[l\IT£R£D JAN 1 3 20tr
STATE OF MAINE BUSINESS AND CONSUMER COURT CUMBERLAND, ss Location: Portland Docket No.: BCD-CV-2014-07 /
4MJt- GW'Yl-IJ--13-1 4- Barbara T. Martin, Trustee of the MARY ) LOUISE MIKOLS LIVING TRUST ) U/T/D October 17,2012. ) ) Plaintiff/Counterclaim Defendant, ) ) V. ) ) CYNTHIA C. HARRIS, ELIZABETH ) H. MIKOLS, JULIA A. HARRIS, AND ) APRIL F. PARRAS, et al. ) ) Defendants I Counterclaim Plaintiffs ) )
ORDER ON DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT AND ON CROSS-MOTIONS RELATING TO NO-CONTEST PROVISION
This Order addresses the Motion for Partial Summary Judgment filed by
Defendants/Counterclaim Plaintiffs' Cynthia C. Harris, Elizabeth H. Mikols, Julia A. Harris,
and April F. Parras et al. (collectively the "Harris Defendants") on Counts III and V of the
Harris Defendants' Counterclaim, which relate to the terms of Section 6.01 ofthe Mary Louise
Mikols Living Trust dated October 17, 2012 (the "Trust"). This Order also addresses the
cross-motions for summary judgment that the parties have filed regarding the no-contest
provisions of the Trust.
I. FACTUALBACKGROUND
In 2012, Mary Louise Mikols ("Mary Louise") lived and resided in Eagle Lake, Maine.
(Supp. S.M.F. ~ 1; Opp. S.M.F. ~ 1.) On or about June 28, 2012, Mary Louise patronized the
office ofWilliam Smyth of Smyth and Associates, P.A.located in Kennebunk, Maine to discuss
and seek legal counsel in the revision of her estate plan. (Supp. S.M.F. ~ S; Opp. S.M.F. ~ s.)
1 At the time of her first meeting with Attorney Smyth, Mary Louise was 84 years old. Id. Mary
Louise met with Attorney Smyth on three occasions and exchanged a series of phone calls. 1
(Supp. S.M. F. tJ 6; Opp. S.M.F. tJ 6.) During the course of these meetings, Attorney Smyth
drafted a new last will and testament, as well as several other estate planning documents.
(Supp. S.M.F. tJ 7; Opp. S.M.F. tJ 7.) Smyth also drafted an inter vivos trust to dispose of
certain real property and accounts held by Mary Louise. (Supp. S.M.F. tJ 8.) Mary Louise had
concerns that a beneficiary might challenge or contest her estate plan after her death. As a
result, Smyth included no-contest provisions in the will and the Trust. (Pl.'s A.S.M.F. tJ 55;
Defs.' Rep. A.S.M.F. tJ 55.)
The final meeting was held on August 2, 2012. During this meeting, Mary Louise
executed the new Last Will and Testament as well as a Durable Power of Attorney naming her
daughter, Barbara Martin, as personal representative and attorney-in-fact. (Supp. S.M.F. tJ 9;
Opp. S.M.F. tJ 9.) According to statements by the parties, the newly executed will was meant
to be a temporary document in place only until the Trust and pour-over will were
implemented. (Pl.'s A.S.M.F. tJ 58 Defs.' Rep. A.S.M.F. tJ 58.)
On or about September 1, 2012, Mary Louise travelled to Kentucky to visit her other
daughter, Judith Montoya, and to undergo a routine endoscopy procedure during the visit.
(Supp. S.M.F. tJ 10; Opp. S.M.F. tJ 10.) However, Mary Louise suffered a reaction from the
procedure and fell into a coma. On September 5, 2012, Ms. Martin contacted Attorney Smyth
and requested that he send the executed estate planning documents so she could bring them to
Kentucky. 2 (Supp. S.M.F. tJ 11; Opp. S.M.F. tJ 11.) Smyth responded by emailing Ms. Martin
1 Though her daughter, Barbara Martin, recommended Attorney Smyth, Mary Louise attended all three meetings with Mr. Smyth alone. (Defs.' Rep. A.S.M.F. ~ 50.) 2 The parties dispute whether Ms. Martin requested the unexecuted Trust document on September 5,
20I2 when she requested the other estate planning documents from Attorney Smyth. (Supp. S.M.F. ~ IS; Opp. S.M.F. ~ IS.) Ms. Martin contends that she requested only the executed documents.
2 all of Mary Louise's estate planning documents, including the unexecuted Trust instrument.
(Supp. S.M.F. ~ 14; Opp. S.M.F. ~ 14.) In said email, Attorney Smyth instructed Ms. Martin
how to execute the document if Mary Louise was unable to sign on her own. (Supp. S.M.F. ~
15; Opp. S.M.F. ~ 15.)
