Schlaeppi v. Delaware Trust Co.

525 A.2d 562, 1986 Del. Ch. LEXIS 461
CourtCourt of Chancery of Delaware
DecidedSeptember 17, 1986
DocketCiv. A. No. 7898
StatusPublished
Cited by4 cases

This text of 525 A.2d 562 (Schlaeppi v. Delaware Trust Co.) is published on Counsel Stack Legal Research, covering Court of Chancery of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schlaeppi v. Delaware Trust Co., 525 A.2d 562, 1986 Del. Ch. LEXIS 461 (Del. Ct. App. 1986).

Opinion

HARTNETT, Vice Chancellor.

This is the latest, and hopefully final, legal proceeding arising out of an inter vivos Trust created by Mrs. Marion duPont Scott in 1960 — long before she died in 1983. Plaintiffs are descendants by adoption of William duPont, Jr., the brother of Mrs. Scott. As such they are a grandnephew, grandniece or great grandniece by adoption of the deceased. They are not, however, blood relatives of Mrs. Scott. They brought this action seeking to be included as beneficiaries under the Trust. The defendant, Delaware Trust Company, the trustee, moved to dismiss the amended complaint. I find that the motion must be granted.

I

The essential facts are not disputed. The late Mrs. Scott executed the Trust in 1960 and amended it in 1970. A second amendment was executed in 1976 but it is not relevant to the present controversy. Section II(4)(a) of the Amended Trust Indenture (hereinafter referred to as “Proviso (a)”) provides, in part:

“For the purposes of this Trust reference to ‘grandnieces and grandnephews and great grandnieces and great grandnephews’ and ‘issue of great grandnieces and issue of great grandnephews’ shall mean lawful blood descendants of the Grantor’s brother, William duPont, Jr., provided always, however, that:
(a) An adopted child and such adopted child’s lawful blood descendants shall not be considered as lawful blood descendants of the adopting parent or parents or of anyone who is an ancestor of the adopting parent.” (Emphasis added.)

This language on its face clearly and unambiguously shows that Mrs. Scott intended to preclude plaintiffs from benefit-ting under the Trust. Plaintiffs, however, assert numerous claims that the language does not preclude them from benefitting from it.

Mrs. Scott died on September 4,1983 and soon thereafter actions concerning the Trust and her Will were filed in this Court: DuPont, et al. v. Delaware Trust Co., Del.Ch., Civil Action No. 7421-NC; and in the Circuit Court of Orange County, Virginia: DuPont, et al. v. Shackelford, et al., Chancery E 84-1. These cases, and a related action, McConnell v. Delaware Trust Co., Del.Ch., Civil Action No. 7673-NG, were ultimately resolved pursuant to a Settlement Agreement executed by all the parties to the suits on October 15, 1984 and approved by this Court and the Virginia Court later that same month. All the present plaintiffs joined in the Settlement Agreement.

The Settlement Agreement, however, did not dispose of all the disputes over the Scott Trust. Paragraph VI(B) of the Settlement Agreement permitted the present plaintiffs to file “a new and separate suit in the Delaware Court raising the adopted children issue.” This “adopted children issue” is defined in Paragraph VI(A) of the Settlement Agreement as “the claim em[564]*564bodied in Count IV” of the Complaint filed in DuPont, et al. v. Delaware Trust Co., Del.Ch., Civil Action No. 7421-NC, the original Delaware action.

On December 28, 1984, plaintiffs filed this present lawsuit. In their Complaint, they alleged that the late Mrs. Scott intended to include plaintiffs as beneficiaries under her Trust (Count I); that Mrs. Scott intended 13 Del. C. § 919(a) to govern the Trust, and thereby intended that plaintiffs be deemed to be lawful blood descendants of William duPont, Jr. (Count II); and that the Fourteenth Amendment to the United States Constitution bars this Court from ruling that plaintiffs are not beneficiaries under the Trust solely because of their adopted status (Count III).

The Trustee responded by urging that plaintiffs bargained away their Count I and Count III claims in the prior Settlement Agreement and that the remaining allegations (Count II of the Complaint) fail to state claims upon which relief can be granted.

II

I will first consider the arguments as to Count II of the Complaint. The Trustee concedes that Count II is not barred by the Settlement Agreement, however it argues that it fails to allege a claim upon which relief can be granted. The allegations of Count II, read in the light most favorable to plaintiffs, challenge the validity of Proviso (a) of the Trust.

Plaintiffs claim that Proviso (a) is invalid because it is contrary to the provisions of 13 Del. C. § 919(a). That subsection is part of subchapter I, chapter 9, title 13 Delaware Code which is the statute that provides for and regulates the adoption of children in Delaware. It states:

“(a) Upon the issuance of the decree of adoption, the adopted child shall be considered the child of the adopting parent or parents, entitled to the same rights and privileges and subject to the same duties and obligations as if he had been bom in wedlock to the adopting parent or parents.”

In Count II of the Complaint plaintiffs also allude to an argument — made more explicitly in Count IV of the First Amended Complaint in the original Delaware action — that 13 Del. C. § 919(a) supersedes Proviso (a). Plaintiffs claim that 13 Del.C. § 919(a) is incorporated by reference into the Trust by Section IV(2) of the Trust which states that Delaware law is to control all questions of the Trust’s construction or validity. Plaintiffs argue that the provisions of 13 Del.C. § 919(a) are inconsistent with Proviso (a), and therefore plaintiffs conclude that Section IV(2) of the Trust (and by implication 13 Del. C. § 919[a]) should prevail over Proviso (a), thereby allowing them to take as beneficiaries under the Trust despite the clear language of Proviso (a).

Plaintiffs’ argument, however, incorrectly states both the scope and the substance of the law of this State. While plaintiffs focus on the language of 13 Del. C. § 919(a), they ignore the holdings in Delaware cases which also constitute Delaware Law. These Delaware cases clearly hold that 13 Del.C. § 919(a) provides only a rebuttable presumption — not a mandate— that adopted children be treated the same as biological children in the construction of the provisions of trust instruments. Wilmington Trust Co. v. Huber, Del.Ch., 311 A.2d 892 (1973), aff'd sub. nom., Benz v. Wilmington Trust Co., Del.Supr., 333 A.2d 169 (1975). This presumption can be overcome by a showing that the trust instrument itself evinces a clear intent to exclude adopted persons. See Benz v. Wilmington Trust, supra, 333 A.2d at 170. See also, Jackson v. Riggs Nat’l Bank of Washington, D.C., Del.Supr., 314 A.2d 178 (1973); Haskell v. Wilmington Trust Co., Del.Supr., 304 A.2d 53 (1973); Wilmington Trust Co. v. Chichester, Del.Ch., 369 A.2d 701 (1976), aff'd, Del.Supr., 377 A.2d 11 at 14 (1977) (“adult adopted persons are permitted to take through their adoptive parents where the pertinent instruments evince no intent to the contrary ”). (Emphasis added.)

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Bluebook (online)
525 A.2d 562, 1986 Del. Ch. LEXIS 461, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schlaeppi-v-delaware-trust-co-delch-1986.