IN THE DISTRICT COURT OF BANNER COUNTY, NEBRASKA
LEONARD MOSHER, )
Plaintiff, )
) MEMORANDUM ORDER
vs. )
) Case No. CJ13-19
JANICE HERRELL and )
DENNIS MOSHER, )
)
Defendants, )
Trial on the merits of this matter was held . Written arguments were submitted. The Court has reviewed and considered the same. Having so done, the Court makes the following findings of fact and legal conclusions end enters the following order.
General Overview
This is a civil action in which the Plaintiff has sued the Defendant Herrell on the basis of her work as trustee of the Lois Mosher Trust and the Defendant Mosher for items of personal property that he received during the administration of this Trust. The parties are all children of Lois Mosher. The Defendants reside in Wyoming and the Plaintiff Lives and farms in Banner County Nebraska. The Trust was funded with some monies but its principal assets were real estate located in Wyoming and in Nebraska as well as certain items of personal property.
The Plaintiff alleges generally that the Defendant Herrell improperly managed the Trust, that she failed to properly account for her actions in administration of the Trust and that she has not properly wrapped up the Trust. He alleges that the Defendant Mosher has received items of personal property to which be was not entitled and that he resided in a home belonging to the Trust without paying rents for the same and having damaged the same. The Defendant Herrell
has pursued counterclaims against the Plaintiff for theft of Trust property (farm equipment and jewelry and has failed to properly account for his farming activities on Trust property. All of the litigants have incurred substantial attorneys' fees and seeks recovery of the same from their opponents.
Legal Conclusions
The Court will make certain factual findings in considering the various issues that have been raised and litigated herein.
"No Contest" Clause and Standing
Prior to the commencement of the trial, the Defendants filed a Motion for Summary Judgment on the Plaintiffs claims. This Motion for Summary Judgment is predicated on a specific provision of the Lois Mosher Trust. Lois Mosher executed a Revocable Trust Agreement on or about June 6, 1997. This Revocable Trust Agreement sought to establish a mechanism for the administration of assets of Mrs. Mosher and to provide direction for disposition of the same after her death. She was assisted by counsel in the drafting and execution of this document. Two amendments were made to this Trust Agreement.
The First Amendment to Lois Mosher Revocable Trust Agreement was executed on or about March 19, 2009. Among the amendments was to change of Trustee designation. In the original Agreement, the Plaintiff was identified as the first Successor Trustee to the Trust with the Defendant Mosher identified as the next in line and the Defendant Herrell as the final designated Successor Trustee. The First Amendment modified this provision. It became the inverse of that with the Defendant Herrell being named the first Successor Trustee and the Plaintiff as the final designated Successor Trustee. Other amendments were also made therein. Mrs. Mosher was assisted by counsel in the drafting and execution of this Amendment.
The Second Amendment ta Lois Mosher Revocable Trust Agreement was executed on or about May 15, 2009. This Second Amendment related to clarification of certain dispositions of surface rights to certain real estate in Banner County, Nebraska. It also added a "no contest" provision to the Trust Agreement. Mrs. Mosher was assisted by counsel in the drafting and execution of this Amendment. The NO CONTEST provision is set out as Paragraph 2 in the Second Amendment. It creates Paragraph 21 in the Trust Agreement and reads as follows:
"Should any taker under this Trust become an adverse party to the trustee in a proceeding pertaining in any way to the interpretation of this trust, or file a proceeding the purpose of which is to invalidate or change any provision of this trust, such taker shall forfeit his or her entire interest under this trust and such interest shall pass as if that taker predeceased me. This paragraph shall not be construed to limit the appearance by any taker as a witness in any proceeding for the administration of this Trust, nor to limit his or her appearance as a witness only in a proceeding for its construction."
This is a Trust that was created and intended to be administered in accordance with Wyoming law. Therefore, the undersigned must consider the relevant Wyoming law related to the interpretation of such a provision. The Court notes at the outset that such "no-contest" provisions are valid and binding upon the beneficiaries under Wyoming law . See Dainton v.
