Title: In re Estate of Damon. S.Ct. Order of Amendment, filed 02/28/2006 [pdf]. S.Ct. Order Denying Appellant-Movant Christopher James Damon Haigs Motion for Reconsideration, filed 03/09/2006 [pdf], 110 Haw. 281.

State: hawaii

Issuer: Hawaii Supreme Court

Document:

LAW LIBRARY
*** FOR PUBLICATION ***

SSS
IN THE SUPREME COURT OF THE STATE OF HAWAI‘T

-+-000.

 

sas
Shes

In the Matter of the Estate of

    

 

“WVH

SAMUEL M. DAMON, Deceased.

 

 

oni

  

(2:8 HY 91 g3,

Equity No. 2816-2

Trust Created Under the Will of
ased.

SAMUEL M. DAMON, Dé
SSS

No, 25216

 

APPEAL FROM THE FIRST CIRCUIT COURT
(P. No. 6664 & EQUITY NO> 2816-a)

FEBRUARY 16, 2006

MOON, C.d., LEVINSON, NAKAYAMA, AND ACOBA, JJ.;
CIRCUIT JUDGE WILSON, IN PLACE OF DUFFY, g.," RECUSED
OPINION OF THE COURT BY MOON, C.J.

‘The instant case involves the interpretation of a

corpus distribution provision in a trust (the trust) created

under the last will and testament of Samuel Mills Damon.
Petitioner-appellant Michael =. Haig (M. Haig) and four groups of
respondents-appellants (hereinafter, collectively, Appellants],

specifically identified infra, appeal from the June 21, 2002

amended judgment of the Circuit Court of the First Circuit, the
——

«© * FOR PUBLICATION ***

Se —

jonorable Colleen K, Hirai presiding, entered pursuant to Hawai't
probate Rules (HPR) Rule 34 (2003) and Hawai'i Rules of Civil
procedure (HRCP) Rule 54 (2003).? Essentially, Appellants seek
review of the circuit court's Nay 24, 2000 findings of fact
(por), conclusions of law (COL), and order with respect to @
petition for interpretation, discussed more fully infra. The
circuit court determined that, for purposes of distribution of

the corpus upon the termination of the trust, the stirpital root!

ig set at the level of Damon's children, and, thus, the corpus is

to be divided into two equal shares, representing Damon’ s two

—

+ gpp Rule 34 provides inn

 

evant part

(a) gatry of dudament. All formal testacy orders

(Ue) Bot of usameM jagnent snd the judgnent shail be
ised MELB Slerk ot the court. “such judgments ehall be
Les soo" Gnediately appealable as provided by statute

i ther or: ‘chat ful.
al ofaae Snare sidbeates 2 dope oat tag sd her order that fi ees but that does aot tinally eid

a ae grin of the Naval i fuice of Givi
Procedure

 

(anphasie added.)

2 nce Rule 54 provides in pertinent part:

(®) Judgment upon multiple claims or involvin
multiple patties When ore than one cain for reliet is
Presented in an action Sr when mileiple parties are

presents? the court say direct the entry of a final judgment
involved. Sr'more but fewer chan all of the claims of

Bee enSaly upon an express determination that there ie ne
Parte con’ gor delay and upon an express direction for the
IEE enon geene, in the sbaence of such determination an
Gireceion, any form of decision which
dusGicetes fever than all the claina or the rights and
sae tiee of fewer than all the parties shall not

diabil teste action aa to any of the claims or partie

 

 

i

 

> the ters “etixpital root," ‘root, * "atirp
interchangeably throughout this opinion,

 

 

+ and “etock* will be used
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deceased children, both of whom left surviving issue, with the
descendants of Damon's children taking per stirpes.

on appeal, Appellants essentially contend that the
circuit court erred in setting the stirpital root at the level of
Damon’s children. Specifically, M. Haig and three of the four
groups of respondents-appellants maintain that the stirpital root
should be set at the level of Damon's great-grandchildren, and
the remaining group of respondents-appellants maintain that the
stirpital root should be set at the level of Damon's
grandchildren.

For the reasons discussed more fully infra, we hold
that Appellants’ contentions lack merit. Accordingly, we affirm
the circuit court's June 21, 2002 amended judgment.

II. BACKGROUND
A. Bactual Backsround
On November 10, 1914, Damon executed his last will and

testament (the will), creating the trust to administer hie estate

 

upon his death, Damon's estate consisted of considerable land
holdings, including Moanalua Gardens, various business interests,

of

 

and other assets. At the time Damon executed his will, thr
his four children, Mary, Henry, and Douglas, were alive. Damon’ s
fourth child, Samuel, had died in 1904, leaving four children.
one of Samuel's children died as an infant in 1905, and Samel’s
other three children were alive when Damon executed his will.

Damon’s child, Henry, also had one child, Harriet D. Baldwin, who

 
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was then Henry's only child and was alive when Damon executed his
will.

on January 12, 1918, Danon was declared incompetent,
and an order for appointment of guardianship was filed with the
circuit court. Damon died on July 1, 1924, survived by his widow
and his three children (Mary, Henry, and Douglas). Two of
Damon's three grandchildren by Samuel predeceased Damon without
any issue. Therefore, only one of Samuel's four children, Samuel
R. Damon, survived Danson. Also surviving Damon was Henzy’s
child, Harriet D. Baldwin, previously mentioned, and Henry’s
three additional children, Frances Holt, Joan Haig (J. Haig), and
Henry E. Damon. Damon's two other children, Mary and Douglas,
@id not have any children, and both ultimately died without
issue. Thus, at the time of Danon’s death, Damon was survived by
hie widow, three of his four children, and five of his eight
grandchildren. While four of Damon's surviving grandchildren
(Harriet D. Baldwin, Frances Holt, J. Haig, and Henry =. Damon)
descended from Damon's son enry’s line, only one of Danon‘s
surviving grandchildren (Samuel R, Danon) descended from Damon’ s
son Samuel's line. No more grandchildren were born after Damon's
death.

Damon's will was admitted to probate following Damon’
death in 1924, ‘The ten-page will consisted of four numbered
sections and was virtually devoid of any punctuation. The will

was prefaced with routine administrative matters, including
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provisions dictating the payment of debts and funeral expenses,
the creation of the trust, and the selection of the initial
trustees. The first section of the will instructs the trustees
to maintain Moanalua Gardens for the recreation and enjoyment of
the public and to distribute the flowers, fruits, and “other
vegetable products" of Moanalua Gardens to Danon’s widow and,
upon her death, “to such of my children as shall continue to live
in equal shares[.]" After the death of his widow and children,
the flowers, fruits, and other vegetable products were to form
part of Damon’s residuary estate. The second section of the will
essentially provides that the trustees have discretion in
managing Damon's business interests. The third section of
Damon‘s will provides that a portion of the incone of the trust
is to be used for the maintenance of Moanalua Gardens.

‘The fourth section of the will contains, inter alia,
Danon’s instructions for the distribution of income and corpus
from the trust, providing in relevant part:

To pay the balance of the said net incone to my said
wite during her life and on her death and for and during the
Deriod of the life of ste last survivor of all of ay
Children and grandchildren who shall be Living at my dec
Eo pay one-fourth of the said balance of the said net income
fo ay daughter Mary Damon during her life and on her death
to her issue such iesue in every case taking in succession
by right of representation and to pay one-fourth of the said
balance of the said net income to sy son Henry ¥. Damon for
his life and on Ais death to his issue such issue in every
Such cage taking in succession by right of representation
find to pay one-fourth of the said balance of the said net
Income £0 my son Douglas Danon for his life and on his death
to his issue such issue in every such case taking in
nuccession by right of representation snd to pay the
fensining one-fourth of the gaid balance of the vaid net
incone £0 the children of my deceased son Samuel B. Damon
and the survivors and last survivor of them during their his
or her lives or life provided however that if any of the
children of the #aid Gamuel . Damon ehall dle leaving any

 

 

 

     

 

 

