Case Title: JOHN WILLIAM SHERARD and NILA YOCTOROWIC V. GEORGE E. SHERARD, individually and as Trustee of the GUNTO IO REO TRUST; JAKE H. SHERARD; and HAROLD C. SHERARD

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 2006-08-29T00:00:00Z

Document:
JOHN WILLIAM SHERARD and NILA YOCTOROWIC V. GEORGE E. SHERARD, individually and as Trustee of the GUNTO IO REO TRUST; JAKE H. SHERARD; and HAROLD C. SHERARD2006 WY 105142 P.3d 673Case Number: 05-242Decided: 08/29/2006
APRIL 
TERM, A.D. 2006

 
 
JOHN WILLIAM SHERARD and NILA 
YOCTOROWIC,

 
 
Appellants

(Plaintiffs),

 
 
v.

 
 
GEORGE E. SHERARD, individually 
and as Trustee of the GUNTO IO REO TRUST; JAKE H. SHERARD; and HAROLD C. 
SHERARD,

 
 
Appellees

(Defendants).

 
 
Appeal from the 
DistrictCourtofSheridanCounty

The Honorable John C. 
Brackley, Judge

 
 
Representing 
Appellants:

James P. Castberg, Sheridan, Wyoming.

 
 
Representing Appellees:

Kristen L. Cogswell, Sheridan, Wyoming; Shelly 
A. Cundiff, Dayton, 
Wyoming.

                        
            

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

 
 
* Chief 
Justice at time of oral argument.

 
 
BURKE, 
Justice.

            

[¶1]      Appellants 
challenge a judgment of the district court declaring a quitclaim deed 
valid.  They also contend the 
district court erred in granting a motion for judgment as a matter of law 
against Appellants on their claim of fraud.  We affirm.

 
 
ISSUES

 
 
[¶2]      We restate the 
issues as:

 
 

I.                     
Whether the trial court 
erred in determining that the Quitclaim Deed was a valid 
conveyance.

 
 

II.                   
Whether the trial court 
erred in granting the motion for judgment as a matter of law on the claim for 
fraud.

 
 
FACTS

 
 
[¶3]      The facts of this 
case are simple and are largely not in dispute.  On May 8, 1998, Hazel G. Sherard and her 
son, George E. Sherard ("George"), executed a document entitled, "Contract And 
Declaration Of A Business Organization  A Common Law Business Trust 
Organization Also Known As An Unincorporated Business Organization," which 
authorized its trustees to operate under the name of GUNTO IO REO (hereinafter 
"Trust").1  Additional documents were executed in 
connection with the Trust including conveyances of real property to the Trust.2  Ms. Sherard and George became the sole 
trustees of the Trust.  The 
ownership of the Trust was comprised of 100 units  the total number of units 
that the Trust Agreement authorized.  
Trust Certificate No. 1 was issued to Ms. Sherard representing her fifty 
units and George was issued Trust Certificate No. 2 representing his fifty 
units.  Both certificates were 
retained in the records of the Trust.

 
 
[¶4]      Ms. Sherard died 
on May 2, 2001, leaving five surviving children:  George, Jake H. Sherard ("Jake"), Harold 
C. Sherard ("Harold"), John W. Sherard ("John") and Nila K. Hickman Yoctorowic 
("Nila").  Shortly before her death, 
Ms. Sherard executed two documents that create the basis for the current 
dispute.  The first document, 
referred to by the parties as the "Transfer Document," was executed on April 24, 
2001, and purported to make John a certificate holder of the Trust.  The document stated in pertinent 
part:  "I, Hazel Sherard, do hereby 
give, endow, assign, or transfer unto John William Sherard, the Trust 
Certificate Units represented by Trust Certificate Number 50 [a]s recorded by 
the Secretary of . . . GUNTO IO REO."  
The second document was a Quitclaim Deed signed on May 1, 2001, by Ms. 
Sherard and George in their capacity as trustees.  This deed transferred the real property 
from the Trust to four of Ms. Sherard's children:  George, Harold, Nila and Jake.  John was not identified as a grantee on 
the deed.