Between early September and October 17th, 2012, Mary Louise regained consciousness,
but did not execute the Trust document. 3 (Supp. S.M.F. ~ 16; Opp. S.M.F. ~ 16.) On October
15, 2012, Mary Louise began to fail rapidly. On or about October 17, 2012, Ms. Martin
requested another copy of the unexecuted Trust instrument.4" (Supp. S.M.F. ~ 18; Opp. S.M.F.
~ 18.) Attorney Smyth sent a second email to Ms. Martin instructing her how the Trust
should be executed if Mary Louise was unable to sign on her own. (Supp. S.M.F. ~ 20; Opp.
S.M.F. ~ 20.) Thereafter, on the same day, Barbara Martin executed the Mary Louise Mikols
Living Trust on Mary Louise's behalf. 6 (Supp. S.M.F. ~ 21.) Mary Louise passed away on
October 20, 2012. (Supp. S.M. F.~ 2S; Opp. S.M.F. ~ 2S.)
The Trust was to be funded with various real property and bank accounts held by Mary
Louise. However, most of the accounts were either joint accounts or payment on death
accounts, which benefited a number ofheirs. 6 (Supp. S.M.F. ~ 22.) Upon Mary Louise's death
only three pieces of real property were transferred to the Trust including: the Imperial Beach,
California property; a home in Eagle Lake, Maine; and land in Oroville, California. (Supp .
.~ The parties dispute the number of days Mary Louise was in a coma. Ms. Martin contends that Mary Louise regained consciousness on September 6, 2012, whereas the Harris Defendants contend that she regained consciousness on September 10, 2012. ·J· The parties dispute whether October 17, 2012 was the first time Ms. Martin had requested the Trust
instrument from Attorney Smyth. 5 Barbara Martin remains unsure of the date the Trust instrument was executed, but admits that it was
subsequent to the receipt of the documents from Attorney Smyth. (Opp. S.M.F. ~ 21.) 6 The Parties dispute whether enough action was taken by Mary Louise and Ms. Martin to fund the Trust. Ms. Martin claims that the creation of the pour-over will was intended to assist in the funding of the Trust. (Supp. S.M.F.~ 24; Opp. S.M.F. ~ 24.)
3 S.M.F. ~~ 32, 53; Opp. S.M.F. ~~ 32, 33.) Because the bank accounts failed to transfer into
the Trust, the Trust has limited funds to operate. 7 (Supp. S.M.F. ~ 34; Opp. S.M. F. ~ 34.)
Following Mary Louise's death, Ms. Martin, as successor trustee under the terms of the
Trust, retained Attorney Smyth to assist in the implementation of the Trust. (Pl.'s A.S.M.F. ~
61; Defs.' Rep. A.S.M.F. ~ 61.) Section 5.02 deems the Trust to be in an administrative phase
"for a reasonable period oftime necessary to complete [] administrative tasks." See Mary
Louise Mikols Living Trust§ 5.02. Section 6.01 of the Trust appoints Mary Louise's daughter,
Cynthia Harris, as Trustee of the Imperial Beach, California property. In April2013, Ms.
Martin changed the locks on the Imperial Beach property and refused to provide keys to Ms.
Harris who intended to occupy the premises pursuant to Section 6.01 of the Trust instrument. 8
(Supp. S.M.F. ~ 35; Opp. S.M.F. ~ 35.) Ms. Martin explained to Ms. Harris and her other
siblings that she believed the Trust to be in an administrative phase until the Trust could be
adequately funded. (Opp. S.M.F. ~ 39.) On May 7, 2013, Ms. Martin again contacted her
siblings and beneficiaries under the Trust and explained that the Trust still did not have
enough liquid assets to satisfy its obligations. Ms. Martin recommended that the Imperial
Beach property be put on the market and sold. 9 (Supp. S.M.F. ~ 43; Opp. S.M.F. ~ 43.)
Ms. Martin asserts that because the Trust is still in the administrative phase pursuant
to Section 5.02 of the Trust instrument, the Harris Defendants are not entitled to occupation or
7 Ms. Martin asked the beneficiaries of the payment on death and joint accounts to return the sums to fund the Trust. Ms. Martin contends that the beneficiaries refused. (Pl.'s A.S.M.F. ~ 60; Defs.' Rep. A.S.M.F. ~ 60.) The beneficiaries contend that they did not have enough information from Ms. Martin to contribute their funds to the Trust. (Defs.' Supplemental S.M.F. ~ 24.) Ms. Martin further qualifies this fact by indicating that the Trust has remained unfunded since Mary Louise's death and because no beneficiaries were willing to return their funds, Ms. Martin has had to administer the Trust with no liquid assets. 8 Ms. Martin alleges that she sought to prevent all trespassing from the property and did not
specifically exclude Ms. Harris. (Opp. S.M.F. ~ S4.) 9 The email correspondence from Ms. Martin to her siblings recommends that the property be sold, but
also asks for alternative suggestions on how they might hold onto the property. (Supp. S.M.F. ~ 4S; Opp. S.M.F. ~ 4S.)