 
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chilé or children him or her surviving then and in every
Such case last mentioned child or children shall take the
Share of the one-fourth of the said balance of the eaid net
intone during nis her or their lives or life which hie her
of their parent would have taken if such parent had
Continued to live and on the death of the last aurvivor of
the children of the said Samuel B. Dazon my trustees shall
pay the one-fourth of the said balance of the said net
Income during the life of the last survivor of all of my
children and grandchildren who shall be living at ny deces
fo all of the iseve of my said son Eamiel . Damon such
issue in every such case taking in succession by right of
representation provided hovever and I hereby declare that on
the death of any of my children without leaving lawful save
him or her surviving ox on the failure of the issue of any
of my children whether living at my death or dying in my,
Lifetime then and in every such cave the share of the
balance of the said net income of my said reeiduary estate
wiich my said child eo dying or the issue of any of my aid
Children so dying would be entitied to if Living and”any
additional share or shares which say accrue or be added
ceerece DY VEetee ot enLs Prnaet eer Se hod the eee cer
go and accrue by vay of addition to the share or shares of
Ry other children of ehild or the lanue of my other children
GF child who shall be dead of the said balance of the saie
children and-arandeh{laren who-ahe iving at the

Sabana or stay tase seta aa arene BS aay
Hieresosver the sane env be TW Tae? for alt ofa tgesg a
‘hall then be ilviea sar stirees and sot eer capital]

(Bmphasis added.) The non-emphasized provision constitutes the

 

 

 

 

 

 

 

 

 

   

 

income distribution proviaion and has not faced any legal
challenge. Pursuant to the income distribution provision,
following the death of Damon's widow and the deaths of Mary and
Douglas (Danon’s two children who died without issue), the
trustees were to distribute the remaining income, after deducting
maintenance expenses relating to Moanalua Gardens and other
administrative expenses, as follows: (1) one-half to the issue
of Samuel Danon, by representation in each generation; and

(2) one-half to the issue of Henry Damon, by representation in

each generation. The emphasized provision constitutes the corpus

 
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distribution provision and is at the center of dispute in this

case.
B.  garlier Proceedings

on January 17, 1992, the trustees? filed a petition for
instructions regarding the termination of the trust (petition for
instructions) with the circuit court. Therein, the trustees
stated that, based upon the language of the will and principles
of will construction, the trust could be construed to terminate

either: (1) upon the death of the last survivor of Damon’s

 

children and grandchildren living at the time of his death, i.e.,

 

the last measuring life; or (2) twenty-one years after the death
of such last survivor or last measuring life. At the time of
filing, all of Damon's children had already died. However, three
of Danon’s grandchildren (Frances D. Holt, Harriet D. Baldwin,
and J. Haig), who were living at the time of his death, were
still alive, although they were all in their seventies. The
circuit court entered an order granting the petition for
instructione and issued instructions to the trustees to continue
the trust for twenty-one years after the death of the last
measuring life, ise., the last survivor of Damon's three living
grandchildren.

< Rithough not apparent from the record, we note that one group of

respondente-appellante mention in their opening brief that the value of
Banon's estate at distribution could well sppreach one billion dollars

 

+ Ag the tine, the trustees of Danon’s trust were D. Hebden Porteus,
David m, Haig, Fred C. Weyand, and Paul Mullin Ganley. The current trustees
Yenain the same, except Walter A. Dogs, Jr. has replaced D. Hebden Porteus
David M. Haig ig aiso the son of J. Haig, thus, making him Danon’s great
‘grandchild.

 

 
 

* FOR PUBLICATION

 

 

However, on March 30, 1994, this court vacated the
circuit court's order and remanded for issuance of instructions
to terminate the trust upon the death of the last measuring life.
‘Trust Created Under the Will of Damon, 76 Hawai'i 120, 869 P.2d
1339 (1994) (Damon I). Thus, pursuant to Damon I, the trust was
to terminate upon the death of the last survivor of Damon's three
living grandchildren, Frances D. Holt, Harriet D. Baldwin, and J.
Haig.

C. Procedural History
1. The Per Stirpes Petition

on April 8, 1998, anticipating the termination of the
trust, M. Haig, a great-grandchild of Damon and a grandchild of
Henry Damon, filed the Petition Seeking an Interpretation of the
Will of Samiel Mills Damon as it Relates to the Distribution of
the Corpus at Termination of the Trust (the per stirpes petition)
with the circuit court. Therein, M. Haig acknowledged that Damon

intended a per stirpes, rather than a per capita, distribution of

* Ae the tine, Frances D. Holt, Harriet D. Baldwin, and J. aig were
still alive. “However, on March 12, 2004, after the notice of appeal was filed
counsel for one group of respondente-appellante filed a
Suggestion ‘with this coure, pursuant to Hawaii Rules of Appellate
Procedure (HRAP) Rule 43(a) (2003) (relating to filing @ notion suggesting the
Geath on the record after the filing of the notice of appeal), staring that
Frances D. Holt and Harriet D. Baldwin had passed away.

 

    
     

Moreover, J. Haig had also passed away during the pendency of the
instant appeal, thus, triggering the termination of the trust. Consequently,
on January 23, 2006, this court approved the motion for substitution of M.
Haig as the executor of the estate of J. Haig. Inasmuch as the briefings for
this appeal were completed while J. Haig was still alive, we continue to refer
to J. Haig simply as *s. Haig," rather than "W. Haig, as executor of the
Gtcate of J. daly.) Because 3. Haig was atiil alive’ at the time the instant
matter wae considered by the ciresit court, we ales refer co her in the
Giscussion ana live peraon

 

 

 
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the corpus, as mandated by the corpus distribution provision. mM.
Haig apecifically sought a determination as to whether Damon
intended the stirpital root to be set at the level of Damon's:
(2) children; (2) grandchildren; or (3) great-grandchildren.
According to the per stirpes petition, if the stirpital
root is set at the level of Damon’s children, then this produces
two shares, one for the descendants of Samiel Damon and one for
the descendants of Henry Damon, resulting in the same
distribution scheme as income. If the stirpital root is set at
the level of Damon's grandchildren, then this produces five
shares, one for the descendants of Damon’s five grandchildren
(samuel R, Damon, Harriet D. Baldwin, J. Haig, Frances D. Holt,
and Henry £. Damon). And, if the stirpital root is set at the
level of Damon’s great-grandchildren, then this produces eighteen
shares, one for each of Damon’s great-grandchildren or the issue
of any who predeceases trust termination, assuming either that:
(2) the now-living great-grandchildren are still alive at trust
termination and no new great-grandchildren are born or adopted
in; or (2) any great-grandchild now living who dies before trust
termination leaves issue then surviving.’ In addition, M. Haig
also requested the circuit court to award reasonable attorneys’

fees and costs from the corpus of the trust to any beneficiary

 

appearing and rendering assistance in the present matter.

 

7 At the tine M. Haig filed the per stirpes petition, one of Danon‘s
eighteen grandchilaven, Meather D. Sorenson, had already passed away.
However, Sorenson left surviving issue who would take her share by
Tepresentation.

 

 
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In reponee to the per atixpes petition, several of
Damon's descendants asserted three different positions as to
which generation of Damon’s descendants, i.e., Damon's children,
grandchildren, or great-grandchildren, should serve as the
stixpital root for the purpose of distributing the corpus upon
termination of the trust. Four descendants, all descending from
Damon's son Henzy’s line, contended that the stirpital root
should be set at the level of Damon's great-grandchildren.* one
group of descendants, also descending from Damon's son Henry's
line, asserted that the stizpital root should be set at the level

of Damon's grandchildren.” Finally, three groups of descendants,

¢ specifically, the four descendants are: (1) M. Haig: (2) Christoph
D. Haig (C. Haig): (3) Wendy Haig (W. Haig) and (4) J. Maig. M. Haig, -
Haig, and W. aaig are the children of J. Haig. Ae previously atated, J. Haig
ie one of Danon’s grandchildren and is Gne of Henry Danon’s children. On

. 5. Haig and W. Haig (hereinafter, collectively, J. £K. Haig) jointly
‘an Gpening brie?, arguing that the stirpital root
Of Damon's great “grandchi laren.

 

 

jou1d be set at the

     

At the cireult court level, respondente-appellants Brendan D. Nesker and
John P. Danon individually filed'statenents of no position regarding the per
ueirpes petition. On appeal, Brendan D. Meeker snd John P. Damon
Thereinafeer, collectively, Hesker & J. Daron] Jointly filed an opening brief,
contending that the stirpital root should be set at the level of Damon's
great grandchildren. Mesker and J. Danon are the children of Henry B. Damon,
fhe grandchildren of Henry Danon, and the great-grandcaildren Of Damon and,
thus, also descend fron Danon’s gon Henry's line.

 

 

 

‘Therefore, on appeal, the following four groups of respondente-
appellants subaitted that the stirpital root should be set at che level of
Damon's great-grandchildren: (1) M. Haig? (2) C. Haig; (3) J. &. Haig; and
(8) Mesker & J. Damon.

