Opinion
2 CA-CV 2022-0094
01-31-2023
In re The Simpson Family Trust v. Warren Simpson, Respondent/Appellant. Alan Simpson, Petitioner/Appellee,
Law Office of Denice R. Shepherd P.C., Tucson By Denice R. Shepherd Counsel for Petitioner/Appellee Warren Simpson, Tucson In Propria Persona
Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court
Appeal from the Superior Court in Pima County No. PB20211970 The Honorable Kyle A. Bryson, Judge
COUNSEL
Law Office of Denice R. Shepherd P.C., Tucson By Denice R. Shepherd Counsel for Petitioner/Appellee
Warren Simpson, Tucson In Propria Persona
Judge Sklar authored the decision of the Court, in which Presiding Judge Eckerstrom and Chief Judge Vasquez concurred.
MEMORANDUM DECISION
SKLAR, Judge:
¶1 Warren Simpson appeals the trial court's order granting Alan Simpson's cross-motion for summary judgment, which resulted in Warren's removal as trustee of the Simpson Family Trust ("Trust"). We reject Warren's arguments that the trial court violated his constitutional rights to court-appointed counsel and a jury trial. We also agree with the court that Warren had breached his fiduciary duties by failing to provide required information to Alan, a trust beneficiary. We therefore affirm the court's judgment.
Factual Background
¶2 We view the facts and reasonable inferences in the light most favorable to Warren, the party opposing the cross-motion for summary judgment. See Braillard v. Maricopa Cnty., 224 Ariz. 481, n.11 (App. 2010).
¶3 In 1993, Barton and Irene Simpson executed the Trust, under which they were named the original trustees. After Barton died, Irene signed the fourth amendment and restatement of the Trust, which remains in effect.
¶4 Under the amended Trust, Barton and Irene's two sons, Warren and Roger, would serve as the Trust's co-trustees after Irene's death. Additionally, upon the death, resignation, or incapacity of one of her sons, the other son would continue as sole trustee. The Trust provided that each surviving son would receive a one-half interest in the Trust's assets upon Irene's death. The Trust also provided that if Roger predeceased Irene, his interest would be divided equally among his descendants.
¶5 Roger died in 2019 and was survived by three children, Alan and two siblings. Irene died in June 2020, at which point Warren became the sole trustee. In February 2021, Alan demanded that, within sixty days, Warren provide a Trust inventory and preliminary accounting. After Warren failed to provide the requested documents, Alan repeated his request in April 2021. A few days later, Warren provided Alan with an inventory of the Trust's purported assets, which included some estimated values.
¶6 In May 2021, Alan sent Warren a letter challenging and requesting clarification on certain items in the inventory. Two days later, Warren responded, claiming that Alan had "no rights for any demand or say upon the trust." He did not otherwise respond to Alan's letter.
¶7 The following month, Alan sent another letter to Warren asking whether he was living at a residential property owned by the Trust, whether he was paying rent for the property and, if so, how the property's rental value was being determined.
¶8 In Warren's response, he did not indicate whether he was living in Trust property or paying rent. Nor did he provide an accounting. Warren also disputed whether Alan was a beneficiary of the Trust.
Procedural Background
¶9 In November 2021, Alan commenced this action, seeking a declaratory judgment that he was a Trust beneficiary, an accounting of the Trust, and removal of Warren as trustee. Warren filed a motion for summary judgment. He argued that he was not at fault for failing to provide the requested information and that Alan's "case rests only on speculation and conjecture." The motion did not contain a statement of facts and was not supported by affidavits. Alan's response included a cross-motion for partial judgment on the pleadings, which the court treated as a cross-motion for summary judgment pursuant to Ariz. R. Civ. P. 12(d). He argued that there was no genuine dispute of material fact that he was entitled to a share of the Trust assets and that Warren should be removed as trustee for breaching his fiduciary duties. Warren's response to the crossmotion contained no statement of facts, nor was it supported by any controverting affidavits.
¶10 At oral argument in April 2022, the trial court determined that Alan and his siblings were entitled to a share of the Trust assets, and Alan withdrew his request for an accounting. In a subsequent ruling, the court granted Alan's cross-motion and removed Warren as Trustee. The court also appointed a special fiduciary to serve as Warren's replacement and denied Warren's motion for summary judgment. Warren now appeals the trial court's grant of summary judgment. We have jurisdiction pursuant to A.R.S. § 12-2101(A)(9).