4 use of the real property held by the Trust. The Harris Defendants claim that the provisions of
the Trust are not contingent on completion of the administrative phase and allege that the
trustees of the sub-trusts were entitled to the trust property immediately upon the death of
Mary Louise.
II. STANDARD OF REVIEW
M.R. Civ. P. 56( c) instructs that summary judgment is warranted "if the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any ... show that there is no genuine issue as to any material fact set forth in those statements
and that any party is entitled to a judgment as a matter oflaw." To survive a motion for
summary judgment, the opposing party must produce evidence that, if produced at trial, would
be sufficient to resist a motion for a judgment as a matter oflaw. Rodrigue v. Rodrigue, 1997
ME 99, ~ 8, 694 A.2d 924. For purposes of summary judgment, "[a] material fact is one that
can affect the outcome of the suit." Burdzel v. Sobus, 2000 ME 84, ~ 6, 750 A.2d 57S (citing
Kenny v. Dep't if Human Services, 1999 ME 158, ~ S, 740 A.2d 560); see also Mcilroy v. Gibson's
Apple Orchard, 2012 ME 59, ~ 7, 4S A.sd 948. A genuine issue exists when sufficient evidence
supports a factual contest to require a fact-finder to choose between competing versions of the
truth at trial. See Prescott v. Tax Assessor, 1998 ME 250, ~ 5, 721 A.2d 169 (citing Garside v.
Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir. 1990)).
A party wishing to avoid summary judgment must present a prima facie case for each
element of a claim or defense that is asserted. See Reliance Nat'! Indem. v. Knowles Indus. Services,
2005 ME 29, ~ 9, 816 A.2d 6S. "If material facts are disputed, the dispute must be resolved
through fact-finding." Curtis v. Porter, 2001 ME 158, ~ 7, 784 A.2d 18. When the court rules
on a motion for summary judgment, '"[it] is to consider onry the portions of the record referred
to, and the material facts set forth, in the Rule 7(d) statements."' Handy Boat Serv., Inc. v. Prof!
5 Services, Inc., 1998 ME 134, ~ 16, 711 A.2d 1306 (quoting Gerrity Co. v. Lake Arrowhead Corp.,
609 A.2d 293 (Me.1992)). The court will view the evidence in light most favorable to the non-
moving party. See, e.g., Steeves v. Bernstein, Shur, Sawyer & Nelson, P.A., 1998 ME 210, ~ 11, 718
A.2d 186. The parties in this case agree that the Mary Louise Mikols Living Trust is
governed and enforced in accordance with the laws of the State of Maine.
III. ANALYSIS
The Harris Defendants' Motion for Partial Summary Judgment focuses on Count III of
their Counterclaim, alleging breach of trust pursuant to Maine Revised Statutes§§ 801-813,
and Count V of their Counterclaim, seeking a declaration that Cynthia Harris's interest as
trustee in the Imperial Beach property vested immediately upon the death of the grantor and
that Plaintiff/Counterclaim Defendant ("Barbara Martin" or "Ms. Martin") lacks authority to
sell the property.
During the briefing process, Barbara Martin and the Harris Defendants have also
asserted cross-motions on the no-contest provisions of the Trust and will. The two issues are
addressed in the order just framed.
A. Authority of the Administrative Trustee Regarding the Imperial Beach Property
The crux of the parties' legal dispute lies in their differing interpretations of how the
Trust operates. The Harris Defendants suggest that the Trust instrument unambiguously
vested title to the Imperial Beach, California property in Cynthia Harris immediately upon
Mary Louise's death. Conversely, Ms. Martin contends that Section 5.02 of the instrument has
locked the Trust in an administrative phase until such time as it is adequately funded. Acting
as trustee, Ms. Martin has proposed that the Imperial Beach property be sold to fund the Trust.
6 i. Interpretation of the Trust Instrument
Pursuant to the Maine Uniform Trust Code, "[t]he rules of construction that apply in
this State to the interpretation ... and disposition of property by will also apply to the
interpretation of the terms of a trust and the disposition of trust property." I8-B M.R.S. § II2.