 

* specifically, this group of descendants is comprised of eight
individuals, respondents-appellants: (1) Frances D. Holt; (2) Daniel P. Holts
(3) Allison’. Gendreau; (4) Melanie F.H. Bostock; (S) Harriet D. Saldwin; (6)
Peter D. Beldvin; (7) Sonnet M. Baldwin; and (3) katherine B. Achaval
hereinafter, collectively, Woit ¢ Baldwin Families]. Ae previously stated,
Frances D. Hole and Harriet D. Baldwin are Damon's grandchildren and Henry
children, and their deaths have been suggested on the record by counsel

Daniel F. Wolt, Allison H. Gendreau, and Melanie F.H. Bostock are the legally
adopted children of Frances 5. Holz, “Pater D. Baldwin, Bennet M, Baldwin. and
Katherine B, Achaval are the children of Harriet D. Baldwin:

 

 

 

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all descending from Damon’s son Samuel's line, alleged that the
stirpital root should be set at the level of Damon’s children.\*

on May 24, 2000, the Honorable Virginia Lea Crandall
issued her “Findings of Fact, Conclusions of Law, and Order
Interpreting the Will of Samel Mills Damon as it Relates to
Distribution of Trust Corpus Upon Termination of the Samiel Mille
Damon Trust and Instructing Trustees as to Determination of
stirps” (the May 24, 2000 FOFS, COLS, and Order). Therein, the
circuit court found in favor of the interpretation advocated by
the three groups of descendants descending from Damon's son

Samuel's line, ise., that the stirpital root is to be set at the

 

 

 gpecitically, these three groups of deacendanta, comprising of
twelve individuals, ave respondencs-appellees: (3) Sharon Damon, Siddhartha
Dazon, and Shavana’sorenson (hereinafter, collectively, sharon Damon
Appelices]; (2) Heidi Snow, dulia Snow, and Frank Snow (hereinafter,
Collectively, snow Appellees]; and (3) Samuel E. Danon, Semel Renny Danon,
Pia Spee, Juilo Spee, Miles Spee, and Philip Spee [hereinatter, collectively,
Spee Appellees] -

with respect to sharon Danon Appellees, Sharon Danon is the child of
Samuel R, Damon, the grandchild of Samiel Damon, and the great-grandchild of
Denon. “Shawnna Sorengon se the child of Heather D. Sorenson, Damon's only
Geceaved great-grandchild. eather D. Soreneon and Sharon Damon were #18

   

 

 

 

 

 

with respect to Snow Appellees, Heidi Snow is Shawnna Sorenson's sister
and, thus, e great-great -grandenild of Damon. Julia Snow and Prank Snow are
Reidi Snow's eh! laren.

 

 

And, with respect to Spee Appellees, Samiel £. Dauon is the child of
Samuel R. Danon, the grandchi ia of Samuel ‘Damon, and the great-grandchild of
Denon. “in other words, Samuel 8. Damon, Sharon Denon, and Heather D. Sorenson
were siblings. Senuel Renny Danon and Pia Spee are Samuel B. Danon’e

Children. Julio Spee, Miles Spee, and Philip Spee are Pla Spea’s children,

 

 

 

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level of Damon's children. The circuit court entered the

 

following relevant conclusions’

[3.], The intent of [Damon] with respect to the [corpus] of
the [t]rust, ae again expressed by (the fourth section
of Damon's will], wa that it be distributed upon y
Eermination (which the Suprene Court of Hawaii in
Damon i determined to be at the death of the last
Grendehild of [Bsnen]) £0 all of [ny] sesue who shall
then be living per stirpes and not per capita.” There
{eno ambiguity in the [w]ill as to the intent of
[Danon} Eo avoid a per capita distribution of the
(elrust [corpus]. the direction in [the fourth
section of Damon's will] to distribute sper stizpes
nd not per capita’ precludes any interpretation of
the Tw] ill that would permit the descendants of
[Banon] to take in thelr own Fight rather than by
representation.

[4.] The Hole and Baldwin [F]amilies have argued that this
Goure should *harnonize” the [corpus] distribution
provision with the {w]ill as 4 whole and find that the
Stirpe begin at the level of the grandchildren of
(Dano). The Court is not persuaded by this argument.

15. (W Maigl, (C. Wag), and (J. Maig) have argued that
fhe language of the {w}ill evidences. [bamon’s) intent
Ehat the seixpe for calculating the dissrabution of
the (corpus) of the (e)rust should be found at the
Hirst generations! level at which there are living
{geue who share in the (corpus) distribution. That
would likely result in the stizpe being set at the
evel of [Damon's] great-grandenildcen. This argument
is based in part on (Danon'sl use of different
language in directing disposition of the (corpus)
(Sper stirpes" and among "all of my issue who shall
Chen be Living*) than he used for directing
distribution of incone (by right of representation®
‘anong the issue of ‘named children) and on the theory
that Lf (Deson] had intended the same distribution of
both principal and incose, ne would have Used the same
language in directing their disposition.

(6.] while differing words are indeed used, the Court
Concludes that they do not evidence a difference in
Entent oF meaning. In fact, the Court concludes that
the words "per stirpes" as sed with respect to the
Gistribution of (corpus) and the words “ey right of
Eepresentation" as used with respect to the
Gistribution of net incone wean the sane thing.
[dtecussing cases and citing cases from other
Jurisdictions holding that “per stirpes* means “by
representation”)

(7.1 Gne common method of determining the meaning of “per
stirpes,” in cases where the first takers are

 

 

 

 

 

 

 

 

 

5 the May 24, 2000 F0Fe, CoLs, and Order did not contain any numbering
system for the Cols, “However, each COL was separated into distinct
paragrapis, and we note that cone of the parties on appeal had self-numbered
the Cols at the beginning of every new paragraph. Thus, we did the sane for
ease of discussion

 

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(31

na

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descended trom the prior income takers, 1s to presume
that the (corpus] upon termination will be distributed
in the sane manner se income was distributed prior co
ternination. Despite arguments that (Damon) intended
the incone and [corpus] of the (t]ruet to be
Gigerlbuced ditterently because of different language
Gnd punctuation in the incone aistribution [provisional
and Teorpus) distribution (provision), the Court is
Rot persuaded that any language, punctuation (or lack
thereof) of capitalization in the’ [«) 11] demonstrates
or reflects an intent to treat the distribution of
Corpus aifferentiy from the distribution of incone.
The differing language, capitalization and punctuation
Gited reflect a distinction without a difference

he llawai's Supreme Court used similar reasoning in
rust Est ‘90 Haw (aii) 233, 908 P.2d S61
Tissa)i- a that cae the testator had provided for
Erust income to be distributed co his children. (one
Gaughter and two adopted grandchildren) per stirpee
Gneil sii of then ned died. ‘The corpus was then to be
Sietributed to sehe issue of my saia adopted children
fe shall then be living in equal shares per stirpes.”
The Court held that the stirpital root “begins with
the ancestors of those who are to take and not with
the takers thenselves."" 1d, at 235, 908 P.2d at 563
In reaching ite coneiueion, the Court noted that the
Eeatator "intended distribution of the trust corpus co
Darailel income distribution.” Id. at 238, 908 .24
Bt see

Many courte have wrestled with the seaning of *
atitpes" in wille and have relied on American cas
Thvolving teuste for a testator's ou children to
Getermine the testator’s irsue. Absent very unusual
facts, they almost uniformly find the stirps at che
Generation of testator’ children. (discu:

Horton's Betare, 222 A.24 165 (J

linen’ (Damon) provided in (the fourth
“ill) that the [corpus] of the [E]rust would be
determined in
Damon_I) to “all of sy i I then be Living
Per stirpes,” he [] intended that the stirpe should be
Set at the level of his children.
[ii, Haig] has argued that the new Uniform Probate
Code, Hawai't Revised Statutes (HRS") 55 560 et.
Seq. which becane effective January 1, 1997, provides
the intestacy lav ae the default rule in interpreting
clase gitts. HRS §'560:2-708 follows an intestacy
Schene of distribution for class gifts to issue. HRS
$6 560.2-103 (share of heirs") and 560:2-708 do not.
apply to the class gift herein because (Damon)
Specified the manner of hia intended distribution.
The uniform Probate Code provisions apply only when
the testamentary instrument is eilent as to the manner
of aistribution’

 

   

 

 

   

 

    

 

 

 

 

 

 

(Footnotes omitted.) Finally, the circuit court ordered, inter

alia, that:

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3. For purposes of distribution of the corpus upon
fersination of the [e}rust, the Court finds and
concludes that the stizps are the ancestors of the
Eskers and not the first tekers and that the stirpe
are the childres of (Deron) as. (Danon] i the common
ancestor from whom representation begins.

