Case Title: GLORIA I. MENDOZA and JOSEPHINE E. CANO V. LAWRENCE O. GONZALES, AS TRUSTEE OF THE GONZALES FAMILY TRUST, and LAWRENCE O. GONZALES, individually

Citation: 

Docket Number: S-08-0059

State: wyoming

Court: Wyoming Supreme Court

Date: 2009-04-09T00:00:00Z

Document:
GLORIA I. MENDOZA and JOSEPHINE E. CANO V. LAWRENCE O. GONZALES, AS TRUSTEE OF THE GONZALES FAMILY TRUST, and LAWRENCE O. GONZALES, individually2009 WY 50204 P.3d 995Case Number: S-08-0059Decided: 04/09/2009
APRIL TERM, A.D. 2009

 
 
GLORIA 
I. MENDOZA and JOSEPHINE E. CANO,

 
 
Appellants

(Plaintiffs),

 
 
v.

 
 
LAWRENCE 
O. GONZALES, AS TRUSTEE OF THE GONZALES FAMILY TRUST, and LAWRENCE O. GONZALES, 
individually,

 
 
Appellees

(Defendants).

 
 
Appeal 
from the District Court of Carbon County

The 
Honorable Wade E. Waldrip, Judge

 
 

Representing 
Appellants:

William 
L. Hiser and Kelly N. Heck of Brown & Hiser LLC, Laramie, Wyoming.  Argument by Ms. 
Heck.

 
 

Representing 
Appellees:

Thomas 
A. Thompson and Brandon W. Snyder of MacPherson, Kelly & Thompson, LLC, 
Rawlins, Wyoming.  Argument by Mr. 
Thompson.

 
 
Before 
VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, 
JJ.

 
 
VOIGT, 
Chief Justice.

 
 
[¶1]      This matter 
involves a family dispute over the disposition of certain trust property.  The appellants, Gloria I. Mendoza and 
Josephine E. Cano, claim that the appellee, their brother Lawrence O. Gonzales, 
wrongfully induced them to disclaim their interest in a large portion of the 
trust property.  The district court 
concluded that the appellants consented to the appellee's actions and thus 
waived their right to challenge the alleged misconduct.  We will affirm.  

 
 
ISSUES

 
 
[¶2]      We restate the 
issues as follows:

 
 
1.   Was the district court's finding 
that the appellants consented to the appellee's actions as trustee clearly 
erroneous?

 
 
2.   Were the district court's findings 
that the appellants' consent was not void because they knew of their rights and 
the material facts relating to their consent, and because their consent was not 
induced by improper conduct by the appellee clearly 
erroneous?

 
 
FACTS

 
 
[¶3]      The 
appellants are sisters and the only siblings of the appellee.  In 1991, the parties' parents created 
The Gonzales Family Trust ("Trust").  Under the Trust, upon the death of the 
parents the appellee was to become the successor trustee.  The terms of the Trust called for the 
trust property to be distributed equally among all three siblings.  The Trust was vested with three basic 
categories of property:  1) personal 
property, consisting of five vehicles and household contents, 2) monetary assets 
such as cash and certificates of deposit, and 3) real property located in Carbon 
County, Wyoming.

 
 
[¶4]      The parties' 
mother died in 1994, and their father passed away on February 14, 2006.  Following their father's death, the 
appellee, as trustee, created an inventory and accounting of the trust accounts 
and sent certified checks to both of the appellants in the amount of their 
respective shares of the trust cash.  
With respect to the real property, on April 21, 2006, Appellant Mendoza 
signed and had notarized a document which read, in pertinent 
part:

 
 
I, 
Gloria I. Mendoza, do hereby certify and warrant that I am the true and lawful 
1/3 owner of the property, together with my only brother, Lawrence O. Gonzales 
and only sister, Josephine E. Cano.  
The properties in question are described herein as Lots numbered Five 
(5), Six (6) and Seven (7), in Block Number Three (3), Southside Addition to the 
City of Rawlins, Carbon County, Wyoming.  
And All of Lots Eight (8) and Nine (9), Block Three (3), First Southside 
Addition to the City of Rawlins, Carbon County, Wyoming. 

 
 
I 
convey all my interest in these lots and pass ownership on the aforementioned 
property lots to my brother, Lawrence O. Gonzales so that complete title and 
sole ownership can convey to him.  