Warren's notice of appeal challenged the trial court's April 22, 2022 ruling. Because that ruling did not include language under Rule 54(b) or 54(c), Ariz. R. Civ. P., making it a final appealable judgment, this court remanded for the trial court to consider including the necessary language, which it did by amendment entered August 31, 2022. See Brumett v. MGA Home Healthcare, L.L.C., 240 Ariz. 420, ¶ 13 (App. 2016) ("absent compliance with Rule 54(b) or 54(c), a judgment, decree or order entered in a formal Title 14 proceeding is not appealable under A.R.S. § 12-2101(A)(9)").
Warren's Constitutional Arguments are Waived and Lack Merit
¶11 Warren contends that his rights under the Fifth, Sixth, Seventh, and Fourteenth Amendments to the United States Constitution were violated. But, based on the record before us, Warren did not raise these arguments below. Nor did Warren provide a transcript of the April 2022 oral argument so we could determine whether he raised the constitutional issues there. As the appellant, Warren bore the responsibility of ordering the necessary transcripts. See Ariz. R. Civ. App. P. 11(c)(1); Baker v. Baker, 183 Ariz. 70, 73 (App. 1995). We presume the missing transcript supports the trial court's ruling. Myrick v. Maloney, 235 Ariz. 491, ¶ 11 (App. 2014). We therefore could deem the constitutional arguments waived. See Rhoads v. Harvey Publ'ns, Inc., 131 Ariz. 267, 269 (App. 1981) ("[S]ummary judgment may not be reversed on grounds first advanced on appeal."). Nevertheless, in our discretion, we will address Warren's constitutional arguments. See City of Tempe v. Fleming, 168 Ariz. 454, 456 (App. 1991) (general rule that arguments cannot be raised for first time on appeal may be suspended at court's discretion). We review constitutional issues de novo. Fragoso v. Fell, 210 Ariz. 427, ¶ 13 (App. 2005).
¶12 First, Warren argues that the trial court's failure to provide him with court-appointed counsel violated his rights under the Fifth, Sixth, and Fourteenth Amendments. However, the right to court-appointed counsel under the United States Constitution exists only when an indigent litigant may lose his or her physical liberty if the case is lost. State ex rel. Corbin v. Hovatter, 144 Ariz. 430, 431 (App. 1985) (citing Lassiter v. Dep't of Soc. Servs., 452 U.S. 18 (1981)). No such right exists in civil cases. Powell v. State, 19 Ariz.App. 377, 378 (1973). As this probate matter is civil rather than criminal, Warren had no right to a court-appointed attorney.
¶13 Additionally, Warren argues that the trial court's grant of summary judgment violated his right to a jury trial under the Seventh Amendment. The Seventh Amendment ensures the right to a jury trial for actions that are similar to common-law cases ordinarily decided in English law courts in the late eighteenth century. Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 41-42 (1989). The right does not extend to actions customarily heard by courts of equity or admiralty. Id. Actions for breach of a trustee's fiduciary duties in probate proceedings are equitable and not sufficiently analogous to any long-standing, common-law cause of action. See In re Estate of Newman, 219 Ariz. 260, ¶¶ 53-55 (App. 2008). Warren thus has no right to a jury trial. See id. ¶¶ 56-57 (applying equivalent analysis under Arizona Constitution).
¶14 Warren also appears to argue that the trial court deprived him of a jury trial by deciding this matter on summary judgment. But even if a jury-trial right existed in this action, summary-judgment proceedings would not violate it. See Orme Sch. v. Reeves, 166 Ariz. 301, 308 (1990) (summary judgment does not interfere with constitutional right to jury trial because "right to jury trial only attache[s] if the case present[s] a genuine factual question"). Accordingly, the court did not violate Warren's constitutional rights.
The Trial Court Properly Granted Summary Judgment to Alan
¶15 Warren also appears to challenge the trial court's grant of summary judgment on the basis it was not supported by proper evidence. He maintains "there were only unproven and unexamined words presented before the court." And "[a]ny type of judicial decision made and given with such fractured and unverified information points to something judicially unmentionable."