4. The Trustees are instructed that for purposes of
Giseribution of the corpus upon termination of che
[eirust. the division of the stirpe shall be made at
the level of the children of (Dancnl

   

 

  

 

   

2. The F ring Petition, the Fee Bearing Order, the

Fee Petition, and the Fee Order

    

Shortly after M. Haig filed the per stirpes petition
but prior to the entry of the May 24, 2000 FOFs, COLs, and Order,
trustees/respondents-appellees David M. Haig, Fred C. weyand,

Paul Mullin Ganley, and Walter A. Dods, Jr. (hereinafter,

 

collectively, the trustees] filed a ‘Petition for Court

 

Appointment of Attorneys to Brief the Issues Raised in the Pei

Stizpee Petition and to Have Beneficiaries Pay for the Legal

 

Expenses of Attorneys They Retain” (the fee bearing petition)
with the circuit court on April 22, 1998. Therein, the trustees

ate should not be

 

sought an order determining that Damon's e
required to pay for the beneficiaries’ fees and costs or, in the

to either have the circuit court

 

alternative (2) appoint three

 

attorneys, one to represent the interests of those asserting each
of the three positions on the question of where the stirpital
root should be set; or (2) determine that Damon's estate be
responsible for the reimbursement of only one reasonable fee for

each of the three positions.

on June 26, 1998, the circuit court entered an order

(2) denying with prejudice the trustees’ request for the

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appointment of three attorneys and (2) denying without prejudice
the trustees’ alternative requests that (a) Damon's estate not be
required to pay for the fees and costs of attorneys hired by the
beneficiaries and (b) Danon’s estate be required to pay only one
reasonable fee for each of the three positions (the fee bearing
order).

on June 5, 2000, J. Haig filed a “Petition for Court's
Instructions to the Trustees Regarding Reinbursement of
Attorneys’ Fees and Request for Reimbursement of Attorneys’ Fees
From Trust Funds" (the fee petition) with the circuit court
Therein, J. Haig requested reimbursement of the $124,832.72 in
attorneys’ fees and costs she had incurred in connection with the
per stirpes petition and the fee bearing petition.”

on June 19, 2001, the cixcuit court entered an order
granting in part and denying in part the various requests for
attorneys’ fees and costa by the parties (the fee order). With
respect to J. Haig’ fee petition, the fee order provided in
relevant part:

If 18 ORDERED:

to. spect to [the fee petition], counsel [for J.
Haig) provided ageistance to the Court by providing
Copies of cases from other jurisdictions, addressing
{eeues involving multiple attorneys representing the
same porition, and assisting in resolving the Per
eirpea FOF/COL anong the parties, However, (the fee
tition] contains ao specific declaration or separate
Etatenent from (J. Haig] describing any impact on her
estate planning interest. Throughout the tine sheets,
There are repeated references to telephone calle and

  

 

 

 

    

 

© Many of the respondents-appellante and the respondents-appellees also
filed their om fee petitions; however, none of their fee petitions are at
fesue in this case

 

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letters to IM. Haig), but no indication of
with (J. Haig). In assessing th

Se feea, and whether (Denon’a extate]

the costs of her participation, the Court

   

 
 

Me. (A. Janes) Wriston (J. Haig’s counsel] ro present
two different positions before che coure. [9] This ta

fhe case with the Holt-saldwin Fee Petition, which
Elled by one firm for multiple people ({J. iaigl's
Sisters ang their children) -

Therefore, although (i. Halal ia an income
benefisiaty. ght dose not have standing In this matter

 

igi provided susiatance to th
reinbursenent in th
#15000 to reflect the value provided tothe Court and

So-ibanon’s catatel-

(emphasis added.)
3. dudgnent and Appeal
on Novenber 6, 2001, the circuit court entered a

judgrent, incorporating, inter alia, the May 24, 2000 FOFs, CoLe,
and Order, the fee bearing order, and the fee order (the Novenber
6, 2001 entry of judgment). Appellants timely appealed from the
Novenber 6, 2001 entry of judgment. However, on May 30, 2002,
thie court dismissed the appeals for lack of appellate
jurisdiction inasmuch as the November 6, 2001 entry of judgment
was not certified for appeal pursuant to HRCP Rule 54(b). Txuat.

Created Under the Will of Damon, No. 24740.

on June 21, 2002, the circuit court entered an amended

 

judgnent, again incorporating, inter alia, the May 24, 2000 For.
cots, and order, the fee bearing order, and the fee order,
pursuant to HRCP Rule S4(b) and HPR Rule 34, This timely appeal
followed:

YM, Haig, J. Maigrs son, served as J. Haig’s attorney-in-fact

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TT, STANDARDS OF REVIEW
A. Standing

‘his court reviews a circuit court’s decision regarding
a party's standing de novo under the right/wrong standard. Mott].
w. Miyahiva, 95 Hawai 381, 388, 23 P.3d 716, 723 (2001).
B. Const: fay

‘The conetruction of a testamentary trust is a question
of law which this court reviews de nove under the right/wrong
standard. Damon_I, 76 Hawai'i at 123-24, 869 P.2d at 1342-43
(citation omitted).

hen constrving a trust, this court is guided by
principles relating to the interpretation of truste as well
Rb those relating co the interpretation of wills. A
fundamental rule when construing trusts is that the
[ntention of the settlor as expressed in a trust instrument
shell prevail unless inconsistent with gone positive rule of
Yor. "Additionally, in construing a trust document to
determine the settior’s intent, the instrunent must be read
fas a viole, not in fragnents.

 

 

 

 

¢ Loc! ble L , 109 Hawai'i 146, 151-82, 123
P.3d 1241, 1246-47 (2005) (internal quotation marks and citations
omitted).
IIT. DISCUSSION

Preliminary, we address whether J. Haig had standing to
participate in the matter of the construction of the instant
will. As previously stated, the circuit court concluded in the
fee order that J. Haig lacked standing to participate in the
instant matter, and, thus, her fee petition was denied.
Thereafter, we address the crux of the instant appeal, i.e., the

construction of the corpus distribution provision of the will.

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A. Standing

J. &W. Haig maintain on appeal that the circuit court
erred in determining that J. Haig, a current income beneficiary
of the trust, lacked standing to participate in the instant
matter concerning the distribution of the corpus upon termination
of the trust. J. & W. Haig contend that J. Haig is an
‘interested person” under Hawai'i Revised Statutes (HRS) § 560:1-
201 (Supp. 2004), quoted infra, and, therefore, J. Haig has
standing. In addition, J. & W. Haig argue that J. Haig “has
standing in this matter by virtue of her estate planning interest
in the outcome of the per stirpes petition.” Specifically, J. &
W. Haig assert that the percentage of the corpus J. Haig’s
children will eventually inherit upon termination of the trust
has a “self-evident effect on the amounts that [J. Haig] may wish
to bequeath to them and the amounts she can comfortably bequeath
to others.”

In response, the trustees contend that, in order to

have standing for purposes of the instant matter, J. Haig must

 

ve a property right in, or claim against, Damon’s estate at

iseue in the instant proceeding. The trustees argue that J. Haig

 

-201 inasmuch as (1)

 

is not an interested person under HRS § 56
the per stirpes petition requested a judicial determination
regarding the distribution of the corpus upon termination of the
trust and (2) J. Haig does not stand to inherit any of the

corpus. In response to the trustees’ contentions, J. & W. Haig

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counter that the trustees interpret section §60:1-201 "too
narrowly" and, instead, submit that the section contemplates
“instances where a party who otherwise has no property right in

or claim against an estate may nevertheless be an interested
person for a particular proceeding only.”
HRS § 560:7-201(a) (1993) provides that “(t]he

[probate] court has jurisdiction of proceedings initiated by

trustees and interested persons concerning the internal affairs
of trusts.” (Emphasis added.) In turn, HRS § 560:1-201 defines

“interested person” as

includting) heire, devisees, children, spouses or reciprocal

beneficiaries, creditors, beneficiaries, and any others

having a property right in or claim against a trust estate

Or the eotate of a decedent, ward, oF protected person. It

Gleo includes persone having priority for sppointaent

Personal representative, and ether fiduciaries representing
ed persons. ing ae

 

 

(emphasis added.) This court recently construed the last
sentence in the foregoing definition of interested persons in In

xe_Estate of Campbell, 106 Hawai'i 453, 106 P.3d 1096 (2005).