Watson, 658 P.2d 79 (Wyo . 1983) and Briggs v. Wyo. Nat. Bank of Casper, 836 P.2d 263 (Wyo. 1992).
The Defendant Herrell asserts that the Plaintiff's actions have triggered this "no-contest" provision and that his interests in the Trust are, therefore, forfeit. For reasons more particularly set forth below, the Court agrees that the evidence shows exactly that.
The Plaintiff and the Defendants are the only "takers" pursuant to the Trust. The Plaintiff is obviously an adverse party in this proceeding. He is the person who has pursued this case against the Defendants. The question is whether the Plaintiffs claims and his testimonial assertions implicate either of the ''no-contest" clauses above. In short, is he challenging the interpretation of the Trust or is he attempting to invalidate or challenge any provisions of the Trust? The answer to each of these questions is yes.
The Plaintiff has challenged the Defendant Herrell's interpretation of section 9(c)(1) of the Trust. This finding is demonstrated in a review of the exhibits offered and received at trial. On March 19, 2009, Lois Mosher executed a Mineral Quitclaim Deed from herself and into the Trust. This Deed conveyed to the Mosher Trust all mineral interests in the SW ¼ of Section 24, Township 13 North, Range 57 West of the 6th P.M. in Kimball County. This Quitclaim Deed was executed on the same day as the First Amendment to the Trust was executed. It was prepared by counsel, the same counsel that assisted in the drafting and execution of the First Amendment.
In paragraph 9.g. of the Trust, as amended in the First Amendment, Lois Mosher gave to the Defendant Herrell all mineral rights that she had in Section 24 referenced above. Apparently after these documents were executed, an error was discovered. A Corrective Mineral Quitclaim Deed was executed on April 13, 2009. This Deed gave Lois Mosher's mineral interests in Section 24 to Wesley Phillips as Trustee of the Wesley M. Phillips Living Trust. It also specifically references that this Deed is recorded to "correct and nullify ' the Mineral Quitclaim Deed to the Mosher Trust and specifies that the error was that it should have referenced Section 21 and not Section 24.
On April 13, 2009, Lois Mosher executed another Mineral Quitclaim Deed which deeded her individual mineral interests to the Trust as it related to the SW ¼ of Section 21, Township 13 North, Range 57 West of the 6th P.M. This Deed was recorded in the Kimball County Register of Deeds. As with the other documents, Mrs. Mosher was assisted by counsel in the drafting and execution of these documents.
The Trust document, specifically paragraph 9.g. was not modified or amended at that time. At the time of the death of Lois Mosher, there were no mineral interests owned by her or the Trust as to Section 24. The Defendant Herrell, in consultation with counsel in Nebraska and Wyoming, and in her capacity as Trustee interpreted the Mosher Trust and determined that the minerals in Section 21 were intended to be transferred to the Defendant Herrell. The Plaintiff rejects this interpretation. This is a challenge to its interpretation. This challenge engages the no-contest provision.
This challenge goes hand-in-glove with the Plaintiff's effort to receive 1/3 of the unassigned mineral interests that may belong to either his parents' or the Trust. Section 9.h. of the Trust clearly provides that she is the residual beneficiary of any real property that may have not been specifically described in the Trust documents or might be found at a later date. Even were the Plaintiffs challenge to the Defendant Herrell's interpretation of the Section 21 v. Section 24 dispute above valid, this provision clearly accounts for that. The Defendant Herrell would take such mineral interests as were not specifically identified in the Trust documents. The Plaintiffs persistence in seeking 1/3 of such interests is an effort to invalidate that provision of the Trust. This too engages the no-contest provision.
There are other challenges that the Plaintiff made to the interpretation of the Trust by the Defendant Herrell such as her interpretation as to how to dispose of certain personal property (i.e. donation, garage sale, etc.). The Plaintiff clearly challenges her interpretation of her powers as Trustee and in the manner by which the Trust was administered. The Court finds that these challenges also engage the no-contest provision.