 
 
On 
April 29, 2006, Appellant Cano signed a similar document.  On May 11, 2006, the appellee executed a 
Trustee Warranty Deed conveying the real property at issue from himself as 
trustee, to himself as an individual.  
With respect to the vehicles, on the same dates that they signed the 
above-described documents, the appellants signed and executed Warranty and 
Notarization Statements, effectively disclaiming their ownership rights in the 
five vehicles.  The appellants' 
reasons for executing these documents conveying the trust property to the 
appellee are at the center of this dispute.  

 
 
[¶5]      On January 22, 
2007, the appellants filed a complaint claiming that the appellee had breached 
the Trust and committed fraud both in his capacity as trustee and 
individually.  Specifically, they 
claimed that the documents they had signed were not valid and that they did not 
intend to waive their respective one-third interests in all of the trust 
property.  The district court held a 
two-day trial on the matter.  The 
appellee testified that, following the death of their father, the parties met to 
discuss the disposition of the trust property and that the appellants agreed to 
gift him the property to help supplement his income because he was on 
disability.  The appellee felt the 
disclaimer documents were executed in furtherance of this agreement.  The appellee's son also testified about 
conversations he had with Appellant Mendoza regarding her desire for the 
appellee to receive all of the trust property, except the cash.  The appellants, on the other hand, 
insisted that they never waived their interest in the trust property and that 
they signed the disclaimer documents at the direction of the appellee believing 
that such was necessary only for the administration of the 
Trust.

 
 
[¶6]      On November 26, 
2007, the district court issued a lengthy decision letter.  The district court concluded that the 
documents executed by the appellants disclaiming their respective interests in 
the trust property were valid and evidenced their consent to the appellee's 
actions.  On December 26, 2007, the 
district court entered an order directing the distribution of the trust property 
and dismissing with prejudice all of the appellants' claims against the 
appellee.  The appellants timely 
appealed the matter to this Court.

 
 
STANDARD 
OF REVIEW

 
 

[¶7]                  
            
"When 
a trial court in a bench trial makes express findings of fact and conclusions of 
law, we review the factual determinations under a clearly erroneous standard and 
the legal conclusions de novo."  Hansuld v. Lariat Diesel 
Corp., 2003 WY 165, ¶ 13, 
81 P.3d 215, ¶ 13 (Wyo. 2003) (citing Rennard v. Vollmar, 977 P.2d 1277, 1279 (Wyo. 1999)). 
When reviewing the factual findings of a district court following a bench trial, 
we apply the following standards:

 

 
The 
factual findings of a judge are not entitled to the limited review afforded a 
jury verdict. While the findings are presumptively correct, the appellate court 
may examine all of the properly admissible evidence in the record.  Due regard is given to the opportunity 
of the trial judge to assess the credibility of the witnesses, and our review 
does not entail re-weighing disputed evidence. Findings of fact will not be set 
aside unless they are clearly erroneous.  A finding is clearly erroneous when, 
although there is evidence to support it, the reviewing court on the entire 
evidence is left with the definite and firm conviction that a mistake has been 
committed.

 
 

Harber 
v. Jensen, 
2004 WY 104, ¶ 7, 97 P.3d 57, ¶ 7 (Wyo. 2004) (quoting Life Care Centers of 
America, Inc. v. Dexter, 
2003 WY 38, ¶ 7, 65 P.3d 385, ¶ 7 (Wyo. 2003)).  Findings may not be set aside because we 
would have reached a different result.  Harber, ¶ 7 (citing Double Eagle 
Petroleum & Mining Corp. v. Questar Exploration & Production 
Co., 2003 WY 139, ¶ 6, 78 P.3d 679, ¶ 6 (Wyo. 2003)). Also, in reviewing a trial court's findings of 
fact,

 

 
we 
assume that the evidence of the prevailing party below is true and give that 
party every reasonable inference that can fairly and reasonably be drawn from 
it.  We do not substitute ourselves 
for the trial court as a finder of facts; instead, we defer to those findings 
unless they are unsupported by the record or erroneous as a matter of 
law.

 
 

Harber, 
¶ 7 (quoting Life Care Centers, ¶ 7).  We affirm the trial court's findings if 
there is any evidence to support them. Id.

 Piroschak v. Whelan, 2005 WY 26, ¶ 7, 
106 P.3d 887, 890-891 (Wyo. 2005).

