a physical division and may be carried out by sale,

as statutory partition may not be, and it is free of any special and restrictive procedures laid down

7 Because the Court finds that Breen also remains a partner in the Partnership, this would result in a three-way division.

17 by statute." Id. Provided its equity jurisdiction has been invoked by a litigant, "[t]he equity court

will order sale and division of the proceeds where physical division is impractical or would

materially injure the rights of the parties." Id. In this case, Defendants explicitly invoke the Court's

equitable power to order a "partition by buy-out," as it is called by the Libby Court. Id. at 40.

The Court finds that physically dividing the farm land and buildings would have an adverse

economic impact on the Bell Farms fanning operations. In its discretion the Court concludes that

a physical partition of the land pursuant to 14 M.R.S. §§ 6501-6525, particularly into one-sixth

interests, is therefore impractical and would materially injure the rights of the parties. Our Law

Court has consistently held that this decision belongs to the sound discretion of the trial court, and

that "impracticality" is not synonymous with "impossibility." See, e.g., Rinehart v. Schubel, 2002

ME 53, ~ 10, 794 A.2d 73; Withee v. Garnett, 1998 ME 30, ~ 4, 705 A.2d 1119. This case does

not present equitable circumstances for a physical division to a minority one-sixth owner, to the

detriment of the other five Trust beneficiaries entitled to a share of the assets and, particularly, the

stockholders of Bell Brothers, Inc., which includes Gary Bell. 8 See Withee, 1998 ME 30, ~ 4, 705

A.2d 1119.

A buy-out of Gary's one-sixth interest in the Bell Farms real estate is an equitable result in

this case. This case is factually analogous to Varney v. Varney, No. CV-92-221, 1995 Me. Super.

LEXIS 341 (September 29, 1995) in that both cases are about the judicial partition of agricultural

real estate after the collapse of inter-party generational succession discussions. However, there are

material differences between the parties in the two cases that shows why partition by buy-out is

equitable in this case but was not in Varney . The defendant in Varney, Gregg Varney, was the son

8 As an alternative ground for equitable partition, the Court finds that physical partition "would 'materially injure' the

parties('] rights. " Rinehart, 2002 ME 53, ~ 10, 794 A.2d 73 (quoting Libby, 430 A.2d at 39 (Me. 1981)). Physical parti tion would have an economic impact on the farming operations of Bell Farms, ofwhich all shareholders (including Gary) have a right to share in the profits.

18 1978 when the Partnership was formed or in 1994 when the Corporation was formed. In fact, the

creation of the Corporation and the two trusts diminished rather than increased Bryan's interest.

In sum, the Court finds that Bryan "seeks the sanctity of [the] farm with clean hands." Cf Varney,

No. CV-92-221, 1995 Me. Super. LEXIS 341 at *13.

Finally, Gary suggests that because he started amassing the land that now makes up Bell

Farms before Bryan and Breen were born, and made all of the financial contributions to the early

Partnership land purchases, that he is entitled to a larger share of the real estate in an equitable

partition. Our Law Court disagrees. See Ackerman v. Hojnowski, 2002 ME 147, ~ 11, 804 A.2d

412 ("Contributions of the parties to the property prior to the joint tenancy, however, are not

equities growing out of the joint tenancy relationship. To allow the consideration of contributions

preceding the joint tenancy would defeat joint ownership.") Once the land was conveyed into the

Partnership, it became jointly owned. Allowing Gary to many years later argue that these

contributions entitle him to a greater equitable share of that property would defeat the purposes of

joint ownership. See id.

In sum, the Court agrees that the partition urged by Defendants is equitable under the

circumstances. The Court concludes as a matter of law that Gary holds an undivided one-sixth

interest in Bell Farms. The Court finds in its discretion that a physical partition setting aside to

Gary one-sixth of Bell Farms is impractical and would materially injure the interests of the parties.

Based on that finding, the Court concludes that an equitable partition by buy-out9 is appropriate

under the circumstances. 10

9 A buy-out has the added benefit of dividing the property "in a manner to avoid continued interaction between the parties which is likely to engender future conflicts." Varney, No. CV-92-221, 1995 Me. Super. LEXIS 341 at *14 (citing Berry v. Berry, 658 A.2d 1097, 1099 (Me. 1995). A physical partition would potentially continue to pit Gary against his sons and their families as Defendants would undoubtedly seek to rent Gary's land in order to keep Bell Fanns operational. 10 Gary's claim that "Bryan has failed to introduce any evidence that he has the cWTent financial ability" to effectuate a buy-out of Gary's interest is not true. Libby, 430 A.2d at 40. (Pl's Closing Argument 12.) As noted above the Trusts

