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Estate of Davis
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MAINE SUPREME JUDICIAL COURTReporter of Decisions
Decision: 2001 ME 106
Docket: Ken-00-622
Argued: May 17, 2001
Decided: July 18, 2001
Panel: WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, SAUFLEY, ALEXANDER, and
CALKINS, JJ.
ESTATE OF CHARLES LOYDE DAVIS
CALKINS, J.
[¶1] Elaine Barstow and Lee Fotter appeal from the summary
judgment entered in the Kennebec County Probate Court (Mitchell, J.) on
the petition filed by Charles B. Davis Company, Inc. to determine the
recipient of the residuary estate of Charles Loyde Davis. Davis' will leaves
the residuary estate to the trustee of a 1972 trust that Davis established, and
the trust provides for the distribution of the trust assets. At issue is whether
the 1972 trust was amended by a document signed by Davis in 1992. The
court declared that the 1992 document is an amendment to the 1972 trust
agreement. Barstow and Fotter argue that the court erred in examining
extrinsic evidence, applying a preponderance of the evidence standard of
proof, and holding that Davis intended to amend his 1972 trust by creating
the 1992 trust agreement. We affirm the judgment.
I. FACTS AND PROCEDURE
[¶2] In June 1972, Davis created a trust naming Depositors Trust
Company as the trustee. The trust agreement expressly provides that it can
be amended.{1} Davis made minor amendments to the trust in
November 1972. Davis further amended the trust in 1983, and, on the same
day, he executed a new will. This amendment provides that upon the death
of Davis' wife, the trust terminates, and the remaining trust assets are to be
distributed by the trustee in accordance with the trust agreement. The will
leaves his residuary estate to Depositors Trust, in trust, "to be added to the
principal of the trust" created by the 1972 trust agreement.
[¶3] In 1992, Davis created a second trust agreement naming Key
Trust Company, previously known as Depositors Trust Company, as the
trustee. The 1992 trust agreement tracks the language of the 1972 trust
document, including the 1972 and 1983 amendments,{2} but the 1992 trust
agreement provides for a different distribution of assets.{3} The 1992 trust
agreement contains the signature of Davis which is attested to by an officer
of Key Trust.
[¶4] Davis died in 1999. His wife died in 1996. Davis had no
children. The Davis Company filed a petition in the Probate Court to
determine the recipient of the residuary of Davis' estate. Under both the
1972 trust agreement and the 1992 trust agreement, all shares of the Davis
Company were bequeathed to the trust. In its petition, the Davis Company
sought a determination as to whether the residuary estate under the will
should pour over into the 1972 trust or into the 1992 trust.
[¶5] James Vigue, who is named as a beneficiary in the 1992 trust
agreement, but who is not named as a beneficiary in the 1972 trust
agreement, responded to the petition and moved for summary judgment.
Barstow and Fotter, who are named as beneficiaries in the 1972 trust
agreement, responded to the petition and objected to the summary
judgment motion. Pursuant to the 1972 trust agreement, Barstow would
receive one-half of the trust assets, after certain distributions are made, but
in the 1992 trust agreement, she is one of eight beneficiaries who would
share the remaining trust assets. Fotter would receive a portion of the trust
assets under the 1972 trust agreement, but he is not named as a beneficiary
in the 1992 trust agreement.
[¶6] The court granted Vigue's motion for summary judgment, finding
that Davis intended the 1992 trust agreement to be an amendment of the
1972 trust agreement. In this appeal Barstow and Fotter claim that the
Probate Court erred in three respects: (1) by utilizing extrinsic evidence to
determine whether the 1992 instrument amended the 1972 trust
agreement; (2) by applying a preponderance of the evidence burden of
proof; and (3) by concluding that the 1992 document amended the 1972
trust agreement.
II. DISCUSSION
[¶7] We review the entry of a summary judgment de novo for errors of
law. Summary judgment is appropriate if the evidence demonstrates that
there are no genuine issues of material fact and if the party on whose behalf
the judgment is granted is entitled to judgment as a matter of law.
M.R. Civ. P. 56(c).
1. Extrinsic Evidence
[¶8] Barstow and Fotter first contend that the court should not have
examined extrinsic evidence. In arriving at its conclusion that the 1992
trust agreement is an amendment of the 1972 trust agreement, the court
examined 1991 and 1992 correspondence between Cyril Joly, who was
Davis' attorney at that time, and Key Trust. These letters were submitted by
the Davis Company and objected to by Barstow and Fotter. The letters are
transmittal letters to enclosures. In the first letter Joly notified Key Trust
that Davis was "probably" going to make a new will and trust agreement.