‘Therein, this court stated that

jentence of the definition does not broaden the

 

 

[ene tas
definitional reach of “interested person." ili
jous che. jetermine, s of party's

ig thus possible that one say be an “intereatea person” for
the purpose of one particular proceeding but not another

 

: ‘An interested person, however, will elwaye possess
an interest in the estate itself.

Id, at 459, 106 P.3d at 1102 (quoting Estate of Thorne, 704 A.2d
315, 218 (Ne. 1997) (brackets omitted)) (some emphases in

original and eome added). In addition, this court also cited to

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In re Estate of Juppier, @1 $.W.3d 699, 701 (No. Ct. App. 2002),

for the proposition that an interested person “only include [s]
those with a financial interest in an estate." In re Estate of
Campbell, 106 Hawai'i at 459, 106 P.3d at 1102 (internal
quotation marks omitted) .

In Estate of Thorne, the natural father of a child (the
child) who was killed in an automobile accident brought a
wrongful death action against the driver and the driver's
employer [hereinafter, collectively, the wrongful death
defendants]. 704 A.2d at 316. The adoptive father of the
child's brother subsequently filed a petition for determination
of the child's heirs. Id, The probate court determined that the
termination of parental rights acted to sever any inheritance
rights that the natural father had in the child’s estate and that
the child's inmediate heirs were his brother and half sister.
Id, at 316-17. Consequently, the wrongful death defendants moved
to intervene in the probate proceedings, seeking reconsideration

heirs. Id, at 317. The

 

of the determination of the child’
probate court denied the wrongful death defendants’ motion. Id.
on appeal, the Supreme Judicial Court of Maine affirmed, noting

that

[eihe determination of (the child's) heirs witl affect on
hose behalf the wrongful death action may be brought and
Consequently may affect the determination of damages in that
action. The sole interest of the [wrongful death
Gefendante] in the decermination of [ehe chile's) heire is
the minimization of the extent of their potential liability
fn the wrongful death action. They sttenpt to serve thie
invereat by advocating the hedrehip righte of the heirs most
Likely to recover the least amount Of damages in the
‘erongful death action. ‘Their interest is not a "property

 

 

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right in or claim against” (the child's) estate. The
(wrongful death defendants] fall cuteide the scope of,
waine's statutory definition of interested persons) ["] and
nek standing se “interested parties” to participate in the
determination of (the child's] heire

   

 

Ida at 321

 

Likewise, in the instant case, J. Haig falls outside

 

the scope of HRS § 560:1-201 and lacks standing as an interested
party to participate in the determination of the residuary
beneficiaries of the trust. The particular purpose of the
instant probate proceeding ie to determine where to place the
stixpital root in order to ascertain the anount each residuary
beneficiary will receive upon termination of the trust. Although
J. Haig is currently an incone beneficiary, she does not have any
interest in Damon's estate that will be affected by this
particular probate proceeding inasmuch as she is merely a
measuring life and not a reeiduary beneficiary. Moreover,
similar to the wrongful death defendants in Estate of Thorne, J.
Haig may have a financial interest in how Damon's estate will
ultimately be distributed; however, her interest is not a
property right in or claim against Damon's estate. Thus, J.
Haig’s interest relative to the instant probate proceeding is
insufficient for her to be considered an interested person.
Accordingly, we hold that the circuit court correctly concluded
that J. Haig lacked standing to participate in the instant

matter.

 

the relevant portion of Maine's statutory definition of interested
persone ie idestical to liawaii's etatutory definition of interested persone.
Bee 16-4 N.Res. § 1-202(20) (1981)

 

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Furthermore, J. & W. Haig also request that this court
remand the issue of J. Haig’s award of attorneys’ fees for
sreconsideration” inasmuch as beneficial value to the trust and
the court, not standing, is the prerequisite for an award of
attorneys’ fees. Stated differently, J. & W. Haig apparently
argue that the circuit court improperly considered J. Haig’s lack
of standing as a factor in reducing the amount of attorneys’ fees
awarded to her. However, based on the transcript of the hearing
on the fee petition, it is apparent that the circuit court did
not, a8 J. & W. Haig claim, reduce the amount of attorneys’ fees
awarded to J. Haig as a result of J. Haig's lack of standing.
Instead, the circuit court awarded J. Haig $35,000 in attorneys’
fees to reflect the beneficial value provided to the trust. The

circuit court stated:

 

And so the Court would make a ~~ I guess lump sum order of
payment in the amount of payment of $35,000 to. (J. Haig)
Tau firm] ae a benefit chee they provided to the Court
notwithstanding generally that she does not have standing on
this particular issue, put to reflect the value to the state
isicl shat was provides

(Emphasis added.) Thus, based on the foregoing, it reasonably

     

 

appeare that the circuit court awarded J. Haig $35,000 in
attorneys’ fees in spite of her lack of standing, not_as a result
of her lack of standing. Accordingly, we decline to remand the
josue of J. Haig's award of attorneys’ fees for reconsideration.
B. Interpretation of Damon’a Will

Ae previously stated, M. Haig, C. Haig, J. & W. Haig,

and Mesker & J. Danon essentially contend that the stirpital root

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should be set at the level of Danon’s great-grandchildren. Holt
& Baldwin Families assert that the stirpital root should be set
at the level of Danon’s grandchildren. And, Sharon Damon
Appellees, Snow Appellees, and Spee Appellees [hereinafter,
collectively, Appellees) maintain that the circuit court
correctly concluded that the stizpital root is set at the level

of Damon's children.

 

Meaning of “Per Stirpes”
©. Haig and J. & W. Haig contend that Damon intended a
‘modified per stirpes” or, in other words, a “per capita with

repr

 

ntation,* distribution of the corpus. Relying heavily
upon the Restatement (First) of Property (First Restatement) and

the R

 

atement (Third) of Property (Third Restatement), they
specifically argue that per stirpes has four different meanings,
to wit: (2) “strict per stixpes;" (2) modified per stirpes or

per capita with repri

 

ntation; (3) “per-capita-with-per-capita

 

representation;

 

and (4) "per-capita-at-each-generation.” Mesker
& J. Damon argue that per atizpes has two distinct meanings, to
wit: (2) “taking by right of representation" and (2) taking
‘collectively by families and not equally as individuals.”
Nonetheless, all three groups of appellants contend that Trust
Estate of Dwiaht, 60 Hawai'i 233, 909 P.2d 562 (1995), which
adopted certain provisions of the Restatement (Second) of
Property (Second Restatement), is inapplicable to the instant

case. Based on the foregoing, C. Haig, J. & W. Haig, and Mesker

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& J. Damon essentially conclude that Damon intended the stirpital
root to be at the generation where there would likely be at least
one living descendant at the time the trust is terminated, ie,
the level of great-grandchildren.

In response, Sharon Damon Appellees contend that the
four “meanings" of per stirpes, as advocated by C. Haig and J. &
W. Haig, are irrelevant because the Third Restatement “addresses
these meanings in the context of intestacy statutes that have

evolved as state legislatures exercise their public policy

 

prerogative, not per stirpes provisions utilized in wills.
Sharon Damon Appellees contend that the cther two definitions of
per stirpes, as advocated by Mesker & J. Damon, are not supported
by any Hawai'i authority, and Mesker & J. Damon neglect Dwight’ s

precise definition of per stirpes. Moreover, Appellees all agree
that this court has already established that per stirpes has one

already resolved the

 

distinct meaning, and, thus, Dwight hi
“Restatement problem,” i.e,, whether Hawai‘i follows the First,
Second, or Third Restatement with respect to the meaning of per

stirpes, by adopting the pertinent provisions of the Second

 

Restatement .

‘This court has recently reaffirmed that

  

 

At de well-eatabiianed that "per stirpea" seans “by or
according to root,” ‘according to or by stock,” or “by right
Of representation,” ive, that the descendante are to take

 

through of ae representatives of = parent. Deight, 60
Hawai 239, 235, 909 P-24 S61, 563 (1995) (citing
Restatement (Second) Property (Donative Transfers) §§ 25.9
and 28-2 (1908)). Moreover, implicit in the phrase le the
Concept that the *root" or “atock” begins with the ancestors
Of those who are to take and not with the takers themselves

ia.

