Govern v. Hall

430 N.W.2d 874, 1988 Minn. App. LEXIS 1073, 1988 WL 113857
CourtCourt of Appeals of Minnesota
DecidedNovember 1, 1988
DocketNo. C7-88-918, C6-88-1610
StatusPublished
Cited by1 cases

This text of 430 N.W.2d 874 (Govern v. Hall) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Govern v. Hall, 430 N.W.2d 874, 1988 Minn. App. LEXIS 1073, 1988 WL 113857 (Mich. Ct. App. 1988).

Opinion

OPINION

L.J. IRVINE, Acting Judge.

This is an appeal from an order authorizing the sale of real property which is the corpus of a marital and family trust. This case has been consolidated on appeal with a quiet title action brought to determine the ownership of the property. Summary judgment on the quiet title action was [876]*876granted on the basis of res judicata and collateral estoppel. We affirm in part, reverse in part and remand.

FACTS

On January 9, 1968, Charles L. Govern, as settlor, executed a trust instrument known as the “Revocable Trust of Charles L. Govern.” The revocable trust became irrevocable upon Charles Govem's death on May 4,1968. The revocable trust consisted of a marital trust and a family trust. The revocable trust provided that if the set-tlor’s wife, Irene Govern, survived the set-tlor, then the trust estate would be divided and set aside into two separate shares designated as the marital trust and the family trust. June G. Hall, a daughter of settlor Charles Govern, has acted as sole trustee of both trusts since their inception.

The revocable trust instrument provided that both the marital trust and the family trust were to be administered for the benefit of Charles Govem’s surviving spouse during her lifetime. The revocable trust authorized Irene Govern to appoint the assets held by the marital trust by exercising a power of appointment through her will. The revocable trust provided:

Wife’s Power of Appointment — the set-tlor’s wife shall have the power to appoint the entire corpus of the trust estate free of this trust by her last will and testament (express reference to the power being requisite to its exercise in favor of her estate or in favor of any other appointee or appointees whom she may designate) all in such manner and upon such terms as she may designate. Such powers shall be exercisable by her alone and in all events.

(Emphasis added).

If Irene Govern did not exercise her Power of Appointment, the marital trust assets would become part of the family trust. The revocable trust provided that upon the death of Irene Govern the family “trust estate * * * shall be distributed absolutely free of trust,” equally among the settlor’s children.

Irene Govern died in Illinois on October 30, 1983. At the time of her death, the marital trust and the family trust each held an undivided one-half interest in certain real property located in Eagan, Dakota County, Minnesota. Irene Govem’s last will and testament, which was admitted to probate court in Illinois and affirmed over the objection of June Hall and her sisters, included a provision whereby Irene Govern exercised her power of appointment. This provision of her will appointed to her son, appellant Charles Govern, Jr., the undivided one-half interest in the property held by the marital trust. The express appointment in Irene Govern’s will stated that the undivided one-half interest in the property passed to Charles Jr. “free of the trust.”

In September 1986, June G. Hall, as trastee, filed a petition with Dakota County District Court for authority to have the property appraised and for instructions whether the trustee should sell the property. A hearing on the petition was held on October 28, 1986. The trustee did not ask for instructions on distributing the trust assets or partitioning the property. Appellant appeared pro se. At this hearing, the trustee’s attorneys explicitly called the district court’s attention to the fact that the trusts had terminated and that the assets were distributable five-eighths to appellant and one-eighth to each of the other beneficiaries. June Hall testified that the trusts had received a notice of special assessments in the amount of $79,366.38 relating to the subject property, that the marital trust was indebted to the family trust in the amount of $26,701.87 and that both trusts were indebted to their lawyers for legal fees. She further testified that there were no cash assets available in the trusts to satisfy these obligations and that it was advisable for the subject property to be sold.

By a December 1, 1986 order, the trial court specifically found as a fact that each of the trusts included an undivided one-half interest in the subject property. This order instructed the trustee to have the property appraised and authorized the trustee to sell the property only after obtaining approval of such sale from the court after further hearing.

[877]*877In January 1988, June Hall petitioned the district court for an order authorizing the sale of the property to Sienna Corporation in accordance with the prior order of December 1986. A hearing on the petition was held on March 14, 1988. Appellant appeared pro se at this hearing and objected to the inadequacy of the appraisal and the terms of the proposed sale. He also claimed that the land in the marital trust was his and that the trustee had no authority to sell it.

In an order dated March 23, 1988, the trial court found each of the trusts owned an undivided one-half interest in the property. The trial court also found that it was in the best interest of the trusts and the beneficiaries that the property be sold to the Sienna Corporation and ordered the trustee to complete the sale. The trial court made no finding that the Power of Appointment had been exercised, or that appellant now was entitled to the marital trust assets. This order was appealed.

In May 1988, appellant commenced a quiet title action against the trustee, the other beneficiaries in the family trust, Sienna Corporation, and the City of Eagan. The quiet title action sought to establish that appellant individually owned, at the very least, an undivided one-half interest in the entire property free and clear of the marital trust. Appellant also sought to partition the property. Appellant alternatively asked that if partition could not be accomplished, that the subject property be sold and the net proceeds be distributed to the beneficiaries in proportion to the interest in their trust.

The trial court granted the trustee’s motion for summary judgment on the basis that appellant’s claims were barred by res judicata and collateral estoppel. Appellant also appealed from this judgment. The quiet title action has been consolidated with the trust action on appeal.

ISSUES

1. Did the trustee have authority to sell, and did the trial court have jurisdiction to order the sale of, the subject property previously held by the marital trust?

2. Is the quiet title action barred by res judicata and collateral estoppel?

ANALYSIS

1. Appellant claims that the trial court had no authority to order the marital trust assets be sold and that the trustee lacked any authority to sell the trust property, arguing that the trust terminated when Irene Govern died and that by operation of law, title to the marital trust property vested in him. Appellant further claims that the trial court had no jurisdiction and the trustee had no authority over the marital trust assets, because Irene Govem’s will stated that the marital trust property was to pass to appellant “free of the trust.”

The proceeding to sell the property was initiated by the trustee under Minn.Stat. § 501.35 (1986). This section provides that a trustee may petition the court for instructions.

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Related

Estate of Govern v. Commissioner
1996 T.C. Memo. 434 (U.S. Tax Court, 1996)

Cite This Page — Counsel Stack

Bluebook (online)
430 N.W.2d 874, 1988 Minn. App. LEXIS 1073, 1988 WL 113857, Counsel Stack Legal Research, https://law.counselstack.com/opinion/govern-v-hall-minnctapp-1988.