 
 
[¶5]      After Ms. 
Sherard's death, the children held a family meeting to discuss the disposition 
of her possessions.  At the meeting, 
John presented the Transfer Document to his siblings for the first time.  John also discovered that he was not a 
grantee on the Quitclaim Deed.   

 
 
[¶6]      John filed a 
declaratory judgment action seeking a determination that the deed was null and 
void.3  He also alleged that he was fraudulently 
deprived of his ownership of fifty units of the Trust.  Subsequently, an amended complaint was 
filed in which John's sister, Nila, joined the suit as co-plaintiff.  The Appellees filed a counterclaim 
asking the court, inter alia, to find 
the Transfer Document of no force or effect and to quiet title to the real 
property and confirm their ownership interests. 

 
 
[¶7]      A bench trial was 
held on July 22, 2005.  At the close 
of Appellants' evidence, Appellees moved for judgment as a matter of law on the 
claim of fraud.  The district court 
granted the motion.  At the 
conclusion of the trial, the district court ruled that the Transfer Document was 
unenforceable and declared the Quitclaim Deed valid.  This appeal followed.  

 
 
STANDARD OF 
REVIEW

 
 

[¶8]      "Final orders and 
judgments entered in declaratory judgment proceedings may be reviewed as in 
other civil actions."  Ford v. 
Board of County Comm'rs, 924 P.2d 91, 93 (Wyo. 1996) (quoting Wyo. Stat. Ann. § 
1-37-109 (1988)).  When a matter has 
been the subject of a bench trial before the 
district court, we review its factual determinations under a clearly erroneous standard and its legal 
conclusions de novo.  Union Pacific R.R. v. TronaValley Fed. Credit Union, 2002 WY 165, 
¶ 6, 57 P.3d 1203, 1205 (Wyo. 2002).  
We 
will not set aside a district court's findings of fact unless they are clearly erroneous or contrary to the great weight of the evidence.  Kimball v. Turner, 993 P.2d 303, 305 (Wyo. 1999).  When reviewing questions of law, we afford no deference to the district court.  Harber v. Jensen, 2004 WY 104, ¶ 
8, 97 P.3d 57, 60 (Wyo. 2004).  
In addition, we review de 
novo a decision to grant or deny judgment as a matter of law and afford no 
deference to the district court's views.  
Johnson 
v. Reiger, 2004 WY 
83, ¶ 8, 93 P.3d 992, 995 (Wyo. 2004).  

 
 
DISCUSSION

 
 
Quitclaim 
Deed

 
 
[¶9]      Appellants claim 
that John became a certificate holder of the Trust upon Ms. Sherard's execution 
of the Transfer Document.  The 
Amended Complaint alleges that "[t]he effect of the purported Quitclaim Deed, if 
valid, would be to deprive John of property that . . . John would be entitled to 
as owner of the fifty (50) Certificate Units assigned to John by Hazel on April 
24, 2001."4  As support for their position, 
Appellants point to Section C, ¶ 35 of the Trust, requiring that Trust assets be 
distributed proportionately among the certificate holders of the Trust upon its 
termination, unless contrary instructions are contained within the minutes.5  They assert that the Quitclaim Deed 
violated ¶ 35 of the Trust and, as a result, the deed is void.  

 
 
[¶10]   Appellees dispute that John is a 
certificate holder of the Trust.  
They contend that because John failed to surrender the assignment to the 
trustees and obtain a new certificate in accordance with provisions of the 
Trust, no transfer occurred.  
Appellees further contend that no transfer occurred because Ms. Sherard 
did not own Certificate 50; she owned Certificate 1.  They claim that there is no evidence 
that Certificate 50 ever existed.  

 
 
[¶11]   The parties' arguments center on 
the interpretation of the Trust document.6  "The meaning of a trust instrument is 
determined by the same rules that govern the interpretation of contracts."  Woods v. Wells Fargo Bank, 2004 WY 61, ¶ 
42, 90 P.3d 724, 736 (Wyo. 2004).  
The intent is determined from the trust document itself.  Id.  
"[T]he interpretation of the language of a trust instrument 
constitutes a question of law.  The 
appellate court claims for itself plenary independent and non-deferential 
authority to reexamine a trial court's legal rulings' de novo."  Rock Springs Land and Timber, Inc., v. 
Lore, 2003 WY 100, ¶ 12, 75 P.3d 614, 619 (Wyo. 2003) (internal citation 
omitted).  Where the language used 
in the trust is unambiguous, the plain provisions of the trust determine its 
construction and interpretation does not require consideration of evidence.  Id., ¶ 12, 75 P.3d  at 620; Woods, ¶ 42, 90 P.3d  at 
736.