Once engaged, the no-contest provision directs the result. The Plaintiff, in violation of the no-contest provision of the Trust, is stripped of his claims under the Trust. His interests under the trust are forfeit and such interests shall pass as if the Plaintiff predeceased Lois Mosher. In the absence of any interest under the Trust, the Plaintiff's claims fail as he is not empowered to make such claims.
Standing is jurisdictional. See State v. Lamb, 280 Neb. 738, 789 N.W.2d 918 (2010). The Plaintiff lacks standing to make his claims as his interests are forfeit. His claims and causes for action are dismissed.
Defendants' Counterclaim
Having found that the Plaintiff lacks standing to pursue his claims, the Court turns to the Defendants' counterclaims. The Court considers each in turn.
Theft of Equipment
The Defendants assert that certain specific items of personal property which ought to have been Trust assets were disposed of, kept or stolen by the Plaintiff. He denies that he has any of the items. The items are identified as follows:
John Deere 4755 Tractor
1988 Ford Grain Truck
John Deere 7700 Combine
Ford Loader Tractor
Hillsboro Gooseneck Grain Trailer
Flatbed Utility Trailer
Various Farm Equipment and Plows
Disk, Chisel, Grain Drills
Various Shop Tools and Old Tractors
Prior to his death, the father of the litigants, Dan Mosher, farmed. He owned various items of equipment and tools necessary to so farm. He and Lois lived and farmed at the home and farm in which the Plaintiff now resides. When Dan Mosher died, his interest in all such equipment and tools devised to Lois Mosher. In fact, these items were listed in Lois Mosher's County Court Inventory at the time of her death. The Plaintiff has resided at the farm for many years. He is the only one of the litigants who has access to the farm end its out-buildings in which Dan Masher's tools and some of his equipment was historically stored.
This claim is predicated on several facts which were demonstrated during the trial. A series of pictures were offered during the testimony of the Defendant Mosher and the Plaintiff. These pictures show some of the equipment listed above. The Defendant Mosher was also able to establish the purchase of at least one of these items by way of an invoice. At least two of the trailers listed above were licensed annually by the Plaintiff for nearly two decades. There are also a series of personal property tax returns and the estate inventories that demonstrate the existence of some or all of this equipment.
This claim is predicated on several facts which were demonstrated during the trial. A series of pictures were offered during the testimony of the Defendant Mosher and the Plaintiff. These pictures show some of the equipment listed above. The Defendant Mosher was also able to establish the purchase of at least one of these items by way of an invoice. At least two of the trailers listed above were licensed annually by the Plaintiff for nearly two decades. There are also a series of personal property tax returns and the estate inventories that demonstrate the existence of some or all of this equipment.
The Court finds the Plaintiffs testimony as to these items lacks credulity. He claims to have no knowledge of the location of the myriad of tools that his father once had or what may or may not have occurred with the listed equipment. Yet, he clearly listed some of this equipment on his own personal property return and signed such returns for his father which included such
items. He licensed two trailers for 18 years but claims this was simply an oversight or mistake. He alleges that he farms a nearly 2000 acre farm but cannot demonstrate the purchase of or the claim for tax purposes of any particular equipment.
In order to demonstrate a claim for conversion of personal property, the Defendants must show that the Plaintiff has wrongfully asserted dominion over another's property in denial or inconsistent with that person's rights. See United Gen. Title Ins. Co. v. Malone, 289 Neb. 1006, 1O19-20 (2015). Conversion is any unauthorized or wrongful act of dominion exerted over another's personal property which deprives the owner of his property permanently or for an indefinite period of time." Id.
The Court determines that the Defendants have demonstrated that the Plaintiff has converted the items listed above to his personal use and in contravention of any interests that the Mosher Trust or the Defendants as takers thereunder may have. Having demonstrated that the Plaintiff has converted said property and still has in his possession some or all of them the Court must determine the value of said items. The value of these items was set out in the Amended inventory for the Estate of Lois Mosher. The Defendant Mosher testified as to his opinion as to the value of this equipment. The Court finds that at the time of Lois Mosher's death the equipment and tools referenced above had an aggregate value of $103,000.00.
