Opinion
No. ED89082
September 18, 2007
Appeal from the Circuit Court of St. Louis County Cause No. 06CC-1281 Honorable Mark S. Seigel.
Harold G. Johnson, Mitchell D. Johnson, St. Ann, Missouri, ATTORNEYS FOR APPELLANT.
John Challis, St. Louis, Missouri, ATTORNEYS FOR RESPONDENT.
GEORGE W. DRAPER III, writer, BOOKER T. SHAW, C.J., AND ROBERT G. DOWD, JR., J., concurring.
John F. Lynch, III, Stephen M. Lynch, and Timothy Lynch (hereinafter, "Plaintiffs") appeal the trial court's judgment granting George A. Lynch, Marie H. Roam, Patricia Gallagher, Bernice T. Huber, Victoria Neal Stone, Richard Harrison Neal, Marlene Slusser, and Joan N. Neal's (hereinafter, "Defendants") motion to dismiss. In their sole point on appeal, Plaintiffs contend the trial court erred in granting Defendants' motion to dismiss because their suit for a constructive trust establishes sufficient standing to maintain the suit. We affirm.
On August 28, 2002, Harry Schoepp executed his Last Will and Testament (hereinafter, "Will"), which bequeathed his entire estate to his wife, Olivia Schoepp, unless she predeceased him. If Mrs. Schoepp predeceased Mr. Schoepp, then the Will provided the entire estate was to be paid to "George Lynch, as Trustee under a certain Trust Agreement dated August 28, 2002, entitled Harry H. Schoepp and Olivia C. Schoepp Joint Revocable Living Trust Agreement." The Will also provided that no gift, bequest or devise was made to Mrs. Schoepp's children (George A. Lynch, Marie H. Roam, Patricia Gallagher, and Joan N. Neal), or to the children of her deceased son, John J. Lynch II.
The joint trust named Mr. Schoepp and George Lynch as the initial trustees, but George Lynch was to serve alone upon the death or incapacity of Mr. Schoepp.
On that same day, Mr. and Mrs. Schoepp executed a joint revocable living trust agreement (hereinafter "Joint Trust"). The Joint Trust provided Mr. and Mrs. Schoepp could transfer or convey assets to the Joint Trust to be administered under its terms. Under the Joint Trust, upon the death of Mr. and Mrs. Schoepp, its assets were to be used to pay the expenses of its administration, and after those expenses were paid, its corpus was to be distributed in equal shares to the then living children of Mrs. Schoepp and the then living sister of Mr. Schoepp (Bernice Huber). If any beneficiary was deceased at the time of distribution, the Joint Trust provided his or her share would lapse. Moreover, the Joint Trust specifically provided "no portion of the trust estate shall go to the descendants of John J. Lynch II."
On November 27, 2003, Mrs. Schoepp passed away. At the time of her death, her husband and four of her five children from a previous marriage (George A. Lynch, Marie H. Roam, Patricia Gallagher, and Joan N. Neal) survived her, while her fifth child, John. J. Lynch II had predeceased her. On May 6, 2005, Mr. Schoepp died. On May 26, 2005, his Will was filed with the Probate Division of the Circuit Court of St. Louis County. At the time of his death, Mr. Schoepp's sister, Ms. Huber, was his only natural heir. Mr. Schoepp's Will was duly probated and never challenged. Moreover, no contrary will or evidence thereof was ever filed.
Mr. Schoepp's assets, including those he received upon Mrs. Schoepp's death, were administered by George Lynch as the trustee of the Joint Trust and personal representative of his estate. Mr. Lynch, as trustee, distributed assets according to the terms of those documents, including pouring over all of Mr. Schoepp's estate's assets into the Joint Trust according to the terms of the Will. Mr. Lynch then distributed the assets to the beneficiaries of the Joint Trust.
