Opinion
NUMBER 2016 CA 1624
06-29-2017
DONNA W. NUNEZ v. SUSAN M. HATCH
Zara Zeringue Covington, LA Attorney for Appellant Defendant - Susan M. Hatch a/k/a Susan Wagner Kyle S. Sclafani New Orleans, LA Attorney for Appellee Plaintiff - Donna W. Nunez
NOT DESIGNATED FOR PUBLICATION
Appealed from the 22nd Judicial District Court In and for the Parish of St. Tammany, Louisiana
Trial Court Number 2016-12100 Honorable Martin E. Coady, Judge Zara Zeringue
Covington, LA Attorney for Appellant
Defendant - Susan M. Hatch a/k/a
Susan Wagner Kyle S. Sclafani
New Orleans, LA Attorney for Appellee
Plaintiff - Donna W. Nunez BEFORE: WELCH, CRAIN, AND HOLDRIDGE, JJ. WELCH, J.
Susan M. Hatch appeals a judgment by default declaring Donna W. Nunez to be the sole trustee of the Loyd O. Wagner, Jr. and Margaret M. Wagner Revocable Living Trust ("the trust") and authorizing her to act in that capacity in accordance with the terms of the trust. For reasons that follow, we vacate the judgment of the trial court and remand for further proceedings.
BACKGROUND
The following background information is derived solely from the allegations set forth in the plaintiff's Petition for Declaratory Judgment, Removal of Trustee and/or Termination of Trust. The plaintiff, Donna Nunez, is the niece of Loyd O. Wagner Jr., who was married to Margaret M. Wagner. The defendant, Susan Hatch, is the daughter of Margaret Wagner from her first marriage and was Loyd Wagner's step-daughter; however, after the death of Margaret Wagner, Loyd Wagner and Susan Hatch were married. On July 30, 2003, Loyd Wagner and Margaret Wagner created the trust. On that same date, Loyd Wagner and Margaret Wagner also executed several other documents, including donations inter vivos of their movable and immovable community property to the trust (including the property bearing the municipal address of 23146 Delery Street in Mandeville, Louisiana ("the Delery Street property"). In addition, on that same date, Margaret Wagner executed a will bequeathing the entirety of her property to the trust, which will also contained other special directives, i.e., that her surviving spouse (Loyd Wagner) receive all of her estate and that upon the demise of her surviving spouse, that Donna Nunez receive $10,000.00 from the trust. Donna Nunez and Susan Hatch were identified as the income and principal beneficiaries in the trust.
On July 30, 2003, both settlors (Loyd Wagner and Margaret Wagner) also executed an "Extract of Trust" in authentic form referencing the trust, which act was recorded in the conveyance records of St. Tammany Parish on March 29, 2005. In that act, the settlors were designated as trustees to serve until their deaths, resignations, or incompetence and Susan Hatch was designated as the First Successor Trustee. On March 25, 2005, Loyd Wagner, acting by himself, executed an "Amended Extract of Trust" in authentic form also referencing the trust, which act was also recorded in the conveyance records of St. Tammany Parish on March 29, 2005. In the Amended Extract of Trust, Donna Nunez was designated as the First Successor Trustee.
Subsequently, on October 25, 2005, Loyd Wagner drafted a handwritten document indicating his desire to amend the trust to "go back to the original Draft appointing Susan M. Hatch (a/k/a Susan Hatch Wagner[)] as the first successor trustee." On August 8, 2007, Loyd Wagner executed another act of donation inter vivos, in which he donated all of his property to the trust. Loyd Wagner died on February 28, 2013, and since Loyd Wagner's death, Susan Hatch has resided in and enjoyed the use of the Delery Street property.