Further, the general rules of construction, which apply to deeds and contracts, also apply to
trusts. See In Re Ross Family Tmsts, 2002 ME 89, ~ 5, 797 A.2d I268. In construing a will, a
court must give effect to the testator's intent, as expressed by the language of the will. I8-A
M.R.S. § 2-605. In other words, "[a] court must interpret the will within the four corners of
the document but may use the context of the entire will to interpret specific sections." Estate of
Silsby, 2006 ME 138, ~ 15, 914 A.2d 70S; Cassidy v. Murray, 144 Me. S26, 328, 68 A.2d S90, S91
(1949) (intention of settlor must be found from the language ofthe will read as a whole); Skillin
v. Skillin, ISS Me. 347, S50, I77 A. 706, 707 (1935) (A trust instrument "must be construed as
an entirety and in such manner as to give life to all its parts"). The settlor's intent is "gathered
from the whole will." In re Pike Family Trusts, 2012 ME 8, ~ 7, S8 A.sd 329, (quoting Univ. of
Me. Found. v. Fleet Bank ofMe., 200S ME 20, ~ 10,817 A.2d 871).
The proper interpretation of unambiguous language in a will is a question oflaw. Lord
v. Soc'yjor the Pres. ojNew Eng. Antiquities, Inc., 6S9 A.2d 623, 624 (Me. 1994); In re Estate of
Hodgkins, 2002 ME I54, ~ 8, 807 A.2d 626; Langille v. Norton, 628 A.2d 669, 670 (Me. 1993);
Reed v. A.C. McLoon & Co., SII A.2d 548, 551 (Me. I97S); Susi v. Davis, ISS Me. S54, S62, 177
A. 610, 613 (19S5).
The Law Court has long held that "[a] testator is presumed to use words in their
ordinary meaning, if such a construction would not be in conflict with his manifest intention."
Osgood v. Lovering, SS Me. 464,464 (185I); Lyon v. Lyon, 88 Me. S95, 400, S4 A. 180, 18S
(1896). However, when language in a will is ambiguous or subject to two or more
7 interpretations, the Law Court has stated that "[e]xtrinsic evidence may be admitted to resolve
any ambiguity in the will." Estate of Leighton, 6S8 A.2d 725, 724 (Me.1994 ). There is, however,
"a clear distinction between the admission of extrinsic evidence offacts and circumstances
existing at the time of the execution of the will and the admission of testator's declaration of
intent," the former being admissible and the latter inadmissible. First Portland Nat'l Bank v.
Kaler-Vaill Mem'l Home, 155 Me. 50, 62, 151 A.2d 708, 715 (1959) (emphasis in original).
ii. The Operation of the Mary Louise Mikols Living Trust
In accordance with the well-established principles set forth above, the court looks to the
settlor's intent at the time the Trust was executed. Looking at the instrument as a whole, it is
clear that Section S.OS of the Trust unequivocally appoints Barbara Martin as successor trustee
of the Trust. 10 In such position, Ms. Martin was conferred the discretionary power to pay from
Trust property the following: expenses from settlor's last illness, funeral, and burial or
cremation, including expenses of memorials and memorial services; legally enforceable claims
against settlor or settlor's estate; expenses relating to the administration of the Trust and
settlor's estate; and court-ordered allowances for those dependent upon the settlor. See Mary
Louise Mikols Living Trust§ 5.0S. It is further undisputed that upon Mary Louise's death,
Section 5.02 of the Trust established an "administrative trust" for the specific purposes set forth
in Article Five:
Section 5.02 Administrative Trust:
After my death and before the distribution of trust property as provided in the subsequent Articles of this trust, the trust will be an administrative trust, but may
10Section 3.03 Trustee Succession after My Death After my death, this Section will govern the removal and replacement of my Trustees. (a) Successor Trustee I name the following to serve as successor Trustees after my death, replacing any then serving Trustee, in the order named: Barbara T. Martin; then Judith E. Montoya; and then Paul J. Martin.
8 continue to be known as the Mary Louise Mikols Living Trust. The administrative trust will continue for a reasonable period of time necessary to complete the administrative tasks set forth in this Article.
Considering the plain and ordinary meaning of Section 5.02, it is clear that Mary Louise
intended to establish an administrative phase to ensure that certain administrative tasks be
completed before the distribution ofTrust property. The administrative trust is to continue for
a reasonable period until such time as the tasks set forth in Article 5 are complete. To date, the
Trust remains unfunded. To fund the Trust, Ms. Martin has asked beneficiaries of Mary
Louise's pay-on-death accounts to return funds to the Trust and has recommended that the
Imperial Beach property be sold to fund the Trust. (Supp. S.M.F. ~ 4S; Opp. S.M.F. ~ 4S.)