In March 2006, Plaintiffs, the children of John J. Lynch II, filed the instant declaratory judgment action, seeking a judicial determination that the Joint Trust was invalid as a result of Mrs. Schoepp's incapacity and a product of Mr. Schoepp's undue influence. Plaintiffs sought to set aside the Joint Trust and have its assets placed into a constructive trust with a one-sixth share divided among them. Defendants moved to dismiss the petition, claiming Plaintiffs had not and could not plead they had standing to assert this claim. Defendants contended that even assuming Plaintiffs prevailed and the court invalidated the Joint Trust, its assets would revert back to Mr. Schoepp's estate, which would be administered pursuant to the terms of Mr. Schoepp's duly-probated Will. Thus, Defendants asserted, because Plaintiffs had not attempted to challenge Mr. Schoepp's Will or file evidence of any other prior will within the timeframes set forth in Section 473.083 RSMo (2000) Plaintiffs could not establish that, even if their claim succeeded, they had a legally cognizable interest in the outcome of the litigation. The trial court granted Defendants' motion to dismiss. This appeal follows.
Plaintiffs also alleged Mr. Schoepp breached a contract to make a will. However, the trial court granted Defendants motion to dismiss as to this count because Plaintiffs did not attach a copy of any alleged contract to their petition and Plaintiffs have abandoned this claim on appeal.
Plaintiffs contend that at some point prior to executing the Will at issue, Mr. and Mrs. Schoepp executed mutual wills providing that, at their death, their estate would be divided in equal shares to Mrs. Schoepp's four surviving children and one share divided equally between John J. Lynch's II descendants.
All statutory references are to RSMo 2000 unless otherwise indicated.
We review a trial court's grant of a motion to dismiss de novo. Moynihan v. Gunn, 204 S.W.3d 230, 232-33 (Mo.App.E.D. 2006). "When reviewing the dismissal of a petition for a failure to state a claim, appellate courts treat the facts contained in the petition as true and construe them liberally in favor of the plaintiffs." Id. We "determine whether the facts pleaded and reasonable inferences to be drawn from the allegations, as viewed in the light most favorable to the plaintiff, demonstrate any basis for relief." Duvall v. Lawrence, 86 S.W.3d 74, 80 (Mo.App.E.D. 2002).
Plaintiffs incorrectly state the trial court granted a Rule 55.27(b) Motion for Judgment on the Pleadings. The record reflects the trial court did not review any evidence beyond what was presented in the pleadings, and actually granted a Rule 55.27(a) Motion to Dismiss; we review accordingly.
"Our review of whether a litigant has standing is de novo." F.W. Disposal South, LLC v. St. Louis County, 168 S.W.3d 607, 611 (Mo.App.E.D. 2005). "We determine standing as a matter of law based on the petition and any other non-contested facts accepted as true by the parties at the time of the motion to dismiss." Id.
In their sole point on appeal, Plaintiffs contend the trial court erred in granting Defendants' motion to dismiss because certain portions of the trust were void and unenforceable such that a constructive trust should be imposed in their favor and against Defendants. Specifically, Plaintiffs assert Mrs. Schoepp lacked the testamentary capacity to execute the Joint Trust and was unduly influenced into executing it by Mr. Schoepp. They argue Mr. Schoepp took advantage of his confidential relationship with Mrs. Schoepp, excluded Plaintiffs as beneficiaries of the Joint Trust, and as a result, Defendants are unjustly enriched. In response, Defendants contend that, assuming Plaintiffs allegations are correct, Plaintiffs have failed to state a claim because they have not demonstrated how they stand to benefit if the trial court invalidates the Joint Trust. Specifically, Defendants note the remedy Plaintiffs seek is not the proper remedy for the invalidation of a trust for undue influence or lack of testamentary capacity. We agree.
A trial court properly grants a motion to dismiss if the plaintiff's petition, together with the non-contested facts accepted as true at the time of the motion to dismiss, demonstrates the plaintiff lack standing. See F.W. Disposal South, 168 S.W.2d at 611. It is well-settled law that a plaintiff must have a legally cognizable interest in the outcome of an action before he or she may assert a claim in litigation. Id. If a plaintiff lacks standing to assert a claim, the trial court must dismiss the case because it does not have jurisdiction over the merits of the plaintiff's claim. Farmer v. Kinder, 89 S.W.3d 447, 451 (Mo. banc 2002). "Whether a party has standing is determined by the particular facts of each case." F.W. Disposal South, 168 S.W.3d at 611. "In the context of a declaratory judgment action, the plaintiff must have a legally [protectible] interest at stake in the outcome of the litigation." Id. (internal citations omitted). A plaintiff meets this test if "there is a statutory basis for standing or if the plaintiff has been directly and adversely affected by the action in question." Id. (internal citations omitted).
