Opinion
2 CA-CV 2022-0168
07-18-2023
In re the Estate of Richard "Dickie" Merle Kaler, Deceased v. Lance Zane Sexton, Respondent/Appellee. Leah Rachel Schrom, Petitioner/Appellant,
J. Grant Walker PLLC, Safford By Kelly G. Black and J. Grant Walker Counsel for Petitioner/Appellant Larson &Simpson PLC, Pinetop By Gregory J. Larson and John A. Salskov Counsel for Respondent/Appellee
Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court
Appeal from the Superior Court in Greenlee County No. PB202100028 The Honorable Kyle A. Bryson, Judge
J. Grant Walker PLLC, Safford By Kelly G. Black and J. Grant Walker Counsel for Petitioner/Appellant
Larson &Simpson PLC, Pinetop By Gregory J. Larson and John A. Salskov Counsel for Respondent/Appellee
Judge O'Neil authored the decision of the Court, in which Vice Chief Judge Staring and Judge Sklar concurred.
MEMORANDUM DECISION
O'NEIL, Judge:
¶1 This probate proceeding primarily involves two documents that the decedent, Richard Kaler, executed before his death. His daughter, Leah Schrom, appeals a portion of the trial court's ruling interpreting the relevant documents. The only other interested party who appeared is Lance Sexton, the decedent's longtime ranch manager. Because debatable issues exist, we treat his failure to file an answering brief as a confession of reversible error, and we therefore reverse and remand.
BACKGROUND
¶2 Among the various documents involved in the trial court proceedings, two are relevant here: a trust executed in January 2012 and a document signed in January 2021 referring to itself as a "declaration." That declaration designated Sexton as sole heir and purported to "make[] all previous documentation[,] wills[,] etc. null and void." After her father's death in September 2021, Schrom filed a petition for a formal probate. She sought appointment as personal representative and an order that her father had died intestate. She asserted that the declaration had revoked the trust but was not a valid will.
¶3 At a status conference in January 2022, Sexton appeared but did not oppose the petition. He never filed a written response. The trial court set a hearing on the petition and directed the parties to file "a brief position statement" if the parties were unable to reach "a global agreement." Sexton filed a position statement two days before the hearing but again identified no opposition to the petition. At the hearing, Sexton advised the court, "[O]ur position is going to change now. We do object to the petition."
¶4 The parties agreed that the declaration was not a valid will. They also agreed that it either amended or revoked the trust. But while Schrom argued that the declaration had revoked the trust completely, Sexton argued that it had either amended the trust or created a new trust in its place. Despite Sexton's failure to file any written objection to the petition, the trial court heard evidence and took the matter under advisement. The court later concluded that the declaration neither revoked nor amended the trust. The court entered a final judgment declaring that the decedent had died intestate except for the property subject to the trust and fifty cattle devised by a separate will.
The trial court considered other documents not relevant here. Other than the will devising fifty cattle, the court determined that none of the remaining documents were valid wills. The court's findings concerning these documents are not challenged on appeal.
¶5 This appeal followed. We have jurisdiction under A.R.S. §§ 12-120.21(A)(1) and 12-2101(A)(9).
DISCUSSION
¶6 Schrom argues that the trial court should have treated the petition as uncontested because Sexton had failed to file a written response as required by Rule 15(e), Ariz. R. Prob. P. She also disputes the court's conclusion that the declaration was ineffective to revoke the trust. Instead of an answering brief, Sexton filed a response taking "no position regarding this appeal." "When debatable issues exist and an appellee fails to file an answering brief, we may consider such failure a confession of reversible error." Savord v. Morton, 235 Ariz. 256, ¶ 9 (App. 2014). Schrom has raised debatable issues.
¶7 A probate proceeding becomes contested only when an interested person files a responsive pleading, either seven days before the initial hearing or within fourteen days after the person orally responds to the petition at the initial hearing. Ariz. R. Prob. P. 15(e). Neither Sexton nor any other interested party filed a written response to the petition. Whether the trial court erred by trying the case as a contested proceeding is debatable.
¶8 In determining that the declaration did not revoke or amend the trust, the trial court relied on In re Estate &Trust of Pilafas, which explained that "if a settlor only reserves a power to revoke [a] trust in a particular manner or under particular circumstances, he can revoke the trust only in that manner or under those circumstances." 172 Ariz. 207, 211 (App. 1992). The trust provided as follows:
This Trust is revocable and may be altered or amended in any respect unless specifically prohibited elsewhere in this Trust Agreement.
Any such revocation or amendment shall be in writing signed by Trustor and delivered to Trustee(s) provided the duties and responsibilities of the Trustee shall not be substantially changed by any such amendment without his or her consent.
The court reasoned that the declaration "d[id] not refer to the Trust at all, and consequently the Trustor did not comply with the terms of the Trust as necessary to make any amendments." But Pilafas was decided before the enactment of the Arizona Trust Code. See 2008 Ariz. Sess. Laws ch. 247, § 16. Section 14-10602(C)(1), A.R.S., contained within the code, permits revocation of any revocable trust upon "substantial compliance with a method provided in the terms of the trust." The decedent signed the declaration as both trustor and trustee, and it included language making "all previous documentation[,] wills[,] etc. null and void." The trust does not require an express reference to the trust as a condition for revocation. It is therefore debatable whether the declaration substantially complied with the method of amendment established in the trust.
¶9 Section 14-10602(C)(2) outlines additional means by which to revoke a trust that does not expressly provide that a stated method of amendment is exclusive. Such a trust may be revoked by "[a] later will or codicil that expressly refers to the trust or specifically devises property that would otherwise have passed according to the terms of the trust." § 14- 10602(C)(2)(a). Although the declaration does not expressly refer to the trust, it purports to devise "Kaler Ranch LLC and all assets associated with it" to Sexton's ownership and control, contrary to the terms of the trust.
¶10 Additionally, so long as the method of amendment is not exclusive, a trust may be revoked by "[a]ny other writing signed by the settlor manifesting clear and convincing evidence of the settlor's intent." § 14-10602(C)(2)(b). The declaration's language pronouncing "documentation[,] wills[,] etc. null and void," together with its provisions devising property in a manner contrary to the terms of the trust, create a debatable issue as to whether the declaration manifests the decedent's intent to revoke the trust.
¶11 We exercise our discretion to treat Sexton's decision not to file an answering brief as a confession of reversible error, and we reverse on that basis alone. See In re Pinal Cnty. Juv. Action No. S-389 , 151 Ariz. 564, 565 (App. 1986). We need not and do not reach the substance of the issues. Notably, Schrom and Sexton agreed at trial that the declaration was sufficient to amend or revoke the trust. As a result, that basic position has gone unopposed both at trial and on appeal, and we lack the benefit of full adversarial briefing. See Beck v. Beck, 9 Ariz.App. 77, 78 (1969) (reversing for confession of error upon finding debatable issues, but noting "it may be that upon a contested appeal in which the court has the benefit of learning the views of all parties concerned, that a modified, or perhaps entirely different, result would be reached"). We therefore do not determine that the trial court erred. We conclude only that the issues are debatable.
DISPOSITION
¶12 We reverse the trial court's judgment, direct entry of an order that the declaration revoked the trust, and remand for further proceedings consistent with this decision.