The Maine Law Court has long held that, "the chief issue is to be determined from the
intent of testatrix, not to be resolved by study of separate clauses, sentences, and paragraphs by
themselves, but by orienting the problem to the entire instrument." Thaxter v. Fry, 222 A.2d
686, 688 (Me. 1966). Thus, in reading the four-corners of the instrument and interpreting the
document as a whole, the court must also look to the plain language ofSection 6.01. Said
Section unambiguously establishes a sub-trust for real property located in Imperial Beach,
California, and appoints Cynthia Harris as the sole trustee. 11
The Harris Defendants rely on generally accepted rules of construction noting,
"[w]here a word is used in one sense in one part of a will, and there is nothing to indicate a
different meaning when the same word is used in another part, it may be presumed that the
same meaning was intended." Blaine v. Dow, 111 Me. 480, 482, 89 A. 1126, 1128 (1914). Here,
11 Section 6.01 Specific Distribution to Trust Share for Cynthia C. Harris After my death, Cynthia C. Harris, as Trustee, shall hold my real estate located in Imperial Beach, California in trust for the use of my descendants. I specifically authorize Cynthia C. Harris to occupy the property as her primary residence, should she wish to do so. It is my desire that my Trustees permit my descendants to vacation at the property at such times as may be mutually agreed upon by my Trustees and those ofmy descendants who wish to use the property. After a period of five years following my death, my Trustees, by unanimous agreement, may sell the property and distribute the proceeds to the trust share established for Cynthia C. Harris under Article Seven.
9 Mary Louise utilized the phrase "[a]fter my death" at the beginning of both Sections 5.02 and
6.0 1. However, in other similar provisions of the Trust, Mary Louise began the sections with
the language "[a]s soon as practicable after my death." See, e.g., Mary Louise Mikols Living
Trust§ 6.02. The Harris Defendants contend that this change in language is demonstrative of
the settlor's intent that Cynthia Harris was to be vested immediately as trustee of the Imperial
Beach property notwithstanding the administrative phase.
While Defendants' argument is persuasive, the court cannot ignore the controlling
language in Section 5.02 which states, "[a]fter my death and bifore the distribution of trust
property as provided in the subsequent Articles of this trust ... " (emphasis added). This indicates
that Section 5.02 must be satisfied prior to the distribution of Trust property provided in
subsequent sections, including Section 6.01 regarding the Imperial Beach property. Thus, the
administrative phase shall continue for a reasonable period of time until the Article Five
obligations can be carried out.
For that reason, Defendants are not entitled to summary judgment on whether Cynthia
Harris was vested with immediate possession as trustee of the Imperial Beach property.
Control over that property remains with Barbara Martin as administrative trustee until the
property is distributed. The court has considered whether to render judgment against the
Harris Defendants on this issue, see M.R. Civ. P. 56( c) ("summary judgment, when appropriate,
may be rendered against tl1e moving party"), and elects not to, mainly because whetl1er Ms. Martin
is justified in not having distributed t11e Imperial Beach property already to Ms. Harris cannot be
determined on the present record.
The next question is whether the Imperial Beach property may be sold in order to fund
the administrative phase of the trust. For the reasons that follow, the court's answer to that
question is, maybe, but not yet.
10 111. Authority of the Trustee to Sell Trust Property To Fund the Administrative Trust
Maine has limited case law defining the authority of the trustee of an "administrative
trust." Thus, the court looks to the case law of sister states for guidance. Massachusetts, for
example, limits the powers of an administrative trustee to ministerial tasks. See Boston Safe
Deposit & Trust Co. v. Stone, 203 N.E.2d 547, 552 (Mass. 1965) ("Administrative trust provisions
... are ordinarily designed merely to simplify distribution and to make unnecessary requests
for court instructions. Such a provision gives to trustees no discretion to shift beneficial
interests in the trust assets.").
Here, Ms. Martin contends that Mary Louise intended that the Trust be implemented
in discrete phases, beginning with the administrative phase and progressing to the sub-trusts
listed in Article Six. The Harris Defendants argue that notwithstanding Section 5.02, general
principles of trust law dictate that specific dispositive provisions should take precedence over
general administrative provisions.
The Harris Defendants cite The Restatement (Third) if Property (Wills & Don. Trans.)§
11.3 (2003), which states that in construing donative documents, "[t]he foundational
constructional preference is for the construction that is more in accord with common intention
than other plausible c~:mstructions." The Restatement goes on to explain:
Constructional preferences derived from the preference for common intention include the constructional preferences for ... the construction that is more in accord with the donor's general dispositive plan than other plausible constructions [as well as] the construction that renders the document more effective than other plausible constructions, including the construction that favors completeness of disposition and the construction that avoids illegality.
Id. at §1103 (c)(1)-(6).
In this case, while the Trust remains unfunded and in an administrative phase, denying
Cynthia Harris the possession and use of the Imperial Beach property prohibits and impedes
11 the efficient distribution of the Trust. Further, Section 5.02 does not give Ms. Martin the
authority as trustee to sell the Imperial Beach property or any other property that was granted
by the settlor to designated beneficiaries. 12 Section 12.01 specifically prohibits any trustee
from exercising any power inconsistent with the beneficiaries' right to enjoyment of the Trust
property.
Section 6.01 provides Ms. Martin, as successor trustee, the authority to sell the Imperial
Beach property only after a period of five years following Mary Louise's death and by
unanimous agreement among the trustees. Neither of these conditions has been satisfied.