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In xe Lock, 109 Hawai'i at 152-52, 123 P.3d at 1247-48 (some
internal quotation marks, citation, and footnote omitted) (bold
emphases added). In construing a will that was executed in 1926,
this court in Dwight declared that, under a per stirpes

distribution scheme as recognized in Hawai'i,

ey etenent rec initial division to be
and then permits the living descendants in the next .
Generation to succeed to that share

 

rationale £1 nitial divieion inte
shares on the bagis of the number ot clase nesbere Inthe
Hitst ceneration below the settlor 18 that division of the
‘URE corpus should be Kept equal ancna family Lines.

wight, 80 Hawai'i at 236-37, 909 P.2d at 564-55 (citation

omitted) (emphi

 

s added). ‘Thus, In xe Lock and Dwight
acknowledge that, under Hawai'i law, per stirpes has a well-
established and distinct meaning.

As previously mentioned, Damon's corpus distribution

provision states: “[Flor all of my issue[**] who shall then be

 

This court has recently confirmed that the definition of siseuer

 

cwmen the donor of property describes the beneficiaries
thereof ae "iesue’ or “descendants” of a designated person,
the primary meaning of such clase gift term is determined by
Substituting in place of the clase gift term the words
Schilaren’ and ‘ehildren of children’ and ‘children of
children of children,’ ete. of the designated person(.)*
Dwight! 20 await (at 235-36, 909 P.24 ac 563-64)

 

 

 

  

(quot ing’ Restatement (Second) of Prop.: Donative Transfers
425.3 (13% algo 3 Richard R. Powell, Powell on Beal

 

 

Exoparty § 30-09 at 30-107 (2004) ("in a gift to the “issue”
oF Wdestendante’ of @ certain person, these terns are
Understood by reference to the definition and constructional
Toles for the cerm ‘children.’ Thus, the teres sehilaren,”
‘children of childven,’ and ao forth’ are subeeituted for
MGgeue' and. ‘descendants. ’*). Indeed, (t]he term ‘issue, ”
shorn of any and all Judicial constructions and taken in ite
Ordinary and popular sense as used in respect to pedigra
cee ie definitely 2 general term synonymous with
Gnindten, progeny, offapring, descendants, ete.” O'Brien va
(continued.

 

 

  

 

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living per stirpes and not per capita." Inasmuch as Damon
clearly intended a per stirpes distribution rather than a per
capita distribution, the foregoing definition of per stirpes is
applicable to the instant case. In accordance with Dwight that
the stirpital root begins with the ancestors of those who are to
take and not with the takers thenselves, the stirpital root
should not be at the level of Danon’s great-grandchildren, who
are the takers, but rather at the level of Danon’s children, who
are the ancestors of the takers. such an interpretation leads to
an equal division of the corpus anong family lines as, in this
case, between Danon’s son Henry's Line and Damon's son Samuel's
line. Thus, C. Haig, J. & #. Haig, and Mesker & J. Damon's
arguments with respect to the various definitions of per stirpes
and their resulting conclusion that the stirpital root is at the
level of Damon's great-grandchildren is without merit.

©. Haig, Mesker & J, Damon, and M. Haig next contend
that, in 1996, the Hawai'i legislature rejected Dwight’s reliance

on the Second Restatement with respect to the interpretation of a

 

class gift to issue. According to these appellants, the 1996

 

amendments to Hawaii's probate code adhere to the interpretation
of the Firat Restatement rather than the Second Restatement, and,

thus, the circuit court’s reliance on Dwight was incorrect.

 

3 (.. .continued)
Walker, 35 Haw. 104, 109 (2939).

Inthe Matter of Medeiros Testamentary Trust_and_Lite Ine. Trust, 105 Hawai'i
2ea, 290, 964 P-3 1098, T104 (2008) (some brackets in original).

 

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Specifically, Mesker & J. Danon argue that HRS § 560:2-708 (supp.
2004), quoted infra, relating to class gifts to issue, rejects
Duight’s reliance on the Second Restatement inasmuch as HRS

§ 560:2-708 is based on the First Restatement.

However, Appellees point out that C. Haig and M. Haig
do not cite to any of the 1996 amendments to Hawaii's probate
code to support their contention that Dwight is no longer
controlling precedent. Snow Appellees contend that HRS § 560:2-
708 applies only if the class gift to issue does not specify the
manner in which the property is to be distributed. Snow
Appellees maintain that, inasmuch as Danon’s will “states that
the distribution is to be made to the living issue ‘per stirpes
and not per capita,’ the [w]ill’s class gift specifies the manner
of distribution, thereby avoiding classification as a failed

class gift." Moreover, Appellees contend that C. Haig, Mesker &

 

J. Damon, and M. Haig fail to mention that HRS § 560:2-709 (Supp.
2004), quoted infra, although not retroactively applicable to the
instant case, defines per stirpes in a manner consistent with
Dwight, and, thus, Dwight remains controlling precedent.
HRS § $60:2-708 provides that:

 

If a clage gift in favor of “descendants”, "issue", oF
Shelves of the body" dose not specify the tanner in which the

the
Property is distributes among the class nesbers who are
[iving when the interest ie fo take effect in possession or
enjoyment, in such shares aa they would receive, under the
applicable law of intestate succescion, if the designated
Ancestor had then died intestate owning the subject matter
of the class gift

 

 

 

 

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(Bmphasis added.) According to the plain language of section
560:2-708, if a class gift to issue does not specify the manner
of distribution, then the applicable law of intestate succession
would apply. Here, however, even assuming axquendo that section
560:2-708 is retroactively applicable to the trust's corpus

distribution provision, Damon expressly specified the manner of
distribution, i.e., "per stirpes and not per capita,” and, thus,

the law of intestate succession is inapplicable to the instant

  

case. Inasmich as section 560:2-708 does not apply to the

inatant class gift, Dwight renains controlling precedent.

Moreover, HRS § 560:2-709 provides in relevant part

that

(c) Per stirpes. If a governing instrunent executed
atter January 1, 1957 calle for property to be distributed
Sper stirpes,” erty is divided into as manv equal

Ti) gurvivisg children of the desiqnated ancestor, and

(2)

Each surviving chila, if any, is allocated
‘The share of each deceased child with surviving dea
[eaivided in the ame manner, with subdivision repeating at
each succeeding generation until the property ie fully
‘Sllocated anong surviving descendante:

    

(Emphases added.) We note that section 560:2-709(c) expressly
states that it applies to instruments executed after January 1,
1997 and, therefore, would not apply to the instant case inasmuch

as Damon executed hie will in 1914. Nonetheless, section 560:2-

 

\ ke note that, although C. Haig and Mesker & J. Damon both argue that
the wavai't legislature rejected the applicability of Dwight, they take
Inconsistent positions with respect to whether Danon specified a manner of
Gistripution ia his crust. Alchough Nesker & J. Damon contend that, von the
face of the actual words used by Danon, there ig a failure to ‘specify the
henner in which the property is to be distributed anong the class sembers ,]'*
©. Haig states that Donon described the distribution of his corpus "in a
Specified nanner ("per stirpes and not per capita’l-"

 

   

 

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709(c) defines per atizpes in a manner consistent with Dwight.
As previously stated, Dwight provided that, under a per stirpes
distribution scheme, “the [Second] Restatement requires the
initial division to be in the first generation, whether or not

there is a survivor, and then permits the living descendants in

 

the next generation to succeed to that share.* 80 Hawai'i at
236, 909 P.2d at S64 (citation omitted). Similarly, section
560:2-709(c) provides that the initial division of property is to
be at the level of the designated ancestor's children, ice., the
first generation, regardless of whether or not there is a
survivor, as long as any deceased child left surviving
descendants. Indeed, the coment to section 2-709 of the Revised
uniform Probate Code (UPC)*” confirms this interpretation:

Subsection (c)’s definition of "per stixpes* accords with
the predominant understanding of the term. In 1993, the
phrase “if any" wae added to subsection (c) to clarify the
point that, under per atirpes, the initial division of the
Rotate is nade at the ehilared generation even if no child
muxvives the ancestor.

unif. Probate Code § 2-709 cmt. (amended 1993) (emphasis added) .

 

‘Thus, the appellante’ contention that the 1996 amendments to
Hawaii's probate code overruled Dwight is not supported by any
statutory language and ignores HRS § 560:2-709(c), which confirms
Duight's definition of per stirpes. Accordingly, we hold that
the circuit court correctly concluded that the 1996 amendments to

Hawaii's probate code are not applicable to the instant case.

