Borough v. Caldwell (A171075)

497 P.3d 1260, 314 Or. App. 48
CourtCourt of Appeals of Oregon
DecidedAugust 18, 2021
DocketA171075
StatusPublished
Cited by3 cases

This text of 497 P.3d 1260 (Borough v. Caldwell (A171075)) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Borough v. Caldwell (A171075), 497 P.3d 1260, 314 Or. App. 48 (Or. Ct. App. 2021).

Opinion

Argued and submitted November 18, 2020; vacated and remanded for entry of judgment declaring the rights of parties, otherwise affirmed August 18, 2021

Cara Lee BOROUGH and Loren M. Caldwell, Plaintiffs-Appellants, v. Betty H. CALDWELL, as Trustee of the Loren M. Caldwell Trust; Betty Caldwell, an individual; Cody Duerst, an individual; and Sophia Duerst, an individual, Defendants-Respondents. Marion County Circuit Court 18CV38388; A171075 497 P3d 1260

This is a declaratory judgment action related to a disputed option to purchase real property held in trust. The parties are the trustee, the trust beneficiaries, and the option holders. When the trust beneficiaries learned that the trustee was considering selling the property to the option holders, they sought declara- tions that the option agreement was “null, void, and of no effect,” as well as an order directing the trustee to sell the property to them on particular terms. The trial court concluded on summary judgment that the option agreement was valid, declined to order the requested sale to the trust beneficiaries, and dismissed the trust beneficiaries’ claims. The trust beneficiaries appeal. Held: The trial court did not err in concluding that the option agreement was valid because, under the circumstances, it amended the trust. The trial court also did not err by declining to order the trustee to sell the property to the trust beneficiaries. The trial court did err, however, in failing to declare the rights of the parties, as is required in a declaratory judgment action. Vacated and remanded for entry of judgment declaring the rights of parties; otherwise affirmed.

Audrey J. Broyles, Judge. Matthew J. Kalmanson argued the cause for appellants. Also on the briefs was Hart Wagner LLP. J. Kevin Shuba argued the cause for respondent Betty H. Caldwell, as Trustee, and respondent Betty Caldwell, individually. Also on the brief were Shayna M. Rogers and Garrett Hemann Robertson P.C. Cite as 314 Or App 48 (2021) 49

Elena M. Farley argued the cause for respondents Cody Duerst and Sophia Duerst. Also on the brief was Martinis & Hill. Before Armstrong, Presiding Judge, and Aoyagi, Judge, and Sercombe, Senior Judge. AOYAGI, J. Vacated and remanded for entry of judgment declaring the rights of parties; otherwise affirmed. 50 Borough v. Caldwell (A171075)

AOYAGI, J. This is a declaratory judgment action related to an option to purchase real property. Under the terms of a trust, Betty Caldwell has the right to live on certain real prop- erty in Silverton for life. If she chooses to leave the prop- erty and it is sold during her lifetime, the proceeds are to be split between her and plaintiffs (her deceased husband’s two adult children from a prior marriage). Otherwise, plain- tiffs are to receive the entire proceeds from selling the prop- erty upon her death. In dispute is an option agreement that Betty’s husband (the trust settlor) executed before his death, which gives the Duersts (Betty’s grandson and his wife) an option to purchase the Silverton property on certain terms within 180 days after Betty’s death. When Betty expressed an intention to sell the property to the Duersts on the option terms during her lifetime, plaintiffs filed this action against Betty and the Duersts, seeking (1) a declaration that the option agreement was “null, void, and of no effect,” and (2) a judgment directing Betty to sell the Silverton prop- erty to plaintiffs. The trial court dismissed plaintiffs’ claims on summary judgment, concluding that the option agree- ment was valid and declining to order a sale to plaintiffs. Plaintiffs appeal. For the following reasons, we affirm on the merits, but we vacate and remand for entry of a new judgment that declares the rights of the parties. FACTS In reviewing a grant of summary judgment, we view the record in the light most favorable to the nonmoving party. ORCP 47 C. We must determine whether there are genuine issues of material fact and, if not, whether the mov- ing party was entitled to judgment as a matter of law. Id. We state the facts accordingly. In 2008, Loren Caldwell created a revocable trust called The Loren M. Caldwell Trust. Loren designated him- self as trustee, and he designated his wife Betty as successor trustee in the event of his death. The trust’s main asset was a farm property in Silverton where Loren and Betty were living. Under the trust instrument, if Loren dies first, Betty may reside at the Silverton property for the remainder of Cite as 314 Or App 48 (2021) 51

her life and, upon her death, it will be sold, with all proceeds going to plaintiffs. Alternatively, if Betty decides during her lifetime that she no longer wants to live there, the property is to be sold and the proceeds divided between Betty (50 per- cent) and plaintiffs (50 percent). In 2015, seven years after the trust’s creation, Loren executed a document titled “Option to Purchase Real Property,” which purports to grant the Duersts a “sole and exclusive” option to purchase the Silverton property— including the real property, improvements, and farm equipment—on certain terms, exercisable for 180 days after the death of the second to die of Loren and Betty. Specifically, the option allows the Duersts to buy the Silverton property for $300,000, payable in monthly installments of $1,432.25 for 30 years, with no down payment and interest accruing at four percent per annum. The option agreement is between “Loren M. Caldwell, Trustee of the Loren M. Caldwell Trust,” and the Duersts. Loren signed the agreement as “Loren M. Caldwell, Trustee,” and the Duersts signed it individually. Shortly after its execution, Loren recorded the option agree- ment in Marion County. In 2016, Loren died. In 2018, Betty’s attorney notified plaintiffs that Betty “has decided that she can no longer reside on the real property,” that she “is planning to move,” and that she intended to sell the property to the Duersts “under the terms Loren established” in the option agreement. Plaintiffs objected and demanded a public sale. Soon thereafter, plain- tiffs offered to purchase the property for $600,000. More precisely, they offered to pay Betty $300,000 for the prop- erty, because, under the trust terms, if the property sold for $600,000, Betty would receive $300,000 and they would receive $300,000. Betty did not respond to plaintiffs’ offer. Plaintiffs filed this declaratory judgment action, seeking two things. First, plaintiffs asserted that, pursuant to ORS 28.020 and ORS 28.040,1 they were “entitled to a 1 The Legislative Assembly has acted to repeal ORS 28.040, effective January 1, 2022. See Or Laws 2021, ch 728, § 22. However, the statute is still in effect at the time of publication of this opinion, so we refer to current ORS 28.040. 52 Borough v. Caldwell (A171075)

judgment declaring the Option Agreement to be null, void, and of no effect,” both (1) because the Duersts gave no con- sideration for the option, and (2) because a “necessary condi- tion precedent to exercise of the right to purchase purport- edly given by that Option Agreement has not occurred,” i.e., Betty’s death.2 Second, plaintiffs asserted that, pursuant to ORS 28.040, they were “entitled to a judgment directing Betty H.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Kay v. Bank of New York Mellon
337 Or. App. 168 (Court of Appeals of Oregon, 2024)
Borough v. Caldwell (A172579)
497 P.3d 766 (Court of Appeals of Oregon, 2021)

Cite This Page — Counsel Stack

Bluebook (online)
497 P.3d 1260, 314 Or. App. 48, Counsel Stack Legal Research, https://law.counselstack.com/opinion/borough-v-caldwell-a171075-orctapp-2021.