Further, a plain reading of the Trust instrument makes clear that any proceeds derived from
the sale of the property are to be contributed to Cynthia Harris' trust share. Because Ms.
Martin does not, at this time, have the authority to sell the Imperial Beach property and
because all proceeds from the sale of the property are to be distributed to the trust share
established for Cynthia Harris, the Court sees no reason for Ms. Martin to continue to hold the
IV. A Court-Ordered Sale To Fund the Administrative Trust
The fact that Barbara Martin does not have authority today to sell the Imperial Beach
property without the consent of the Harris Defendants does not mean that she is without
recourse to fulfill her responsibilities as administrative trustee.
Maine courts have exercised their equitable powers to approve modifications or
deviations from the terms of a trust due to unanticipated circumstances. See e.g., Richardson v.
Knight, 69 Me. 285, 287 (1879) (allowing stocks to be transferred into more stable securities
absent language in the testamentary instrument); City ofAugusta v. Attorney Gen., 2008 ME 51,
~ s 1, 94.'3 A.2d 582, 591 (granting modification to both administrative and dispositive terms of
12 While other sub-trusts were created in Article Six of the Trust instrument those properties are
outside of the scope of the considered motions.
12 the Cony Charitable Trust allowing the City of Augusta to sell the property upon which the
original Cony High School was located). 13 Pursuant to 18-B M.R.S.A § 412 (1):
Modification or Termination: The court may modify the administrative or dispositive terms of a trust or terminate the trust if, because of circumstances not anticipated by the settlor, modification or termination will further the purposes of the trust. To the extent practicable, the modification must be made in accordance with the settlor's probable intention.
This statute applies to all trusts created "before, on, or after July 1, 2005." 18-B M.R.S.A §
1104( 1 )(A).
Section 412 is unambiguous. It permits modification ofboth administrative and
dispositive trust terms in the event of unanticipated circumstances. Any modification or
termination must be made, if at all practicable, in accordance with the settlor's intent. !d.; City
ofAugusta, 2008 ME 51, ~ s 1, 943 A.2d 582. Further, the Maine Comments to Section 412 indicate that Section 412 "was intended to expand Maine law beyond Porter to permit
modification of dispositive terms of trusts and eliminate the requirement that an emergency
exist." 14 Id. ~ 32.
Thus, while the court recognizes that the Imperial Beach sub-trust became effective
upon the death of Mary Louise, notwithstanding the administrative trust in place, the court
also leaves open the possibility that the Imperial Beach property will need to be sold as the
result of unanticipated circumstances. Those circumstances could include Mary Louise
Mikols's mistaken assumption that funds from accounts would be available to fund the Trust in
the manner she intended. Further, should the continuation of the trust on its existing terms
1 ~ The court allowed the modification even though the original intent of the settlor was for the property to be used as a school and held in trust in perpetuity. Clty ofAugusta, 2008 ME 51,~ 15,943 A.2d 582. I·> "Comment a of the Restatement of Law (Third) Trusts§ 66 (2003) also indicates emergencies are no longer necessary, and that modification or even termination because of unforeseen circumstances are permitted in order to give effect to what the settlor probably would have intended had he anticipated the change. This includes modification to provisions expressly forbidding the sale of a trust's corpus." I d. n. 16 (citing Restatement of Law (Third) Trusts§ 66 cmt. b (2003)).
13 "become impracticable or wasteful or impair the trust's administration" the court may modify
the administrative provisions of the Mary Louise Mikols Living Trust and allow sale of the
property. 18-B M.R.S.A § 412.
B. The Parties' Cross-Motions Regarding No-Contest Provisions
Mary Louise included a no-contest provision in both her pour-over will and the Trust
instrument. Based on the plain language of the provisions, Mary Louise sought to prevent
beneficiaries from challenging provisions of the Trust by disinheriting anyone seeking to
challenge the construction of the instruments. Generally, such provisions "serve to protect
estates from costly and time-consuming litigation [by] minimize[ing] family bickering over
the competence and capacity of testators, and the various amounts bequeathed. However, the
function of the court is to effect the testator's intent to the greatest extent possible within the
bounds of the law." In re Seymour, 1979-NMSC-069, ~ 19, 93 N.M. 328, 332, 600 P.2d 274.
