Case Title: In re Estate of Kurrelmeyer

Citation: 179 Vt. 359, 2006 VT 19, 895 A.2d 207

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2006-03-03T00:00:00Z

Document:
In re Estate of Kurrelmeyer  (2004-347); 179 Vt. 359; 895 A.2d 207

2006 VT 19

[Filed 03-Mar-2006]



       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                 2006 VT 19

                                No. 2004-347


 In re Estate of Louis H. Kurrelmeyer     Supreme Court

                                          On Appeal from
                                          Chittenden Superior Court

                                          September Term, 2005


       Matthew I. Katz, J.

  Karl W. Neuse of Neuse, Smith & Venman, P.C., Middlebury, for
  Plaintiffs-Appellees Ellen L. Kurrelmeyer and Ellen L. Kurrelmeyer,
  Executrix of the Estate of Nancy Kurrelmeyer.

  James W. Runcie of Ouimette & Runcie, Vergennes, for Plaintiff-Appellee
  Louis H. Kurrelmeyer, Jr.

  Thomas F. Heilmann and Wendy L. Fuller of Heilmann, Ekman & Associates,
  Inc., Burlington, for Defendant-Appellant Martina Kurrelmeyer.


  PRESENT:      Reiber, C.J., Dooley, Johnson and Skoglund, JJ., and
                Burgess, D.J., Specially Assigned

        
       ¶ 1.     BURGESS, D.J., Specially Assigned.   Martina Kurrelmeyer
  appeals an order of the Chittenden Superior Court declaring void, as a
  matter of law, the revocable intervivos trust she created under her
  husband's durable power of attorney prior to his death.  Mr. Kurrelmeyer's
  surviving children claimed the power of attorney did not grant authority to
  create a trust and that transfer of Mr. Kurrelmeyer's property to the trust
  constituted unauthorized self-dealing and a breach of Martina Kurrelmeyer's
  fiduciary duty as her husband's agent.  We reverse the superior court's
  determination that the trust is void as a matter of law, and remand for
  further proceedings to determine whether Martina Kurrelmeyer's actions
  breached her fiduciary duty of loyalty as her husband's agent.

       ¶ 2.     The undisputed facts are summarized as follows.  In 1996,
  Louis Kurrelmeyer executed two durable general powers of attorney to
  appoint his wife, Martina Kurrelmeyer, and his daughter, Nancy Kurrelmeyer,
  as attorneys-in-fact.  Louis Kurrelmeyer was competent at the time he
  executed the powers of attorney.  In December of 2000, Martina, pursuant to
  her powers under the durable power of attorney, executed a document
  establishing the "Louis H. Kurrelmeyer Living Trust," with herself and
  Nancy as co-trustees.  Days after she created the trust, Martina
  transferred certain real estate owned by her husband, the "Clearwater"
  property, to herself and Nancy as co-trustees of the trust.  At the time of
  the creation of the living trust and the transfer of the Clearwater
  property, Louis Kurrelmeyer was no longer competent.  Mr. Kurrelmeyer died
  testate a year later, and Martina was appointed executrix of his estate.  
   
       ¶ 3.     Louis Kurrelmeyer's last will and testament, executed in
  1980, contained a specific provision for the Clearwater property.  Under
  the will, Martina would take a life estate in the property, with
  responsibility for taxes and upkeep, and upon her death the property would
  pass to Mr. Kurrelmeyer's surviving children as joint tenants with rights
  of survivorship.  In contrast, the terms of the trust provide Martina
  additional rights with regard to the property.  Under the terms of the
  trust, Martina may occupy the home as long as she wishes and the trust is
  permitted to pay the expenses on the property should she fail to do so. 
  The trustees would be required, however, on Martina's unilateral request,
  to sell the home, with the sale proceeds to be used either to purchase
  another home for Martina or, alternatively, to be added to the trust
  principal.  Additionally, the trust provides that all income from the trust
  property would be paid to Martina, as well as so much of the principal as
  the trustees deem necessary and proper for her support.  Upon Martina's
  death, the trust principal would be distributed to Louis's children, if
  they survived him, with any deceased child's share to be distributed to
  that child's descendants or held in trust until such descendants reached
  the age of twenty-five.  The trust requires that there be at least one
  other trustee serving so long as Martina is serving as a co-trustee, and
  the co-trustees must act by mutual agreement.  

       ¶ 4.     During the probate administration of Louis Kurrelmeyer's
  estate, his son, Louis Kurrelmeyer Jr., objected to the exclusion of the
  Clearwater property from the inventory completed by Martina Kurrelmeyer. 
  Claiming that Martina exceeded her authority in creating the trust, Louis
  Jr. asked the probate court to set aside the trust and include the
  Clearwater property in the probate estate to be distributed in accordance
  with Mr. Kurrelmeyer's will.(FN1)  The probate court upheld the trust, and
  the children appealed to the superior court.  
   
       ¶ 5.     Martina Kurrelmeyer moved for summary judgment, arguing the
  creation of the trust and transfer of the Clearwater property to the trust
  were authorized under the broad authority granted to her by the durable
  power of attorney.  The children moved for a judgment in their favor,
  arguing that the power of attorney did not authorize creation of a
  revocable trust, that the transfer of the Clearwater property to the trust
  was a breach of Martina's fiduciary duty because it constituted
  self-dealing, and that the transfer violated the gift-giving proscription
  of the power of attorney.  

       ¶ 6.     The superior court reversed the probate court's order. 
  Granting summary judgment for the children, the superior court concluded
  that the power of attorney did not authorize Martina to create a trust. 
  The court found the power of attorney ambiguous on the trust issue, and
  narrowly construed the language to authorize only maintenance of, and
  additions to, trusts already existing when the power of attorney came into
  being.  The superior court also opined that, because the appointment of
  Martina as attorney-in-fact did not authorize her to make a will on behalf
  of the principal, she was without authority to convey his property in trust
  in a manner that would "alter" his existing will.  Martina appealed,
  complaining that the superior court erred in applying a strict construction
  analysis rather than recognizing Mr. Kurrelmeyer's intention to make
  Martina his attorney-in-fact for general purposes, including trust
  creation, as is evident, she argues, from the plain language of the power
  of attorney.  

       ¶ 7.     On appeal from a grant of summary judgment, we apply
  the same standard as the trial court.  Wesco, Inc. v. Sorrell, 2004 VT 102,
  ¶ 9, 177 Vt. 287, 865 A.2d 350.  Summary judgment is appropriate where the
  undisputed facts demonstrate either party is entitled to judgment as a
  matter of law. V.R.C.P. 56(c)(3).  Where the parties agree there are no
  contested issues of fact, the question of whether either party is entitled
  to judgment as a matter of law is reviewed de novo.  Bacon v. Lascelles,
  165 Vt. 214, 218,