° HRS § 560:2-709(c) ie taken verbatim from section 2-703(c) of the
Revised uPe.

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2. Comparigon of the Income and Corpus Distribution
Provisions
M. Haig, C. Haig, J. & W. Haig, and Mesker & J. Damon
contend that the circuit court incorrectly presumed that the
corpus of the trust will be distributed in the same manner as
income has been distributed. They allege that “[oJnly if
identical treatment of incone and corpus distribution appears to
be called for in the will can courts infer a similar intent
regarding both distributions." These appellants’ arguments can
be summarized by the following passage:
‘The “glaring’ difference between the two provisions
refutes any assumption thet Damon intendea his bald and
Unadorned use of “per atirpea” in the corpus provision to
have s meaning identical to the “by right of representation”
pattern which he seticulously and repeatedly articulated for
Glstribution of the truge income. Rather, By abandoning the
“oy Fight of representation" language he fad earlier used to
delineate incone distribution in favor of the term “per

Stirpes" for ene corpus, Damon evidenced an intent that
corpus would be treated differently.

 

 

Appellees contend that the terms “per stirpes* and “by right of
representation” are considered synonymous under Dwight. -
Moreover, Appellees allege that Daon I's employment of the
phrase ‘income to my issue per atixpes* to describe the income
@istribution provision is further support for the notion that "by
representation’ and “per stirpes* mean the sane thing. Finally,
Sharon Damon Appellees state that “the law in Hawai'i clearly
allows ‘sufficient grounds for presuming’ that a corpus scheme
follows a similarly worded income schene.*

As previously mentioned, “it is well-established that

‘per stirpes’ means ‘by cr according to root,’ ‘according to or

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by stock,’ or ‘by right of representation,’ i.e., that the

 

descendants are to take through or as representatives of a
parent.” In re Lock, 109 Hawai'i at 152-53, 223 P.3d at 1247-48
(some internal quotation marks, citation, and footnote omitted)
(bold enphases added). Thus, In re Lock clearly reaffirms
wight’s proposition that “per stirpes" means “by right of
representation.” Moreover, other jurisdictions have also held
that “per stirpes’ and “by right of representation” mean the same
thing. See Lombardi v. Blois, 40 Cal. Rptr. 899, 911 (cal. ct.
App. 1965) (**Per stirpes’ and ‘by right of representation’ mean
the same thing[.]* (Citations onitted.}); Johnson v. Huntley,
236 P.2d 776, 778 (Wash, 1951) (noting that, *{iJn the law of
descent and distribution, ‘taking by representation’ means taking

* (citations omitted) ).

 

‘per stirpe

In this case, Damon's income distribution provision

 

widow,

 

essentially provided that, after the death of Daron’
income is to be distributed equally among the four branches of
Damon's descendants, that is, each of Damon's four children are
to take a one-quarter share of the net income and, upon the death

of each child, their issue to take “in succession by right of

 

representation.” In other words, income is to be distributed to
Damon's issue by right of representation, and, indeed, income has
been distributed in this manner since the death of Damon's widow.
Presently, income is distributed equally between the two branches

of Danon’s descendants, one share to Damon’s son Henry's line and

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one share to Damon's son Samiel’s line, inasmuch ae Henry and
Samuel were the only two children that left surviving issue. on
the other hand, Damon’s corpus distribution provision simply
provided that corpus is to be distributed to “all of my issue who
shall then be living per stirpes and not per capita." In other
words, the corpus is to be distributed to Danon’s issue per
stixpes. Inasmuch as per stirpes means by right of
representation, income and corpus are to be distributed in the
same manner, i.e,, to Damon's issue by right of representation or
per stizpes. Indeed, in Dason I, this court characterized
pamon’s income distribution provision as simply “the income to my
[(Damon's)] issue per stirpes," thus, essentially expressing the
view that per stizpes and by right of representation mean the
same thing. 76 Hawai'i at 123, 869 P.2d at 1342. Likewise, the
appellants’ contention that a corpus distribution provision can
be treated similarly only if it contains identical language as
the incone distribution provision is without merit in this case,

inasmuch as Damon employed similar language in the two

 

provisions, to wit, per stizpes and by right of representation.
See Matter of Lopez, 64 Haw. 44, 59, 636 P.2d 731, 741 (2981)
(noting that, if a settlor of a trust wanted income and corpus
distribution to be treated the same, he “naturally would have
used similar language”). Thus, the “glaring” distinction between

the income and corpus distribution provisions is essentially, as

 

the eireuit court noted, *a distinction without a differenc:

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See COL No. 7. Accordingly, we hold that the circuit court
correctly concluded that the corpus, upon termination of the
trust, will be distributed in the same manner as income has been
distributed and that, therefore, the stirpital root is set at the
level of Damon's children.
Grammatical Analysis of Damon’s Will

M. Haig, C. Haig, Mesker & J. Damon, and Holt & Baldwin
Families contend that Damon's capitalization of the word “And” at
the start of the corpus distribution provision indicates Damon's
intent to treat income and corpus differently. Appellees
essentially contend that Damon's intent should not be controlled
by punctuation or capitalization. In addition, Spee Appellees
allege that “[nlone of the [a]ppellants point to how the
capitalization supports their respective contentions.”

‘This court has previously stated that:

‘The intention of the testator 2s expressed in his will is
hot controlled by the punctuation therein and such
punctuation may be disregarded where it conflicts with the
Manifest intention of the testator and by so doing the
Seeing of the will ie made more obvious’

 

In_re Deering's Estate, 29 Haw. 854, 861 (1927) (internal
quotation marke and citation omitted). Other jurisdictions have

similarly applied the foregoing analysis to the interpretation of
the use of capitalization in wills and trusts as well. See
Wilson vy. Witt, 112 So. 222, 224 (Ala. 1927) ("The natural sense
in which words are used, as it appears from judicial inspection,
prevails over punctuation and capitals{.]*) (citations and
internal quotation marks omitted); Home for Incurables of

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Baltimore City v, Bruff, 153 A. 403, 412 (Md. 1991) (noting that
‘the meaning will not be controlled by punctuation or
capitalization, if the intention of the testat {or} can otherwise
be ascertained"); Winkel v, Streicher, 295 $.W.2d 56, 59 (Mo.
1956) (also noting that “rhe natural sense in which words are
used . . . prevails over both punctuation and capitals”)
(citation and internal quotation marks omitted)

In the instant case, the capitalization of the word
sand? does not indicate an intent to treat incone and corpus
Gistribution differently." Danon’s intention as expressed in
his will should not be controlled by @ lone capitalized word
inasmich as a sound and reasonable construction of hie will
clearly supports the conclusion that incone and corpus are to be
distributed similarly. Moreover, the word “and” is “not
correctly or generally used to express an alternative, unless
followed by words which clearly indicate that intent." In re
Parant’s Will, 240 N.¥.S.24 558, 561 (N.Y. Sur. 1963) (citation
omitted). Here, the appellants are essentially proposing that
the income and the corpus distribution provieions follow two

entirely different distribution schemes. However, Damon’s use of

 

4 ag previously mentioned, the corpus distribution provision
contained in'ehe fourth section of the Will (gee aupra at 6-9) and atat

 

_ And on the death of the last survivor of all of ay
children and grandchildren who shall be living at the time
Of ny death my trustees shall hold all of my said property
of every description nature ox kind whatsoever and

Wherescever the sane may be IN TRUST for all of my isi
Shall chen be living peF stirpes and not per capital]

le who

 

 

(Bold enphaaie added.)

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the word “and” was not followed by words which clearly indicate
such an intent. Thus, we believe that Damon did not employ the
word “and” to express alternative, or different, distribution
schemes for income and corpus. Accordingly, we hold that the
circuit court did not err when it concluded that Damon's use of
capitalization did not demonstrate or reflect an intent to treat
the distribution of corpus differently from the distribution of
income.