 
 
DISCUSSION

 
 
[¶8]      The 
appellants present two basic arguments.  
First, they claim that the district court's finding that they consented 
to the appellee's actions as trustee was clearly erroneous.  Second, they assert that the district 
court erred when it failed to find that the appellee breached certain duties as 
trustee.  Both arguments are 
governed by the Wyoming Uniform Trust Code.  Wyo. Stat. Ann. § 4-10-802 (LexisNexis 
2007), reads in relevant part:

 
 
(a)    A trustee shall administer 
the trust solely in the interests of the beneficiaries.

(b)    Subject to the rights of 
persons dealing with a fiduciary as provided in W.S. 4-10-1013, a sale, 
encumbrance or other transaction involving the investment or management of trust 
property entered into by the trustee for the trustee's own personal account or 
which is otherwise affected by a conflict between the trustee's fiduciary and 
personal interests is voidable by a beneficiary affected by the transaction 
unless:

(i)      The transaction 
was authorized by the terms of the trust;

(ii)     The transaction was 
approved by the court;

(iii)    The beneficiary did not 
commence a judicial proceeding within the time allowed by W.S. 
4-10-1005;

(iv)    The beneficiary consented to 
the trustee's conduct, ratified the transaction or released the trustee pursuant 
to W.S. 4-10-1009; or

(v)     The transaction 
involves a contract entered into or claim acquired by the trustee before the 
person became or contemplated becoming trustee. 

 
 
Wyo. 
Stat. Ann. § 4-10-1009 (LexisNexis 2007) provides:

 
 
(a)    A fiduciary is not liable to 
a beneficiary for breach of trust if the beneficiary consented in writing to the 
conduct constituting the breach, released the fiduciary from liability for the 
breach or ratified the transaction constituting the breach, 
unless:

(i)      The consent, 
release or ratification of the beneficiary was induced by improper conduct of 
the fiduciary; or

(ii)     At the time of the 
consent, release or ratification, the beneficiary did not know of the 
beneficiary's rights or of the material facts relating to the 
breach.

 
 
[¶9]      Since the 
appellee transferred property owned by the Trust to himself individually, Wyo. 
Stat. Ann. § 4-10-802(b) clearly controls.  
As such, the transactions are voidable unless one of the enumerated 
exceptions applies.  Of the five 
exceptions listed in § 802(b), the only exception applicable to these facts 
is (b)(iv), regarding consent.  The 
record is clear, and the appellants do not dispute that they signed the 
documents indicating their consent to the appellee taking title to the trust 
property.  Therefore, the only 
question is whether the transaction is voidable, under § 4-10-1009, because 
their consent was obtained by improper conduct by the appellee or because the 
appellants did not know their rights or the material facts relating to the 
breach of trust.   

 
 
[¶10]   We turn first to the question of 
whether the district court erred in its finding that the appellants were aware 
of their rights and the material facts surrounding the breach of trust.  With regard to the appellants' consent, 
the district court concluded: 

 
 
. 
. . the Court was called upon to weigh the evidence presented and found certain 
evidence more persuasive than other evidence.  The most persuasive and weighty evidence 
suggests that not only did [the appellants] knowingly and voluntarily execute 
their disclaimer documents, but they consented to the transactions understanding 
that the transaction were contrary to the express provisions of the Trust.  Thus, the Court finds that pursuant to 
Wyo. Stat. Ann. § 4-10-802(b)(iv), the transactions clearly benefitting [the 
appellee] as trustee were consented to by [the appellants].  Therefore, the transactions are not 
voidable and the disclaimer documents remain valid.

 
 
The 
record supports the district court's conclusion regarding the appellants' 
understanding of the nature of their actions.  The documents (the content of which is 
quoted above, see supra ¶ 4) clearly 
describe the property and reflect the appellants' intentions in waiving their 
right to that property.  Although 
the appellants asserted that they did not understand the nature or consequences 
of their actions when they signed the documents, the district court found that 
the "disclaimer documents speak loudly on their own concerning the 
transactions."  We have recently 
said  

 
 
With 
respect to an individual's knowledge of facts, the Wyoming Uniform Trust Code 
indicates:

        
(a)    Subject to 
subsection (b) of this section, a person has knowledge of a fact if the 
person:

                 
(i)        Has 
actual knowledge of it;

                 
(ii)       
Has received a notice or notification of it; or

                 
(iii)      
From all the facts and circumstances known to the person at the time in 
question, has reason to know it.