The no-contest clause in the Mary Louise Mikols Living Trust is unambiguous. It
states:
Section 13.03 Contest Provision The right of a beneficiary to take any interest given to him or her under this trust or any trust created under this trust instrument will be determined as if the beneficiary predeceased me without leaving any surviving descendants if that beneficiary, alone or in conjunction with any other person, engages in any of these actions: Contests by a claim of undue influence, fraud, menace, duress, or lack of testamentary capacity, or otherwise objects in any court to the validity of this trust, any trust created under the terms of this instrument, my Will, or any beneficiary designation of any annuity, retirement plan, IRA, Keogh, pension, profit-sharing plan, or insurance policy signed by me, (collectively referred to in this Section as Document or Documents) or any amendments or codicils to any Document; seeks to obtain adjudication in any court proceeding that a Document or any of its provisions is void in any court proceeding, or otherwise seeks to void, nullify, or set aside a Document or any ofits provisions; files suit on a creditor's claim filed in a probate of my estate, against the trust estate, or any other Document, after rejection or lack of action by the respective fiduciary;
14 files a petition or other pleading to change the character (community, separate, joint tenancy, partnership, domestic partnership, real or personal, tangible or intangible) ofproperty already characterized by a Document; files petition to impose a constructive trust or resulting trust on any assets of the trust estate; or participates in any of the above actions in a manner adverse to the trust estate, such as conspiring with or assisting any person who takes any of these actions.
Mary Louise Mikols Living Trust § I3.0S. Specifically, Mary Louise sought to prevent the
following contests: "undue influence, fraud, menace, duress, O lack of testamentary capacity, or
other[] [objections] in any court to the validity of[the] trust." Id.
The Maine Probate Code states, "[a] provision in a will purporting to penalize any
interested person for contesting the will or instituting other proceedings relating to the estate
is unenforceable if probable cause exists for instituting proceedings." IS-A M.R.S. § S-905.
Thus, any claim by the Harris Defendants falling into the above-mentioned causes of action
must be supported by adequate probable cause. See In re Estate of Shumway, 9 P.sd I062, 1066
(Ariz. 2000) (explaining Section S-905 expressly invalidates a no-contest clause if a challenger
has probable cause to assert the claim).
"Whether there has been a 'contest' within the meaning of a particular no-contest clause
depends upon the circumstances of the particular case and the language used much depends on
the phrasing and reach of the in terrorem clause even though such clauses must be strictly
construed." Redman-Tafoya v. Armijo, 2006-NMCA-OII, ~ 55, ISS N.M. S36, S4S, I26 P.3d
I200 (quoting In re Watson, 22S Cal. Rptr. I4, I6 (Cal. Ct. App. I9S6)). Further, "[a] case-by-
case evaluation is necessary to decide whether an heir's conduct, including legal actions,
constitute a contest of a will." Armijo, ISS N.M. SS6, S45, I26 P.sd at I209.
While Maine courts have had little opportunity to question the implications and validity
of no-contest provisions in estate documents, in In re Estate ofLewis, the Law Court
unambiguously held that a no-contest or in terrorem clause may not be "invoked or otherwise
15 used to chill a legitimate legal action." 2001 ME 74, ~ 10, 770 A.2d 619. Other states, which
adhere to the Uniform Probate and Trust Codes, have consistently held "no-contest provisions
are valid and enforceable ... but they are not effective to disinherit a beneficiary who has
contested a will in good faith and with probable cause to believe that the will was invalid."
Armijo, 1S8 N.M. 8S6, 846, 126 P.sd at 1210. Generally, "courts will not apply a no-contest
provision in cases where the beneficiaries have not challenged the will and do not seek to
nullify the estate document." Id. at 1214.
Ms. Martin contends that no probable cause or good faith can be discerned from the
Harris Defendants' pleadings and that the Harris Defendants simply prefer the terms ofMary
Louise's previous estate plan. Ms. Martin avers that the counterclaims asserted by the Harris
Defendants should be interpreted as a challenge to the validity of the Trust in its entirety.
Although some ofthe Harris Defendants' defenses sweep that broadly, the thrust of the
counterclaims presented by the Harris Defendants is not to challenge the validity of the Trust,
but rather, to challenge Ms. Martin's interpretation of the Trust and her actions in the
implementation of the Trust as designated successor trustee.
Count I of the Harris Defendants' counterclaim challenges Ms. Martin's action as
holder of Power of Attorney and her failure to ensure that the Trust was adequately funded.
Under this claim, the Harris Defendants seek reliefpursuant to 18-B M.R.S. § 412, which
allows the court to modify or terminate the Trust. Count II makes a claim against Ms. Martin
for her personal negligence in the funding and operation of the Trust. Count III alleges breach
of trust on behalf of Ms. Martin as trustee and alleges a breach of the duty to administer the
trust impartially; breach of the duty to administer the Trust in good faith; breach of the duty to
inform beneficiaries of material information; and breach of the terms of the Trust. Count IV
requests that the court exercise its powers to terminate an uneconomic trust pursuant to 18-B
16 M.R.S. § 414. Finally, Count V requests specific declaratory reliefpreventing Ms. Martin from
selling the Imperial Beach property and imposing a constructive trust over assets Ms. Martin
holds personally. None of these claims seek to invalidate or nullify a provision of the Trust.