Joly then sent the new trust agreement to Key Trust asking for suggestions.
Key Trust returned three copies of the trust agreement to Joly asking that
the original be returned to Key Trust. On the same day that Davis signed the
1992 trust agreement, Joly sent it to Key Trust. The letters were submitted
to the court with two affidavits: one from an attorney who practiced with
Joly before Joly's retirement; and the other from an officer at Key Trust.
Both affiants aver that the letters are in their custody.
[¶9] In interpreting a trust document, a court only considers
extrinsic evidence to determine the settlor's intent if the document is
ambiguous. See Estate of Utterback, 521 A.2d 1184, 1187 (Me. 1987)
(stating that resort to extrinsic evidence of objective circumstances is
appropriate if will is ambiguous). Although there is no ambiguity on the face
of either the 1972 trust agreement or the 1992 trust agreement, an
ambiguity is created in three respects: (1) the existence of two trust
documents which are identical except for the distribution of assets; (2) trust
documents which by their terms are amendable; and (3) a will that refers to
"the trust created by that certain Trust Agreement." The ambiguity created
by the documents allows the court to examine extrinsic evidence to
determine whether Davis intended the 1992 trust agreement to be an
amendment to the 1972 trust agreement.
[¶10] Barstow and Fotter also object to the court's acceptance of the
transmittal letters because they contend that the letters would not be
admissible in evidence pursuant to M.R. Evid. 803(6);{4} and, therefore, they
could not be considered in the context of the summary judgment motion.
See M.R. Civ. P. 56(e). Barstow and Fotter argue that the letters were not
"kept in the course of a regular conducted business" and it was not "the
regular practice" of Joly or Key Trust "to make" the letters. Id. We reject
this argument. Letters memorializing the transmission or receipt of
documents or information may be admissible to prove notice or knowledge if
the letters are made and kept in the regular course of business. See
Haygood v. Auto-Owners Ins. Co., 995 F.2d 1512, 1517 (11th Cir. 1993)
(stating that letter to plaintiff from bank's lawyer that foreclosure was
imminent admissible under F.R. Evid. 803(6) to show that plaintiff knew
about foreclosure). Both affidavits accompanying the Joly and Key Trust
letters state that the letters were regularly kept in the course of the
business and that the law firm and bank were regularly conducted
businesses. It is common for attorneys and businesses to utilize transmittal
letters when sending documents to others and to make and keep such
letters as part of their regular business. The court acted within its
discretion to accept the letters for the sole purpose of demonstrating that
Key Trust had notice of the 1992 trust instrument.
2. Burden of Proof
[¶11] Barstow and Fotter also object to the standard of proof utilized
by the court which was a preponderance of the evidence.{5} They argue that
Vigue must prove by clear and convincing evidence that the 1992 trust
agreement is an amendment to the 1972 trust. They contend that clear and
convincing is the burden of proof to be applied in this case because it is the
burden utilized for proving a constructive trust. Barstow and Fotter have not
cited any authority, and we discern no policy reasons for requiring a clear
and convincing standard in a case, such as this, which does not involve
allegations of fraud or raise factual issues that previously have been held to
require a heightened burden of proof. See Taylor v. Comm'r of Mental
Health and Mental Retardation, 481 A.2d 139, 149-50 (Me. 1984); see also
Petit v. Key Bank of Maine, 688 A.2d 427, 431 (Me. 1996) (discussing the
types of cases requiring the clear and convincing burden of proof and the
history of such). Therefore, we conclude that the appropriate burden of
proof is preponderance of the evidence.
3. The 1992 Trust Agreement
[¶12] Barstow and Fotter raise several arguments that the court erred
in finding that the 1992 trust agreement amended the 1972 trust
agreement. First, they point to the lack of express language in the 1992
document stating it is an amendment of the 1972 agreement. This lack,
they contend, means that the 1992 document cannot be construed as an
amendment. They have not cited, and we have not found, any authority for
the proposition that a trust amendment must explicitly recite that it is an
amendment. The sole fact that the 1992 document does not expressly
declare itself to be an amendment is not dispositive.
[¶13] Second, they contend that the amendment procedures of the
1972 trust were not followed. The only provision in the 1972 trust
document regarding amendments states that Davis reserves the power to
amend "on written notice to the Trustee." The signature of the trust officer
of Key Trust, the successor trustee of the 1972 trust, on the 1992 trust, as
well as the transmittal letters reviewed by the court, demonstrate that the
trustee had written notice of the amendment. Nothing further is required
by the 1972 trust for amendment of it. See Woodward v. Ameritrust Co.,
751 F.2d 157, 160 (6th Cir. 1984) (affirming summary judgment declaring
trust amendment valid even though trustee did not consent to amendment;
trust document allowed for modification by filing written amendment with
trustee and did not require trustee's consent).