 
 
[¶12]   Upon our review, we find that the 
district court properly rejected John's claim that he is a certificate holder of 
fifty units of the Trust.  Paragraph 
33 of Section C of the Trust provides:

 
 
¶ 33:  The Certificates shall be transferable 
by an appropriate assignment in writing and by surrender to the Trustees or to 
the person or agency designated by them, but no transfer shall be of any effect as 
against the Trustees even with actual or constructive notice until a new 
Certificate has been duly recorded upon the books of the [Trust] kept for that 
purpose.  

 
 
(Emphasis added.)  "The rule regarding effectuation of 
transfers of certificates of interest in a business trust is that, where the 
declaration of trust prescribes the manner in which shares or certificates of 
interest shall be transferred, there must be a compliance therewith."  Peoples Bank v. D'Lo Royalties, Inc., 
235 So. 2d 257, 265 (Miss. 1970) (citing 13 Am.Jur.2d Business 
Trusts § 28 (1964); 12 C.J.S. Business Trusts § 17 (1938)).  "Trust instruments often require that 
transfers of shares be entered in the books of the trust.  Such provisions are binding upon all 
persons, shareholders, transferees, and trustees."  Id. 
at 266 (quoting 156 A.L.R. 22 (1945)).  
Pursuant to Section C, ¶ 33 of the Trust, a transfer is effective only 
when a new certificate is issued and recorded.  It is undisputed that this procedure was 
not followed in this case.  As a 
result, John did not become a certificate holder of the 
Trust.

 
 
[¶13]   Appellants' challenge concerning 
the validity of the Quitclaim Deed is premised upon John's perceived rights as a 
certificate holder to the property of the Trust.  Having determined that the Transfer 
Document was invalid and that John is not a certificate holder of the Trust, we 
conclude that the district court did not err in confirming the validity of the 
deed.

 
 
Fraud

 
 
[¶14]   For their claim of fraud, 
Appellants alleged the following in their Amended 
Complaint:

 
 

22.             
George, while acting as 
Trustee, and individually and Jake and Harold, in concert with each other and 
other persons unknown to Plaintiffs at this time, intentionally, with malice 
aforethought, attempted to and did fraudulently deprive John of real property 
that John was entitled to as owner of fifty (50) Trust Certificate 
Units.

 
 

23.             
The fraud and the 
fraudulent acts of Trustee and George, Jake and Harold [were] initially 
committed on or about May 1, 2001, at the time that Trustee executed the 
Quitclaim Deed and continued thereafter up to and including January 31, 2002, 
the date that a Quitclaim Deed prepared by George, a copy of which is attached 
hereto as Exhibit # 2, was executed by Harold.

 
 

24.             
The fraud and the 
fraudulent acts of George Emmett Sherard as Trustee, George, Jake and Harold 
continue to the date of the filing of this Complaint.

 
 
At the close of 
Appellants' evidence, Appellees moved for judgment as a matter of law on the 
claim of fraud.  They asserted that 
the evidence was legally insufficient to support the claim.  The district court agreed and granted 
the motion.  

 
 
[¶15]   Appellants had the burden of 
proving fraud by clear and convincing evidence.  Sundown, Inc. v. Pearson Real Estate Co., 
8 P.3d 324, 330 (Wyo. 2000).  
The elements of fraud are:  
(1) the defendant made a false representation intended to induce action 
by the plaintiff; (2) the plaintiff reasonably believed the representation to be 
true; and (3) the plaintiff relied on the false representation and suffered 
damages.  Id.  "[F]raud will not be imputed to any 
party when the facts and circumstances out of which it is alleged to arise are 
consistent with honesty and purity of intention."  Duffy v. Brown, 708 P.2d 433, 437 
(Wyo. 
1985).    It will never be presumed.  Id.