Wyo. 
Stat. Ann. § 4-10-104(a) (LexisNexis 2003).  Further, we have said: 

One 
who signs a contract generally cannot avoid it on the ground that he did not 
attend to its terms, or did not read it, or supposed that it was different in 
its terms, or that he took someone's word as to what it 
contained.

"The 
rule is that one who signs a paper, without reading it, if he is able to read 
and understand, is guilty of such negligence in failing to inform himself of its 
nature that he cannot be relieved from the obligation contained in the paper 
thus signed, unless there was something more than mere reliance upon the 
statements of another as to its contents.  
* * *"

(Citations 
omitted.)  Laird v. Laird, 597 P.2d 463, 467 (Wyo. 
1979); accord First State Bank of 
Wheatland v. American Nat'l Bank, 808 P.2d 804, 806 (Wyo. 
1991).

 
 

Schmidt 
v. Kilmer, 
2009 WY 23, ¶ 16, 201 P.3d 1121, 1126 (Wyo. 2009).  

 
 
[¶11]   Both of the appellants had 
significant experience working with legal and business documents.  Appellant Cano is classified as a 
paralegal, having worked as a receptionist and legal assistant with Colorado 
Legal Services for 16 years and doing contract legal work for three different 
attorneys.  Appellant Mendoza had 
worked for the State of Wyoming and AT&T, both jobs involving document 
review and preparation.  
Additionally, while it is not entirely clear, the record indicates that 
Mendoza drafted the disclaimer documents.  
Mendoza also testified that she understood that by signing the disclaimer 
document she was giving her share of the property to the appellee.  Finally, both of the appellants 
testified that they had the opportunity to have an attorney review the 
disclaimer and chose not to do so.  
In light of these facts, and considering the appellee's relative lack of 
sophistication, the district court found it "difficult for the Court to believe 
that [the appellee] was in any way capable of masterminding any scheme to 
trick' his sisters into anything, or exerting his will over them in any 
way."

 
 
[¶12]   We now turn to the other factor set 
forth in Wyo. Stat. Ann. § 4-10-1009  that is whether the appellants' consent 
was obtained by improper conduct by the appellee.  The appellants do not point to any 
improper conduct specifically relating to the execution of the release documents 
(such as fraud in the execution or duress), rather they provide a list of duties 
the appellee allegedly breached while acting as trustee.  The appellants claim that the appellee, 
in his role as trustee, breached his duty of impartiality, duty of prudent 
administration, duty of record keeping and identification of trust property, 
duty to enforce claims, and duty to inform and report.

 
 
[¶13]   Even if we 
were able to find that the appellee breached any of the duties the appellants 
allege, the appellants fail to demonstrate how these breaches wrongfully induced 
them into consenting to the transactions or deprived them of the opportunity to 
understand their rights or the material facts relating to their consent.  Virtually all of their "breach of duty" 
arguments involve alleged failures by the appellee to manage or protect trust 
assets.  Such claims are immaterial 
to the question presented here, inasmuch as the appellants waived their rights 
to any of the trust assets other than cash.

 
 
[¶14]   The only 
alleged breach that may have had any bearing on the validity of the appellants' 
consent was the alleged breach of the appellee's duty to inform and report.  Without citing specifics, the appellants 
address that breach by asserting that the appellee "deliberately hid material 
facts from the Appellants which would have helped them protect their 
interests."  Such a claim, if 
supported, could provide grounds to void the appellants' consent to the 
transactions.  However, the 
appellants fail to call our attention to any fact that the appellee deliberately 
or wrongfully hid.  More 
importantly, they do not even attempt to show how knowledge of specific 
additional facts would have been material to their decision to waive their 
interests in the trust property.

 
 
CONCLUSION

 
 
[¶15]   Our review 
of the record in light of the articulated standard of review reveals that the 
district court's finding were not clearly erroneous.  Although it is clear that the appellee, 
as trustee, entered into transactions favoring his personal interests over those 
of the appellants, we affirm the district courts upholding of those transactions 
because the appellants consented thereto, in writing.  Finally, we sustain the district court's 
conclusion that the appellants were not wrongfully induced by the appellee to 
consent to the transactions or deprived of their ability to understand their 
rights or the material facts surrounding their 
consent.

 
 
[¶16]   We 
affirm.