Enchanted World Doll Museum v. CorTrust Bank, N.A.

2009 SD 111, 776 N.W.2d 832, 2009 S.D. LEXIS 187
CourtSouth Dakota Supreme Court
DecidedDecember 22, 2009
DocketNo. 25223
StatusPublished
Cited by1 cases

This text of 2009 SD 111 (Enchanted World Doll Museum v. CorTrust Bank, N.A.) is published on Counsel Stack Legal Research, covering South Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Enchanted World Doll Museum v. CorTrust Bank, N.A., 2009 SD 111, 776 N.W.2d 832, 2009 S.D. LEXIS 187 (S.D. 2009).

Opinion

KONENKAMP, Justice.

[¶ 1.] Trustee CorTrust Bank moves to dismiss Enchanted World Doll Museum’s appeal of the circuit court’s order assuming court supervision of a trust, reforming the trust, and distributing trust assets to a new beneficiary. The motion is granted and the appeal is dismissed.

[833]*833Background

[¶2.] In 1993, Eunice Thomas Reese established a trust to benefit and provide income to the Enchanted World Doll Museum in Mitchell, South Dakota. A contingency of the trust was that Enchanted World become a qualified charitable organization. Enchanted World did so and began to receive income from the trust.

[¶ 3.] Reese died in December 1993. CorTrust Bank eventually became a successor trustee of the Reese Trust. Before the circuit court’s action in this matter, the Board of Directors of Enchanted World determined that the museum would cease operations. The board began to sell the museum’s assets and to wind up its affairs. As a result, CorTrust filed a petition requesting that the court: assume supervision of the Reese Trust; determine the initial purpose of the trust had become impossible to fulfill; terminate the trust; and distribute the trust assets in accord with the cy pres doctrine and SDCL 55-9-4.1 As part of its petition, CorTrust requested that the court distribute the trust assets to the Mitchell Area Charitable Foundation2 (the foundation) as a community chest type of organization mentioned as an alternative beneficiary under the terms of the trust. Enchanted World objected, arguing that the purpose and mission of the foundation differed from those of the museum. Enchanted World requested that the trust assets be distributed instead to the United Federation of Doll Clubs, Inc. of Kansas City, Missouri.3

[¶ 4.] A hearing on CorTrust’s petition was held on January 26, 2009. The circuit court subsequently entered findings of fact, conclusions of law, and an order that the trust assets be distributed to the foundation to make income distributions to qualified charitable entities for the purposes of establishing and operating a museum for the display of dolls having historical, artistic, or other value. Enchanted World filed a notice of appeal of the circuit court’s order but failed to serve the foundation with its notice. CorTrust moved to dismiss the appeal because of the failure to serve the foundation. This Court held the appeal in abeyance and directed further briefing and oral argument on CorTrust’s motion to dismiss.

Analysis and Decision

[¶ 5.] The question we must decide is whether the Mitchell Area Charitable Foundation was a party that Enchanted World Doll Museum was required to serve with its notice of appeal. SDCL 15-26A-4 sets forth the steps for taking an appeal to this Court. SDCL 15-26A-4(3) provides in pertinent part: “The appellant, or his or her counsel, shall serve the notice of appeal and docketing statement on counsel of record of each party other than appellant, or, if a party is not represented by counsel, on the party at his or her last known address.” (Emphasis added). Failure to timely serve and file a notice of appeal is jurisdictionally fatal to the appeal. Hardy v. W. Cent. Sch. Dist., 478 N.W.2d 832, 834 (S.D.1991) (citing W. States Land & Cattle Co., Inc. v. Lexington Ins. Co., 459 N.W.2d 429, 432 (S.D.1990)).

[¶ 6.] Typically, the parties to a case can be identified by referring to the parties named in the captions on the pleadings and other formal legal documents filed in [834]*834the proceeding. This is not necessarily true, however, in a case such as this captioned, ‘“In the Matter of,’ rather than ‘John Doe v. Frank Roe.’ See Reliance Ins. Co. v. Public Service Commission, 250 N.W.2d 918, 926 (N.D.1977) (recognizing that identifying the named parties to a proceeding can be difficult where the proceeding is entitled “In the Matter of’). In this case, therefore, the substantive law on parties in trust proceedings must be consulted to identify the parties that Enchanted World was required to serve with its notice of appeal.

[¶ 7.] This was a cy pres proceeding. Roughly speaking, [cy pres] is the doctrine that equity will, when a charity is originally or later becomes impossible or impracticable of fulfillment, substitute another charitable object which is believed to approach the original purpose as closely as possible. It is the theory that equity has the power to revise a charitable trust where the settlor had a general charitable intent in order to meet unexpected emergencies or changes in conditions which threaten its existence.

Ronald Chester, George Gleason Bogert & George Taylor Bogert, The Law of Trusts and Trustees § 431 (3d ed. 2005).

[¶ 8.] With regard to parties in a cy pres proceeding:

Notice of the pendency of a cy pres application should be and customarily is given to the general public, inviting suggestions as to a substitute plan, and institutions or persons seeking to secure benefits from the application are heard and sometimes permitted to intervene. If the settlor is living, he should be consulted and his suggestions considered. Unsuccessful claimants of the fund should not be allowed to appeal from a decree exercising the cy pres power. The court allows costs and counsel fees in its discretion.
A suit to secure the application of cy pres may be brought by the trustee or a sub-trustee, or by the Attorney General or other public official authorized to represent the public, in his own name or on the relation of interested persons. In a few cases, individuals or institutions which hoped to get benefits from the alteration and enforcement of the trust have been allowed to sue, but these cases are still regarded as somewhat abnormal and in some instances were based on the lack of any objection to the parties plaintiff....
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If the suit for cy pres application is brought by the Attorney General, the trustee will be a necessary party defendant; and if the trustee is the plaintiff, the Attorney General should be joined as a defendant. Sometimes the settlor, if living, or those succeeding to his property interests on his death, are named as defendants in order to prevent them from claiming that they have resulting trust interests on failure of the trust and to bind them by decree, although they may not be necessary parties.
Possible future beneficiaries of the charity need not be named as defendants, since they are represented by the Attorney General. Likewise, prospective new trustees or possible new absolute holders of the property are not necessary defendants in a cy pres application.

Id. at § 441 (emphasis added).

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Related

In Re Reese Trust
2009 SD 111 (South Dakota Supreme Court, 2009)

Cite This Page — Counsel Stack

Bluebook (online)
2009 SD 111, 776 N.W.2d 832, 2009 S.D. LEXIS 187, Counsel Stack Legal Research, https://law.counselstack.com/opinion/enchanted-world-doll-museum-v-cortrust-bank-na-sd-2009.