Calhoon v. Oakes

423 P.3d 664
CourtCourt of Civil Appeals of Oklahoma
DecidedApril 12, 2016
DocketCase No. 113,630
StatusPublished
Cited by1 cases

This text of 423 P.3d 664 (Calhoon v. Oakes) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Calhoon v. Oakes, 423 P.3d 664 (Okla. Ct. App. 2016).

Opinion

OPINION BY JOHN F. FISCHER, JUDGE:

¶ 1 Dr. E.L. Calhoon established a revocable trust for the disposition of his estate. His son, Dr. Scott W. Calhoon (Son), is a beneficiary and co-trustee of that trust. The senior Calhoon's Wife, Felice Calhoon, is an income beneficiary and trustee for income purposes only. Son filed this action challenging his mother's disposition and management of the trust's assets. Son appeals the district court's October 6, 2014 Journal Entry of Judgment granting his mother's motion for summary judgment finding that this litigation violated the forfeiture clause of his father's trust.1 The appeal has been assigned to the accelerated docket pursuant to Oklahoma Supreme Court Rule 1.36, 12 O.S. Supp. 2013, ch. 15, app. 1, and the matter stands submitted without appellate briefing. Son's litigation does not seek to invalidate his father's trust but is an effort to enforce the provisions of the trust as they appear in the trust instrument. As such, this litigation does not violate *666the forfeiture provision of the trust. The judgment finding to the contrary is vacated and this case is remanded for further proceedings.

BACKGROUND

¶ 2 On December 21, 2001, Dr. E.L. Calhoon executed the second amendment to his 1996 revocable trust. He executed his Last Will and Testament on October 28, 2002. Together, these estate planning documents provided for the distribution of Calhoon's estate on his death. The will devised certain property to Calhoon's Wife, Son, and daughter, Lane F. Dolly. The will also provided for the transfer of the remainder of Calhoon's property to his trust. Son and daughter were named as the beneficiaries of the trust for the distribution of all trust assets on Calhoon's death. However, if Calhoon predeceased his Wife, the trust provided that all assets "shall remain in the trust for [Wife's] lifetime income benefit only." At Wife's death, the assets of the trust would then be distributed to Son and daughter. Calhoon served as initial trustee of the trust. His Wife was named as "Successor Trustee for income purposes only" on Calhoon's death. Son and daughter were named as co-trustees for all other purposes on Calhoon's death and for all purposes if Wife ceased to serve as trustee.

¶ 3 Calhoon died on February 27, 2005. Wife assumed her duties as Successor Trustee. Wife employed James Oakes and Oakes & Associates, P.C., to provide tax and accounting services. The principal trust assets at Calhoon's death included a brokerage account holding securities worth over $1,000,000, oil and gas mineral interests valued at over $300,000, a breeding herd valued at approximately $400,000, and Calhoon's interest in a 9,000-acre ranch. The ranch is owned by a limited liability company of which Calhoon and Son were the members. Son owns forty-eight percent of the company. Calhoon's majority interest became an asset of his trust, and on his death Wife was appointed as manager of the ranch company.

¶ 4 In December of 2008, Wife, Oakes and the trust's attorney met. Wife and Oakes proposed transferring the trust's mineral interests and its interest in the breeding herd to Wife's trust. The attorney advised them that removal of trust assets from the trust corpus would require the consent of the two co-trustees, Son and daughter. Not long thereafter, the attorney's services as legal counsel to the trust were terminated by Wife.

¶ 5 In July of 2009, Son contacted Oakes and requested copies of certain trust records. Oakes responded stating his willingness to cooperate and put the "Trustees and heirs at ease regarding all accounting activities...." However, by letter dated September 28, 2009, Oakes stated that income from trust assets had been comingled with Wife's property and other than providing a list of trust assets on the date of Calhoon's death in 2005, Oakes stated that "no additional information will be forthcoming." On January 21, 2010, Oakes informed Son that Wife now owned the breeding herd "100%." Oakes also informed Son that there was no documentation existing that evidenced the transfer of title to the breeding herd from the trust to Wife. Subsequently, Oakes took the position that Wife had executed a promissory note payable to the trust in exchange for trust assets including the oil and gas mineral interests and the breeding herd. By the time the summary judgment motions were decided, the amount of this note was $2,400,000. The district court found that this "note" was only intended to be an "accounting notation to facilitate cost depletion" and not a transfer of assets from the trust. In a memo dated February 14, 2011, Oakes stated transfers of trust assets were made to Wife because he and Wife "believed there would not be a [Calhoon] trust going forward."

¶ 6 Son filed this action on July 1, 2011. The district court determined that Son's lawsuit violated the forfeiture clause in Calhoon's trust and granted Wife's motion for summary judgment finding Son had forfeited his right as a trust beneficiary and the right to serve as a trustee.2 Son appeals that judgment *667and the order overruling his motion for a new trial.

STANDARD OF REVIEW

¶ 7 A trial court's denial of a motion for new trial is reviewed for abuse of discretion. Head v. McCracken , 2004 OK 84, ¶ 2, 102 P.3d 670. "Where, as here, our assessment of the trial court's exercise of discretion in denying defendants a new trial rests on the propriety of the underlying grant of summary judgment, the abuse-of-discretion question is settled by our de novo review of the summary adjudication's correctness." Reeds v. Walker , 2006 OK 43, ¶ 9, 157 P.3d 100.

¶ 8 Title 12 O.S.2011 § 2056 governs the procedure for summary judgment in this case. A motion for summary judgment "should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Id . The de novo standard controls an appellate court's review of a district court order granting summary judgment. Carmichael v. Beller , 1996 OK 48, ¶ 2, 914 P.2d 1051. De novo review involves a plenary, independent, and non-deferential examination of the trial court's rulings of law. In re Estate of Bell-Levine , 2012 OK 112, ¶ 5, 293 P.3d 964.

ANALYSIS

¶ 9 The forfeiture or in terrorem clause in Calhoon's trust provides:

The provisions of this instrument (and of E.L.

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Bluebook (online)
423 P.3d 664, Counsel Stack Legal Research, https://law.counselstack.com/opinion/calhoon-v-oakes-oklacivapp-2016.