20 of the plaintiff, Marguerite Varney, whose husband-Gregg's father-had passed away. As in this

case, Gregg represented the "next generation" of the family farm and his "desires [were] all related

to the operation of the farm ." Id. at * 10-11. Plaintiff Marguerite ' s desire was to ensure that her

interest in the farm was equally divided among her remaining children. Id. at *9-10. The Court

explicitly found that Gregg was not an equitable actor because he manipulated or maneuvered his

parents into positioning him as not only the successor operator of the family farm but also such

that he "would acquire [a] greater interest in the remaining property than held by his brothers and

sisters as potential heirs" of Marguerite and her husband by "demand[ing] that he be made a joint

tenant with his parents for the unquestioned reason that he insisted on full title to the farm upon

the death of his parents without further consideration." Id. at *12-13. After securing a

reconveyance of the farm land to himself as joint tenant, Gregg "worked hard to develop the farm

operation but he [ ] created irritations inconsistent with the joint tenancy along the way, most

notably the sale of fill and stumpage without the consent of his parents, the joint tenants." Id. at

* 13. Under those circumstances, the court "conclude[ed] that defendant [did] not seek the sanctity

of his farm with clean hands and he must recognize the equities as they stem from the deed"

creating the joint tenancy. Id *13 .

In this case, while Bryan desires to continue to operate the family farm, unlike Gregg in

the Varney matter, he has not undertaken any bad acts to further that goal. Although at trial Gary

characterized some of Bryan's actions as "crooked," the Court finds that at the time of the 1994­

1995 business restructuring Bryan was acting with the consent and support of Gary. Before that,

Bell Farms was owned and operated by the Partnership. It is unrefuted that Gary formed the

Partnership; unlike the defendant in Varney, Bryan never "demanded" to be made one-third partner

or conditioned his continued work on the farm on a demand that the farm pass to him in either

19 As noted above the Cowt adopts Mr. Park's valuation of Bell Farms at $2,250,000.

However, Mr. Park's appraisal includes the value of the "Jim Shaw Farm" which appears to be the

same "Shaw Farm" owned by the Corporation and referenced above. (Defs Ex. T; Pl's Ex. 126.)

As this corporate asset is not subject to the instant partition action its value, appraised at $126,500

by Mr. Park, must be subtracted from the value of "Bell Farms" for purposes of this partition

action. This reduces the appraised value of Bell Faims to $2,123,500. 11 Gary's one-sixth undivided

interest in Bell Farms is thus valued at $353,917. (Def s Ex. T.) All parties agree that Gary should

be set aside his home and 1.79-acre lot. (Def s Ex. 0.) The parties also agree that Mr. Park's

appraisal did not include Gary's home and house lot but only the abutting "Blaine Farm." (Def s

Ex. T.) The "Blaine House" and lot were appraised separately and valued at $100,000. (Defs Ex.

0.) Defendants have agreed to bear the cost of surveying Gary's 1. 79-acre parcel and residence.

CONCLUSION

Based on the foregoing the Court orders as follows:

The Court exercises its equitable powers to order the equitable partition of the Bell Farms

real estate currently held by the Trustees. (Counts Five a!ld Six of Plaintiff's Second Amended

Complaint; Count Six of Defendants' Second Amended Counterclaim.) Based on the value of the

unified parcels in Jim Park's appraisal and subtracting the value of the corporately held Shaw

Farm, the Court divides Bell Farms as follows:

hold assets valued at over two million dollars; the Defendants as a class own five-sixths of those assets based on the Court's conclusions above. 11 The valuation accepted by the Court is slightly lower than the "portfolio valuation" and is premised on the assumption "that the entire farm unit must sell as a whole" based on Mr. Park's testimony and his report in which he says the latter valuation "better reflect[s] the value for the intended use" and "depicts the buyout situation of all involved real estate." (Defs Ex. P at p. 1, 6.) Unlike the portfolio valuation this means that the removal of a single parcel (i.e. the "Shaw Farm") could impact the total valuation by more or less than the value of that parcel. The Court nonetheless finds that the removal of a fifty-two tillable acre parcel (tillable acreage of the Shaw Farm) from a total of over 600 would not impact the total valuation by more or less than the value of the parcel.

21 1. To Plaintiff Gary Bell: Gary Bell's house lot, with a value of $100,000; together with the

sum of $253 ,917, payable within thirty days of entry of a final Judgment.

2. To Defendants: All other land and buildings identified in James Park's appraisal, with the

exception of Shaw Farm which is owned by the Corporation.

By agreement, Defendants shall pay the survey expense to describe the 1.79-acre parcel and

residence awarded to Plaintiff Gary Bell. All deeds and transfer tax forms shall be executed by the

Trustees, Partners and their spouses, as the case may be, including Breen Bell as attorney-in-fact

for Patricia Bell.

The case will be scheduled for a telephonic status conference with counsel to discuss the

future proceedings.

The Clerk is requested to enter this Order on the docket for this case by incorporating it by

reference. M.R. Civ. P. 79(a).

Dated: Richard Mulhern Judge, Business and Consumer Court

Entered on ltie Dod(et: ~ ' [ 5 '/ Y. Copi~ sent via Mall_ Elfldmnlc.f!llty _ V