 
 

[¶16]   In reviewing de novo the district court's decision to 
grant judgment as a matter of law, we view the evidence in the light most 
favorable to the nonmoving party and give that party the benefit of all 
reasonable inferences that may be drawn from the evidence.  Johnson, ¶ 8, 93 P.3d  at 995.  "When 
the evidence permits more than one reasonable inference or the inferences 
favorable to the moving party are subject to doubt, . . . a motion for judgment 
as a matter of law must be denied."  
Id.  Although judgment as a matter of law 
should be granted cautiously and sparingly, where the evidence is not legally 
sufficient to support a claim, the district court has an obligation to enter 
such a judgment.  Id.  

 
 
[¶17]   Our review of the record reveals a 
complete absence of any evidence to support the claim of fraud even when 
reviewed in the light most favorable to Appellants.  John's fraud claim was premised upon his 
claim to be the owner of fifty trust certificate units.  As previously discussed, John failed to 
satisfy his burden in that regard and presented no evidence that a new trust 
certificate had been issued to him and recorded as mandated by the express 
provisions of the Trust.

 
 
[¶18]   In addition, Appellants presented 
no evidence of any false representation made by any Appellee which was intended 
to induce action by either Appellant.  
There is no evidence in the record that either Appellant relied upon any 
representation made by any of the Appellees.  The undisputed evidence establishes that 
none of the Appellees were aware of the Transfer Document until after John 
presented the document at a family meeting subsequent to Ms. Sherard's 
death.  We find no error in the 
district court's decision granting judgment as a matter of law on Appellants' 
fraud claim.

 
 
[¶19]   Affirmed.

 
 
FOOTNOTES

 
 

1The parties 
describe the Gunto Io Reo Trust as a statutory or business trust.  Statutory trusts are  governed by Wyo. Stat. Ann. § 17-23-101 
et seq.  Although the validity of the Trust was 
questioned at trial, the issue was not resolved by the district court's 
judgment.  This issue is not 
presented to us on appeal.

 
 

2Ms. Sherard 
inherited real property located at 1657 South Sheridan Avenue which she placed 
into the Trust.  This property was 
later conveyed out of the Trust to the State of Wyoming in exchange for real property located 
at 308 Fort 
Road and 2058 Frackleton Street.  These properties were deeded by the 
sellers to Ms. Sherard and George in their capacity as 
trustees.

 
 

3The initial 
complaint alleged that the deed was void because Ms. Sherard lacked the mental 
capacity to understand the nature and effect of executing a Quitclaim Deed and 
that John was entitled to a portion of the property because he was a certificate 
holder of the Trust.  In addition to 
those claims, the Amended Complaint alleged that the deed was void for lack of 
consideration.  Appellants 
eventually stipulated that Ms. Sherard's mental capacity was not impaired and 
abandoned the lack of consideration claim.

 
 

4Paragraph 19 
of the Amended Complaint also alleges that:

 
 
The 
execution of the purported Quitclaim Deed by Trustee and Hazel on May 1, 2001, 
was without consideration and therefore constituted a distribution of trust 
assets in violation of the terms of the trust which require that a distribution 
of trust asset[s] can only be made to unit holders of the 
trust.

 
 
Appellants 
eventually abandoned this argument, relying solely on the claim that John was 
entitled to distribution of the real property due to his status as a certificate 
holder.  During closing arguments, 
Appellants summed up their contention surrounding the validity of the Quitclaim 
Deed as follows:  

 
 
[PLAINTIFFS' 
COUNSEL]:  . . . John Sherard is 
[the] owner of fifty units of the trust, even though the transfer was not 
completed because the trustee would not accept the transfer.  If the Court finds that is valid, John 
is entitled to one-half of the property.  
That was the balance of my argument, Your Honor.

 
 

5Section C, ¶ 
35 of the Trust provides:  "The 
Trust shall be proportionately distributed to the Certificate holders upon 
termination, providing there are no contrary instructions contained within the 
minutes."

 
 

6Pursuant to 
Wyo. Stat. Ann. § 17-23-102(a)(i) (LexisNexis 2001), "[t]he fact of ownership 
shall be determined and evidenced . . . in conformity to the applicable 
provisions of the governing instrument of the statutory 
trust[.]"