Donna Nunez commenced these proceedings on May 20, 2016 seeking a declaration of her rights under the trust, i.e. a declaration that she was the trustee of the trust, or alternatively an order either removing the current trustee and appointing her as the trustee or terminating the trust. According to Donna Nunez, Susan Hatch had not taken any steps to protect the Delery Street property, had allowed the property insurance to lapse, and excluded Donna Nunez from the property. Donna Nunez claimed that she was the proper trustee of the trust according to the Amended Extract of Trust and had the authority to act for the trust under its terms. As such, Donna Nunez sought declaratory judgment confirming that she was trustee to the trust, that she had authority to act as such, and that she could perform any act authorized in the trust document. Alternatively, she sought an order removing Susan Hatch as trustee due to her failure to preserve the property owned by the trust, or to terminate the trust and place Donna Nunez and Susan Hatch into possession of the Delery Street property in equal co-ownership. Donna Nunez also sought an order placing her into possession of $10,000.00, as set forth in Margaret Wagner's will.
Susan Hatch did not file an answer or any other responsive pleading in response to Donna Nunez's petition. On Donna Nunez's motion, which alleged service of the petition on Susan Hatch on June 1, 2016, the trial court entered a preliminary default judgment on June 21, 2016. At the default confirmation hearing, the only evidence offered by Donna Nunez were certified copies of both the Extract of Trust and the Amended Extract of Trust; there was no oral testimony by any witness and no affidavits were offered in support of the demand. The trial court confirmed the default and rendered and signed a judgment on August 10, 2016 finding that Donna Nunez was entitled to the declaratory judgment as prayed for, declaring that Donna Nunez be recognized as the sole trustee under the trust, and declaring that she be authorized to act in that capacity in accordance with the terms of the trust. From this judgment, Susan Hatch has appealed.
The trial court did not sign the order attached to the motion for preliminary default, which granted the preliminary default; instead, the judgment by default (or "preliminary default") was entered in the minutes of the trial court. See La. C.C.P. art. 1701(A) and the "Editor's Notes" therein.
DISCUSSION
As noted above, Donna Nunez filed a petition for declaratory judgment with respect to her rights under the trust. Concerning declaratory judgments, La. C.C.P. art. 1871 provides, in pertinent part, that "[c]ourts of record within their respective jurisdictions may declare rights, status, and other legal relations" and "[t]he declaration shall have the force and effect of a final judgment or decree." More specifically, La. C.C.P. art. 1874 provides:
A person interested as or through an executor, administrator, trustee, guardian, or other fiduciary, creditor, devisee, legatee, heir, next of kin, or cestui que trust, in the administration of a trust, or of the estate of a decedent, an infant, lunatic, or insolvent, may have a declaration of rights or legal relations in respect thereto:
(1) To ascertain any class of creditors, devisees, legatees, heirs, next of kin or others;
(2) To direct the executors, administrators, or trustees to do or abstain from doing any particular act in their fiduciary capacity; or
(3) To determine any question arising in the administration of the estate or trust, including questions of construction of wills and other writings.
Furthermore, "[w]hen a proceeding under [La. C.C.P. arts.] 1871 through 1883 involves the determination of an issue of fact, such issue may be tried and determined in the same manner as issues of fact are tried and determined in other civil actions in the court in which the proceeding is pending." La. C.C.P. art. 1879. In this case, after Susan Hatch failed to file a responsive pleading to the petition for declaratory judgment, Donna Nunez proceeded to judgment by default pursuant to La. C.C.P. arts. 1701, et seq.
A judgment of default must be confirmed by proof of the demand that is sufficient to establish a prima facie case and that is admitted on the record prior to confirmation. La. C.C.P. art. 1702(A). Confirmation of a default judgment is similar to a trial with the defendant being absent. The plaintiff is required to present admissible and competent evidence establishing a prima facie case, proving both the existence and the validity of the claim as though the defendant denied each allegation of the petition. Arias v. Stolthaven New Orleans, L.L.C., 2008-1111 (La. 5/5/09), 9 So.3d 815, 820; NorthShore Regional Medical Center, L.L.C. v. Dill, 2012-0850 (La. App. 1st Cir. 3/22/13), 115 So.3d 475, 480, writ denied, 2013-0866 (La. 5/31/13), 118 So.3d 396. Simply stated, in order to confirm a default, "the plaintiff must present competent evidence that convinces the court that it is probable that he would prevail at trial on the merits." Arias, 9 So.3d at 820. In doing so, the plaintiff must adhere to the rules of evidence despite there being no opponent to urge objections. Id. In reviewing default judgments, the appellate court is restricted to determining the sufficiency of the evidence offered in support of the judgment. Arias, 9 So.3d at 818. This determination is a factual one governed by the manifest error standard of review. Id.