4. Holt & Baldwin Families’ Contention that a General
Testamentary Plan Exists in Damon's Will that Focuses
on Grandchildren
Holt & Baldwin Families assert that "Damon’s ‘per

stirpes’ direction should, consistent with his intent
harmoniously indicated by all the language of his will, his
general testamentary plan, and his surrounding personal
circumstances, be construed to require division according to hie
grandchildren." Holt & Baldwin Families allege the following as
Damon‘a testamentary plan:

(Damon) created hie (tiruet to p
for Glstribution to his later descendants at some distant
point long after [Damon's children’s] deaths. After
Phoosiag to delay distribution to this point, ir is only
that he would lock to the generation of Likely first
the stirpes to better spread hie estate among
these later descendants. Under the terns of his (T]rust and
hie circumstances, chat generation would be his
grandehi laren’ s generation

seve most of his

    

   

   

(Footnote omitted.) Sharon Damon Appellees contend that Holt &
Baldwin Families “engage in various forms of speculation
regarding Damon's intent." Sharon Damon Appellees point out that

Holt & Baldwin Families’ "general testamentary plan” has “no

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basis in the [w]ill” inasmuch as this group of appellants does
not point to any language in the will that Damon intended for an
equalization of corpus anong his grandchildren and later
descendants. M. Haig, C. Haig, and J. & W. Haig contend that
there is no language in the will that supports a “uniform
testamentary plan” favoring Damon's grandchildren.

In Pamon I, this court had cautioned against the use of
speculation or conjecture in determining the testator’s intent:

‘the appellees contend that when Danon wrote his will in
ola, eight years after this court held in

Brom, le Haw. 52 (1906) ,] that a testamentary trast that
war £9 continue “for as long a period ae is legally
Potsible dia not violate the (rule against perpetuitiee),
he may have believed that in the absence of = specific
termination date the court would automatically allow the
trust to continue as long ag legally possible. This
Contention, however, is purely spectlative and not based on
Say. language contained in the will. Because wo "are co

   

   

 

stator. and to eather It nol

ag 0 what the testator may have intended. put by a sound:

‘and reasonable construction of the words shich he has used,
Ga.) at 70 (citation omitted) , a constraction of the will
Fequiring us £0 find that Damon intendea for the trust to
continue "as long as legally possible" cannot be considered
| reasonable construction

   

Damon I, 76 Hawai'i at 127, 869 P.2d at 1346 (emphasis added)
(some brackets omitted), Likewise, in the instant matter, a

ound and reasonable construction of the words Damon used in his

 

will do not support Holt & Baldwin Families’ contention that
Damon had a general testanentary plan favoring his grandchildren.
on the contrary, Damon's incone distribution provision places an
emphasis on maintaining equal distribution of income anong his

children’s families, with Danon’s children as the stirpital root,

not Damon's grandchildren. Indeed, Holt & Baldwin Families’

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allegation that it would be ‘only natural that [Damen} would look
to the generation of likely firet takers as the stizpes to better
spread his estate anong these later descendants" is purely
speculative and not based on any language contained in the will.
Thus, based on the foregoing, Holt & Baldwin Families’
contentions are without merit. Accordingly, we hold that the
circuit court correctly rejected Holt & Baldwin Families’
argunents that the corpus distribution provision should be
vharmonized" with the will and that the stirpital root begins at
the level of Dason’s grandchildren.

5. Law of Intestate Succession

Finally, M. Haig argues that the circuit court erred
when it concluded that Hawaii's intestacy law did not apply to
the corpus distribution provision inasmuch as Danon failed to
direct that there ever be a corpus distribution, and, thus,
Damon's will is silent as to the disposition of corpus at
termination. Consequently, M. Haig maintains that Damon’ will
fails to completely dispose of hia property and that, therefore,
Hawaii's intestacy statute governs the distribution of the failed
gift.

Sharon Damon Appellees counter that M. Haig’s
contention that Danon died partially intestate ignores this
court's long-standing presumption against partial intestacy.
Sharon Damon Appellees assert that M. Haig’s argument “ignores

the language of Damon's [w}ill requiring that the [t]rust be

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distributed ‘for all of my issue who shall then be living per
stipes and not per capita,’ a clear description of the class
members to receive corpus.” Both Snow Appellees and Spee
appellees also contend that Hawaii's intestacy statute should not
apply to the corpus distribution provision because Damon
expressly provided a manner of distribution as this court already
recognized in Damon I.

Im Panon I, this court recognized that:

anon directed that upon the death of the last
measuring life the property be held only for hie vissue who
Shall then be living." On ite face, that language limite
the beneficiaries to persons alive at that tise and excludes
any isaue born after the death of the last measuring life
By precisely defining the beneficiaries as those issue
Living at the tine of the death of the

placing no limite on the duration of thel
Beneficiaries, and failing to specify any subsequent
Beneficiaries, Damon's instructiona appear to direct
transfer of the estate in trust for the epecified
beneficiaries absolutely,

   

 

 

76 Hawai'i at 125, 869 P.2d at 1344 (citation omitted). Based on
the foregoing and viewing Damon’s will as a whole, Damon I held

that there were “strong indications that Damon intended that the
trust terminate upon the death of the last measuring life. Id.
at 126, 869 P.2d at 1345

Given the holding in Damon I, it is difficult to
comprehend that M. Haig continues to adhere to the notion that
Damon’s will is “silent” as to whether he ever intended a
distribution of the corpus. Nevertheless, as previously stated,
Damon expressly specified the manner of distribution, i.e., “per
stirpes and not per capita,” and, thus, the law of intestate

succession is inapplicable to the instant case, Moreover, the

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contention that Danon’s will fails to completely dispose of his
property is contrary to Hawaii’s public policy that “the law
abhors intestacy and presumes against it,” Matter of Tkuta‘a
Eetate, 64 Haw. 236, 245, 639 P.2d 400, 406 (1981) (internal
quotation marks and citation omitted), inasmuch as there is
language in Damon's will that expressly provides for a manner of
Gistribution. Accordingly, we hold that the circuit court
correctly concluded that the intestacy laws of Hawai'i are
inapplicable to the instant case.”

IV. CONCLUSION
Based on the foregoing, we affirm the circuit court’s

June 21, 2002 amended judgment in favor of Appellees.

on the brief:

gamed 6. ay BtaePlehrinen~

fino ¢. teong) and
Gregory Wek chee (of
Taylors Leong & chee), Dre Cn miler

for petitioner-appellant

eee ene Ts EN

 

A, James Weiston, Jr.,
Ronda K. Kent, and Aaron
M. Shumway (of Ashford &
Wriston), for respondents-
appellante Joan Haig and
Wendy Haig

 

 

& appeliees algo raise on appeal that M. Haig is judicially estopped
from arguing that? (1) income and corpus should be distributed ditferentiy;
(2) the corpus distribution provieion does not provide for distribution of the
‘ist; ana (3) Danone will ig ambiguous as to which generation should serve
Sethe stixpital root. “Appellees contend chat inasmich as M. Haig tak
Inconsistent positions in ganon { and in the present appeal, M. Haig hae
SBlown Rot ane cold" Guring the course of litigating the interpretation of
Danone will. However, inasmuch as many of the appellants raise similar and
Ouerleppiog argumenta on appeal, this court need not address this issue.

     

 

 

 

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John L. McDermott, for
respondent -appellant
Christopher Damon Haig

Daniel H. Case, Steven L.
Rinesmith, Frank T.
Kanemiteu, and Cathy L.
Takase (of Case Bigelow &
Lombardi) and Robert E.
Rowland (of Mancini,
Rowland & Welch), for
respondenta-appellante
Harriet D. Baldwin, Peter
D. Baldwin, Bennet M.
Baldwin, Katherine B.
Achaval, Frances D. Holt,
Daniel F. Holt, Allison #.
Gendreau, and Melanie F. it
Bostock

James #. Wright, for
respondénts-appellants
Brendan Damon Mesker and
John P. Damon

Anthony S. Chan and
Shawn B. Thompson (of Thompson

& Chan) for respondents-appellees
Heidi Ann Snow, Julia Ann Snow,
and Frank Edvard Snow

Warren Price, IIT, Sharon R.
Himeno, Robert A.'Marks, and
Robert M. Kohn (of Price Okamoto
Himeno & Lum), William H,
Soskin, pro hac vice, and

Scott N. Carter, pro hac vice,
for respondents-appellees Sharon
Damon, Siddhartha Damon, and
Shawnna Sorenson

 

Mervyn $. Gerson, Alan J. Ma,
Bruce D. Hieneman, and Kristie
K. Cruz Chang (of Gerson &
Hieneman), for respondents-
appellees Samuel E. Damon,
Samuel Renny Damon, Pia Damon
Spee, Julio Damon Spee, Miles
Samuel Spee, and Philip Edward
Spee

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3. Thomas Van Winkle, Katherine
G. Leonard, and Eric S. T. Yong
(of Carlemith Ball), for trustees/
respondents-appellees David M.
Haig, Pred C. Weyand, Paul Mullin
Ganley, and Walter A. Dods, dr

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