¶16 Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Ariz. R. Civ. P. 56(a). In reviewing a grant of summary judgment, we determine de novo whether any genuine issues of material fact exist and whether the trial court properly applied the law. Underwood v. Wilczynski, 252 Ariz. 405, ¶ 6 (App. 2021). We will affirm a grant of summary judgment if it is correct for any reason. S &S Paving &Constr., Inc. v. Berkley Reg'l Ins. Co., 239 Ariz. 512, ¶ 7 (App. 2016). If the party opposing a motion for summary judgment fails to file affidavits or other items listed in Rule 56, Ariz. R. Civ. P., in opposition to the motion, the facts stated in the moving party's affidavits are uncontroverted and are accepted as true. Swansea Props., Inc. v. Hedrick, 3 Ariz.App. 594, 596 (1966); Maxwell v. Fid. Fin. Servs., Inc., 184 Ariz. 82, 86 (1995). But as noted above, we must still draw all inferences in favor of the party against whom summary judgment was granted.
¶17 Whether a trustee may be removed is governed by A.R.S. § 14-10706. As relevant here, it provides that upon the request of a beneficiary or on the court's own initiative, a trustee may be removed if "[t]he trustee has committed a material breach of trust." § 14-10706(B)(1); see also A.R.S. § 14-11001(B)(7) (allowing court to remove trustee to remedy breach of trust). A "breach of trust" is a "violation by a trustee of a duty the trustee owes to a beneficiary." § 14-11001(A).
¶18 A trustee's duties to a beneficiary are set forth by the terms of a trust, as supplemented by the Arizona Trust Code. A.R.S. § 14-10105(A) (setting default and mandatory rules for trustees); A.R.S. §§ 14-10801 to 1410820 (outlining trustee's duties, including duties of good faith, loyalty, prudent administration, and record keeping). The duties are fiduciary in nature. See Ariz. Tile, L.L.C. v. Berger, 223 Ariz. 491, ¶ 38 (App. 2010).
¶19 Relevant here, the Trust's terms required the trustee to "keep and maintain adequate books and records reflecting all income and principal transactions." This requirement is mirrored in A.R.S. § 14-10810, which requires trustees to keep adequate records of trust administration. The Trust's terms also obligated the trustee to render an annual accounting to each "income beneficiary" of the Trust. This requirement supplements that of § 14-10813(A), which requires a trustee to keep the "qualified beneficiaries of the trust reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests." That same statute also requires a trustee to "promptly respond to a beneficiary's request for information related to the administration of the trust," absent unreasonableness. Id.
¶20 Although Warren has argued at times that Alan is not a beneficiary-such that Warren would not owe Alan these duties-the Trust provides otherwise. That document defines an "income beneficiary" as a "distributee or permissible distribute[e] under the Arizona Trust Code." See A.R.S. § 14-10103(5) (defining "[d]istributee" as "a person who receives property from a trust other than as a creditor or purchaser"). Alan meets this definition, as he is entitled to distributions in light of his father's death. Thus, Warren owed Alan fiduciary duties.
¶21 The trial court properly determined that there was no genuine dispute of material fact that Warren failed to comply with these duties. Specifically, Warren failed to respond to Alan's questions about whether he was residing in property owned by the Trust, whether he was paying rent for the property, and, if so, how the rental value was being determined. He also failed to substantively respond to Alan's requests for an accounting and other information concerning the Trust. And he never provided more than a partial inventory of the Trust's assets after Alan had threatened to take legal action. Taken together, these failures establish that Warren materially breached his obligations as trustee.
¶22 Notably, Warren's failure to provide the required information was undisputed, given that Warren failed to present meaningful admissible evidence in support of his motion for summary judgment or in opposition to Alan's cross-motion. Moreover, although some factual disputes may exist about whether Warren was actually living in trust property without paying rent, those disputes are immaterial in light of Warren's failures to provide the necessary information and accounting. The trial court therefore did not err in granting summary judgment.
Attorney Fees
¶23 Alan has requested attorney fees on appeal pursuant to A.R.S.
§ 12-349. Under that statute, a court "shall assess reasonable attorney fees" if a party brings or defends a claim "without substantial justification" or "solely or primarily for delay or harassment." § 12-349(A). The statute defines "without substantial justification" as a claim or defense that "is groundless and is not made in good faith." § 12-349(F). Although Warren's arguments lack merit, this court is not persuaded that they were made in bad faith or primarily for the purpose of delay or harassment. Alan also alluded to the possibility of pursuing a surcharge claim against Warren under A.R.S. § 14-1105. But he has not actually made such a claim, so we do not consider it. Therefore, Alan's request for fees on appeal is denied. Nevertheless, as the prevailing party, Alan is entitled to his costs on appeal upon compliance with Rule 21, Ariz. R. Civ. App. P. See A.R.S. § 12-341.
Disposition
¶24 For the foregoing reasons, we affirm the judgment of the trial court.