As previously set forth, Donna Nunez alleged in her petition that on July 30, 2003, Loyd Wagner and Margaret Wagner established the trust; that on that same date, they executed donations inter vivos for movable and immovable property to the trust, including the Delery Street Property; that Donna Nunez and Susan Hatch were the income and principal beneficiaries in the trust; that on March 25, 2005, the settlors executed an Extract of Trust, which provided that they were designated as the trustees to serve until their deaths, resignations, or incompetence and that Susan Hatch was designated as the First Successor Trustee, and that this Extract of Trust was recorded on March 29, 2005; and that on March 25, 2005, Loyd Wagner executed an Amended Extract of Trust naming Donna Nunez as the First Successor Trustee.
We note that although Donna Nunez alleged that the extract of trust was executed on March 25, 2005, the extract attached to the petition was execuited on July 39, 2003.
Based on these allegations, Donna Nunez sought a judgment declaring that she was entitled to be recognized as trustee of the trust, that she had authority to act as such, and that she could perform any act authorized in the trust document. To obtain this declaratory judgment, Donna Nunez had to establish a prima facie case of both the existence and the validity of her claim, as though Susan Hatch denied each of the above allegations of the petition. See Arias, 9 So.3d at 820. Essentially, Donna Nunez had to establish the existence of the trust and that she was entitled to be designated as trustee of the trust.
The proof of demand offered in support of Donna Nunez's claim was the Extract of Trust and the Amended Extract of Trust. These documents establish that Loyd Wagner and Margaret Wagner created the trust on July 30, 2003, that Loyd Wagner and Margaret Wagner, the settlors were designated as the trustees "to serve until both of their deaths, resignations or incompetence." According to the Extract of Trust, executed by both settlors, "[u]pon the end of the terms of the original Trustees, SUSAN M. HATCH is designated as First Successor Trustee." According to the Amended Extract of Trust, executed by Loyd Wagner only, "[u]pon the end of the terms of the original Trustees, DONNA W. NUNEZ is designated as First Successor Trustee."
We note that these documents are self-authenticating. See La. C.E. art. 905.
We find that this evidence was insufficient to establish that Donna Nunez was entitled to be designated as trustee of the trust. Under the provisions of the Amended Extract of Trust, Donna Nunez was entitled to be designated as trustee at the end of the terms of the original trustees (Loyd Wagner and Margaret Wagner); the end of the terms of the original trustees would occur upon "both of their deaths, resignations or incompetence." Absent from the record before us is any evidence establishing that Loyd Wagner and Margaret Wagner had died, had resigned as trustee of the trust, or had been declared incompetent. Although Donna Nunez may have alleged in her petition that both Loyd Wagner and Margaret Wagner had died, for purposes of confirming the default and proving her claim, Donna Nunez had to present a prima facie case establishing the fact that Loyd Wagner and Margaret Wagner died, or otherwise, that their terms as original trustees had ended, as though Susan Hatch had denied these allegations. See Arias, 9 So.3d at 820. Since Donna Nunez failed to do so, we must conclude that the trial court manifestly erred in confirming the default. Therefore, the judgment confirming the default must be vacated.
On appeal, Susan Hatch argued that in granting declaratory judgment in favor of Donna Nunez, the trial court erred in relying on the Amended Extract of Trust rather than on the actual trust document itself. However, because we have vacated the trial court judgment on the grounds that Donna Nunez failed to present sufficient evidence establishing a prima facie case entitling her to judgment, we need not address the merits of Susan Hatch's assignment of error. --------
CONCLUSION
For all of the above and foregoing reasons, the August 10, 2016 judgment of the trial court finding that Donna Nunez was entitled to the declaratory judgment as prayed for, declaring that Donna Nunez be recognized as the sole trustee under the trust, and declaring that she be authorized to act in that capacity in accordance with the terms of the trust is vacated and this matter is remanded for further proceedings.
All costs of this appeal are assessed to Donna W. Nunez.
JUDGMENT VACATED; REMANDED.