Counts I and IV ofthe Harris Defendants' counterclaims are authorized under Maine
law by statute. The pursuit of claims authorized by statute "are [] to be characterized not as
attacks on the validity of the Will or of a provision of the Will, but as legal actions under a
valid Will with valid provisions to enforce rights granted expressly by statute." Armijo, 1.38
N.M. 8.36, 850, 126 P ..sd at 1210. Counts II, III, and V challenge only Ms. Martin's personal
actions as trustee and are therefore outside of the scope of Mary Louise's no-contest provision.
Ms. Martin further argues that the Harris Defendants made a tactical decision to
litigate the issue of this case in a separate federal court proceeding while also removing the
original probate action to Superior Court. Ms. Martin contends that this was an intentional act
to ensure that Ms. Martin would be forced to litigate in two forums at once. She further argues
that this action on behalf of the Defendants demonstrates their lack of good faith and probable
cause.
However, "conduct and actions comprising resistance and lack of cooperation, even with
hostility and opinion mixed in, cannot be characterized as attacking the validity of the Will or
as seeking to nullify a material provision in the Will." Id. Thus, the court does not find this
argument persuasive. It is generally accepted that testators and settlors "are still free to
disinherit beneficiaries on any ground that does not violate public policy and that clearly and
specifically expresses what type oflegal proceedings, or what type of other conduct and actions,
[testators or settlors] intend to discourage through the threat of disinheritance." Id. at 1215.
Lastly, Barbara Martin points to certain affirmative defenses asserted by the Harris
Defendants, challenging the validity of the Trust and will. On their face, these defenses do
17 meet the definitions of the no-contest provisions. However, the circumstances surrounding the
Trust in particular supply probable cause for such a challenge-it was Ms. Martin who
recommended that Mary Louise Mikols consult with attorney Smyth, and it was Ms. Martin
who actually signed the Trust. Although there is no indication of undue influence beyond
whatever may be made of those circumstances, those circumstances, coupled with Ms. Martin's
position regarding the administrative trust trumping the Imperial Beach proviso, confers
enough legitimacy to the Harris Defendants' position to avoid a forfeiture through the no-
contest provisions of the will and Trust.
The court denies the cross-motion ofMs. Martin based on the present record. Because
this proceeding is still in progress, it would be inappropriate to grant judgment to the Harris
Defendants on their cross-motion on this issue.
IV. Conclusion
Based on the foregoing, the Harris Defendants are entitled to summary judgment as to
Count V of their Counterclaim insofar as it seeks a declaratory judgment preventing Ms.
Martin from selling the Imperial Beach, California property, without the consent of other
trustees and without authorization from the court. This ruling is without prejudice to
revisitation in the context of an application to the court for authority to sell.
As stated in the Mary Louise Mikols Living Trust, the Trust shall continue in an
administrative phase for a "reasonable period oftime necessary" to complete the administrative
tasks set forth in this Article Five of the Trust. The present record does not enable the court
to decide what is a "reasonable time necessary" to complete the administrative tasks. The
Harris Defendants' motion on Count III of their counterclaim is therefore denied.
Finally, for the reasons given above, the court denies both of the parties' cross-motions
on the issue of the no-contest provision in the Mary Louise Mikols Living Trust.
18 The en try will be:
(1) Defendants' Motion for Partial Summary Judgment is DENIED as to COUNT III
and is GRANTED IN PART as to COUNT V, in that it is DECLARED that Barbara
Martin as successor trustee of the Mary Louise Mikols Living Trust does not have
authority to sell the Imperial Beach Property absent consent of other trustees, or
unanticipated circumstances, or a court order authorizing sale.
(2) Plaintiffs and Defendants' Cross-Motions for Summary Judgment concerning the
no-contest provisions are both DENIED.
Pursuant to M.R. Civ. P. 79(a), the Clerk is herby directed to incorporate the Order by
reference in the docket.
Dated: November 0.2014
Justice, Business & Consumer Court
19 Barbara T. Martin, Trustee of the Mary Louise Mikols Living Trust UIT ID October 12, 2012 v. Cynthia C Harris, Elizabeth H. Mikols, Julia A. Harris, and April F. Parras, et al. BCD-CV-14-07
Barbara T. Martin, Trustee of the Mary Louise Mikols Living Trust UITID October 12,2012 Plaintiff I Counterclaim Defendant
Counsel: William Devoe, Esq. 80 Exchange Street P.O. Box 1210 Bangor, ME 0442-1210
Cynthia C Harris, Elizabeth H. Mikols, Julia A. Harris, and April F. Parras, et al. Defendant I Counterclaim Plaintiffs
Counsel: Christian Chandler, Esq. One Canal Plaza Suite 1000 PO Box 7320 Portland, ME 041112-7320