[¶14] Third, Barstow and Fotter claim that the 1992 document did
not follow the same pattern of amending the trust created in 1972 that
Davis previously followed. Specifically, they point to the 1972 and 1983
amendments which expressly stated that they were amendments to the
1972 agreement. While the manner of making the two previous
amendments is worthy of consideration, it is not controlling.
[¶15] Fourth, Barstow and Fotter argue that because Davis did not
amend his will after signing the 1992 trust agreement he did not intend the
residuary estate to be distributed according to the 1992 trust. This fact
proves nothing because there would be no reason for Davis to execute a
codicil to his will if he intended the 1992 trust agreement to be an
amendment of the 1972 trust agreement.
[¶16] Finally, Barstow and Fotter contend that the trust created in
1972 and the trust created in 1992 can stand independently and are not
inconsistent. However, the identical language in the documents creating
the trusts, with the exception of the distribution provisions, indicates that
Davis did not intend to establish two separate trusts. See Rosenblum v.
Gibbons, 685 S.W.2d 924, 930 (Mo. Ct. App. 1984) (holding that 1981 trust
was amendment of 1978 trust where instruments were identical except for
dispositive provisions and where corpus of both trusts consisted of death
benefits from retirement plan).
[¶17] We conclude that the summary judgment declaring that the
1992 trust agreement amends the 1972 trust agreement is not erroneous as
a matter of law.
The entry is:
Judgment affirmed.
Attorney for appellants:
Robert E. Sandy Jr., (orally)
Sherman & Sandy
P O Box 499
Waterville, ME 04903
Attorneys for appellees:
Michael A. Cunniff, Esq., (orally)
Preti, Flaherty, Beliveau, pachios & Haley, LLC
P O Box 9546
Portland, ME 04112
(for James Vigue)
Alton C. Stevens, Esq., (orally)
Marden, Dubord, Bernier & Stevens
P O Box 708
Waterville, ME 04903
(for Charles B. Davis Co., Inc.)
J. William Batten, Esq.
Jabar, Batten, Ringer & Murphy
One Center Street
Waterville, ME 04901
(for Peter Bolduc)
Daniel J. Dubord, Esq.
Joly & Dubord
222 Main Street
Waterville, ME 04901
(for Key Trust Company, N.A.)
FOOTNOTES******************************** {1} . Paragraph 7.1 of the 1972
trust document states in pertinent part: "The grantor hereby expressly
retains the power at any time to alter, revoke or terminate any of the provisions
herein contained on written notice of the Trustee . . . ." {2} . For
simplicity, when the term "1972 trust" is used herein, it refers
to the 1972 trust as amended by the 1972 and 1983 amendments. {3} . Although
Davis executed a codicil to his will in 1998, it makes no reference to the
1992 trust. {4} . M.R. Evid. 803 lists numerous exceptions to the hearsay
rule. One of those is Rule 803(6) which reads: (6) Records of Regularly
Conducted Business. A memorandum, report, record, or data compilation, in
any form, of acts, events, conditions, opinions, or diagnoses, made at or
near the time by, or from information transmitted by, a person with knowledge,
if kept in the course of a regular conducted business, and if it was the
regular practice of that business to make the memorandum, report, record,
or data compilation, all as shown by the testimony of the custodian or other
qualified witness, unless the source of information or the method or circumstances
of preparation indicate lack of trustworthiness. The term "business"
as used in this paragraph includes business, institution, association, profession,
occupation, and calling of every kind, whether or not conducted for profit.
{5} . The Davis Company argues that the burden of proof is not relevant
when a case is decided on a summary judgment motion because there are no
factual disputes. In a defamation case we held that the burden of proof
was relevant in determining whether summary judgment is appropriate. Tucci
v. Guy Gannett Publ'g Co., 464 A.2d 161, 166-67 (Me. 1983). Three years
later, in a defamation case, the Supreme Court in Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 254 (1986) held that "in ruling on a motion for
summary judgment, the judge must view the evidence presented through the
prism of the substantive evidentiary burden." We have not expressly
adopted or rejected this requirement in nondefamation cases. See Bartlett
v. Mirabal, 999 P.2d 1062, 1070 (N.M. Ct. App. 2000) (rejecting, in will
contest case, the Anderson requirement of reviewing summary judgment facts
through burden of proof prism). Without opining on whether we would adopt
the Anderson holding in a nondefamation case, it is sufficient for us to
determine in this case that the appropriate burden of proof is preponderance
of the evidence.
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