As Defendants correctly assert, assuming arguendo that the Joint Trust fails, the disposition of the Joint Trust's assets determines whether Plaintiffs have standing. Plaintiffs contend that upon the Joint Trust's invalidation, the trial court should have imposed a constructive trust in Plaintiffs' favor so that Defendants would not be unjustly enriched.
Where an express testamentary trust fails without provision for disposition of its assets in the event of failure, a resulting trust arises for the settlor or his or her estate. Estate of McReynolds, 800 S.W.2d 798, 801 (Mo.App.E.D. 1990) ( citing Restatement (Second) of Trusts Section 411 cmt. c (1959)). A "resulting trust" arises because the law infers that the settlor did not intend for the trustee to keep the property and, in light of the settlor having made no other disposition for the property, the law infers that the trustee is merely holding the property for the settlor or his or her estate. McReynolds, 800 S.W.2d at 801.
Although Plaintiffs contend their request for a constructive trust alters this analysis, Plaintiffs do not point to, nor are we aware of, any authority stating a constructive trust is the proper remedy upon the failure of an express trust. Assuming the trust fails as a result of undue influence or lack of capacity, a constructive trust is not the proper remedy. Id. Rather, a resulting trust in favor of the settlors is the appropriate remedy upon failure of an express trust. Here, the Joint Trust included no provision in the event it failed, and in the absence of express direction by the Joint Trust, a resulting trust arises in favor of Mr. Schoepp's estate. Thus, the only persons that would have standing to challenge the Joint Trust are the beneficiaries of Mr. Schoepp's estate — the legatees under Mr. Schoepp's last valid and duly-probated Will. If and only if Mr. Schoepp's Will had been invalidated would Mr. Schoepp's heirs-at-law or legatees under prior wills have standing to challenge the Joint Trust. Accordingly, the trial court did not err in granting Defendant's motion to dismiss because Plaintiff's lacked standing to challenge the Joint Trust for undue influence or lack of testamentary capacity. Point denied.
Here, if the Joint Trust failed, its assets would be returned to the settlors of the Joint Trust — Mr. and Mrs. Schoepp in tenancy by the entirety. Because Mrs. Schoepp predeceased Mr. Schoepp, the Joint Trust's assets would have passed to him upon her death as a matter of law. Hanebrink v. Tower Grove Bank Trust Co., 321 S.W.2d 524, 527 (Mo.App.E.D. 1959) (holding that "where a husband and wife hold personal property as joint owners they are presumed to be tenants by the entirety. Each is presumed to have an undivided interest in the whole of the property").
Under the probate code, a party desiring to challenge another's trust, who is not a legatee under the will of the grantor must concurrently file an action to challenge the will or seek admission of his or her own proposed will to demonstrate that they stand to gain from the invalidation of the trust. See Section 473.083. If a person claims an interest under a different will, he or she must file the proposed will — or evidence thereof — no later than one year following the death of the decedent. Section 473.050. Accordingly, Plaintiffs cannot rely upon the fact that they were named legatees under a prior will to establish that they have a legal interest in the assets of the Joint Trust.
Based upon the foregoing, the trial court's judgment is affirmed. Booker T. Shaw, C.J., and Robert G. Dowd, Jr., J., concur
OPINION SUMMARY
John F. Lynch, III, Stephen M. Lynch, and Timothy Lynch (hereinafter, "Plaintiffs") appeal the trial court's judgment granting George A. Lynch, Marie H. Roam, Patricia Gallagher, Bernice T. Huber, Victoria Neal Stone, Richard Harrison Neal, Marlene Slusser, and Joan N. Neal's (hereinafter, "Defendants") motion to dismiss. In their sole point on appeal, Plaintiffs contend the trial court erred in granting Defendants' motion to dismiss because their suit for a constructive trust establishes sufficient standing to maintain the suit.
AFFIRMED.
Division Two Holds: The trial court did not err in dismissing Plaintiffs' petition in that Plaintiffs lacked standing to sue.