This is the amount that the Trust would have been entitled to at the time of Lois Mosher's death. The Court finds that a judgment should be entered in favor of The Mosher Trust and against the Plaintiff in the amount of $103,000.00.
Accounting/Farming Operations on Trust Real Estate
The Defendants assert that the Plaintiff owes her and the Trust their share of the net crop proceeds for 'the years 2012 through 2016. It is not in dispute that the Plaintiff continued to farm ground in Banner County that was either Trust property or the property of the Defendant Herrell. This real estate is the South ½ of Section 24, Township 27, Range 58 of the 6th P.M. in Banner County, Nebraska. There was no written lease as between the Plaintiff and Lois Mosher prior to her death, between the Plaintiff and the Mosher Trust either before or after Lois Masher's death or between the Plaintiff and the Defendant Herrell after she received this real estate from the Mosher Trust. The Plaintiff asserts that the Trust and the Defendant Herrell would receive 1/3 share less expenses for seed, liability insurance, crop insurance, hauling, combine, taxes pro and record keeping. The Plaintiff asserts that based on these expenses, he would not have any particular share to pay on the ground.
The Defendant Herrell asserts that the vast majority of the expenses claimed by the Plaintiff are not typically pan of a crop share lease arrangement in the area. An expert was called who testified that the typical crop share arrangement for wheat fallow leases are 1/3 and 2/3 split with the landlord paying a percentage (1/3) of the fertilizer costs. He reviewed the documents that-were made available to him in this litigation including the figures calculated by the Plaintiff. Based on his calculations, and using the figures provided by the Plaintiff, Mr. Burgener determined the landlord lease share amount for crop years 2012 and 2013. He determined that the Plaintiff had underpaid or owed the Trust $7,988.73 for those years. He further determined that for crop years 2014, 2015 and 2016, the Plaintiff owed the Defendant Herrell $4,768.53.
The Court determines that in the absence of a written agreement memorializing the parties' arrangement, the appropriate course of action is to use the "standard " crop share arrangement as established by Mr. Burgener. There is certainly no evidence that the Trust or that the Defendant Herrell ever agreed to have all of the expenses that the Plaintiff decided to bill paid before receiving their landlord share. The Court is satisfied that the Defendant Herrell has established her claim on this matter. The Court awards a judgment against the Plaintiff and to the Mosher Trust in the amount of $7,988.73. The Court further awards judgment against the Plaintiff and in favor of the Defendant Herrell, individually, in the amount of $4,768.53.
Theft or Fraudulent Concealment
The Court has considered the evidence presented on the issue of the location of the rings alleged to have belonged to Lois Mosher. The Court finds that there is insufficient evidence that the Plaintiff possesses the same. The Court dismisses this claim. .
Conclusion
For reasons more particularly set out above, the Court finds as follows:
1. The Plain tiff has engaged the "no-contest" provision of the Mosher Trust and has therefore forfeit any claims he may have against the Trust or Trustee. His claims and causes of action are dismissed. This includes, but is not limited to, his claim for attorneys' fees.
2. The Defendants have proved their counterclaim for theft/conversion of personal property. Judgment is entered against the Plaintiff and in favor of the Mosher Trust in the amount of $103,000.00.
3. The Defendant Herrell has proven in the counterclaim for accounting as to certain farming operations that monies are owed to the Mosher Trust and to her personally. Judgment is entered against the Plaintiff and to the Mosher Trust in the amount of
$7,988.73 and against the Plaintiff and in favor of the Defendant Herrell, individually, in the amount of $4,768.53.
4. The Defendants have failed to prove fraudulent concealment as it relates to their counterclaims regarding the jewelry. This counterclaim is dismissed.
5. The Court will consider the application of the Defendant Herrell for costs and attorneys fees.
6. Costs of this action are taxed to the Plaintiff
7 . Any relief not specifically granted herein is denied.
SO ORDERED
District Judge
