### IN THE COURT OF APP EALS OF TENNESS EE AT NAS HVILLE Marc h 16 , 200 4 S es sio n LAN I THOM AS AR NOL D and AM ES D AV IS, Ad m inistrator of t he Est ate

of M ar y R ee ve s D avi s v. W. TE R R Y D A V IS
A Dire ct A ppeal f

romthe P robate C ourt for Davidson County No. 00P 537 The Hon orable F rank G. Clem ent, Jr., Judge

No. M2003- 00620-COA-R 3-CV - F iled Jun e 17, 2004

This case involves the interpre tation of ce rtain provisions of a Tr ust I n s t ru ment. The trial co u rtfo u n da l at en tam b i gu i t y i n t h e In s tru m en t , al l o we d ex tri n s i c ev i d en ce , an d gra n t ed Ap p el l ee 's Mo tio n f or Sum mary

Judg me nt. Ap pe llant a

pp e a ls. We a ff

irm. Tenn. R. App . P . 3; Appeal as of Right; Judgme nt of th e P robate C ourt Aff irm ed W. F RAN K C RAW FORD , P.J ., W.S ., delivere d the opinion of the court, in which D AVI D R. F ARMER , J . and H OL L Y M. K I RBY , J ., joined. Gr e g ory H. Oa kle y a ndDanie l W. Sm a ll o f N a sh vil le fo r A pp e llant, W. T e rry Da vis Am e s D a vis a ndSa lly

B . B un tinof

Na sh vil le fo r A pp e lle e s, L a ni Th oma s Arno ld andAm e s D a vis , Ad min ist rator of theEs tate of

Ma ry Re e ve s D a vis
R. H ortonFrank

I I I of Na sh vil le fo r A pp e lle e , L a ni T ho ma s A rn old

OP IN ION This case involves the interpre tation of ce rtain provisi ons of a trust instrument. The tria l court found a

latent ambig uity in the i nstrument, allowed ex trinsic evidenc e, and g rante d Appellee ’s Motion for Summary

J udg ment. Appellant appeals. W e af firm but with the added pr ovision that the parag raph of the t rust instrument, under which Appellant claims, is a testamentary dispositi on, which fails to comport with the requireme nts of T.C.A. § 32-1-104 ( 2001).
Ma ry Re e ve s D a vis (“ Mr s. Da vis ,” or “ De c e de nt” ) i s th e wi do w o f the late c ou ntry mus ic star, Ji m Reeves. W. Terry Davis (“ Mr. Davis,” or “A ppellant”) is Mrs. Davi s ’s s econd husband a nd , at th e tim e of

he r d e a th, the y

ha d b e e n ma

rrie d f or so me tw e nty -f

ivey e ars . OnJune 24 , 1 99 6, Mr . D a vis , a s h old e r o f a Du ra blePow e r o f A tto rn e y

e xecu ted by Mr s. Davis on May

25, 1996, neg otiated an a g ree ment under w hich Mrs. Da vis sold all o f h er real pr op e rty fo r $ 3. 8 mi lli on to U nit e d Sh ow s of Ame ri c a (“ Un ite d Show s” ) andso ld all o f h e r p ro pe rtyM rs . D a v is is n o t a p a rty to this A g re e m e n t. M r. D a v is sign e d the A g re e m e n t i n d ivid u a lly a n d no t o n b e h a lf 1

o f M rs. D av i s.
P r i or t o t he Jul y 11 , 19 96 T r us t , M r s . D avi s exe cut ed anot her t r us t on A pri l 25 , 19 96

. T hi s “ f i r s t t r us t ” wa s 2

r ev ok ed on M ay 25, 1996. -2- re late d to Jim Re e ve s E nte rp ri se s ( wh ic h s he ow ne d a s so le le g a te e of he r l a te hu sb a nd , Jim Re e ve s) fo r $ 3. 5 mi lli on to U nit e d Show s. Con c e rn ing wh e re the mon ie s fr om the Un ite d Show s sale wo uld g o, Mr . Da vis e nte re d in to an a g re e me nt ( the“ Ag re e me nt” ) w ithW.D . Wh ite , th e br oth e r o f M rs . Da vis

. Th is A g re e me nt, date d Jun e 28 , 1 99 6, pr ov ide s, in r e le vant p art , a s f oll ow s: 1
1. Terry

Davis ag ree s to establish an Irre vocable Trust to provide for the immediate and life -long persona l and health-c are needs of Mary Re e ve s D a vis

. * * * 4. The primary

purpose of

the Trust shall be to provide for the imm e diate , a nd lif

e -l on g pe rs on a l ne e ds of Ma ry Re e ve s D a vis , at a standard c ommensurate with the life-sty le she has bee n acc ustomed to enjoy ing; and to provide for her he alth-ca re a s medically

indicated. 5. A seco n d ar y

purpose of

the Trust shall be to per petuate the memory of t he late J im Reeve s, by providing for the maintenanc e of theJim Re e ve s b uria l si te a nd mon ume nt n e ar C artha g e , Pano la Cou nty , T e xas. * * * 7. The monies for

establishing the Trust shall be fifty perc ent (50%) of the funds paid by

United S h o ws of America...f or the prope rties held by Mary Re ev es Davis and/or Ma ry Reeve s Davis and Te rry Davis, in the amount of ap p ro x imately 7.3 milli on dollars ($7,300,000.00). The se funds shall be paid direc tly to the Trust by thepu rc ha se rs of

the se pr op e rtie s. 8. I n the event that Terry

Davis is living at the time of Mary Reeve s Da vis ’ d e a th, theTr

us t sh a ll b e c los e d andthea sse ts t rans fe rr e d to Mary Reeve s Davis’ husband. OnJuly 11 , 1 99 6, Mr s. Da vis sig ne d a do c ume nt titl e d “ Tr

us t Ind e ntu reMa

ry Re e ve s Davis Inter-V ivos Trust” (the “ Trust”). The Tr ust was pre pare d by

Carrol D. Kilgor e, the 2 a tto rn e y wh o r e pr e se nte d M rs . D a vis a ndpr ov ide s, in p e rtine nt p art , a s f oll ow s: III

.The Agr ee m entre fer s to tha t en te re d b e tw e e n M r. D a v is a n d M r. W h ite, see sup ra . 3
In the p rec ed i ng d raft s o f t he T rust Inst rum en t , A rti cle III ¶2 rea d as fo l l o w s: 4
(2) A f

t er es crow i ng fu n d s fo r t axes as afo res ai d , t he T rus t ee shal l s egregat e and hol d i n t r us t un der t hi s i ns t r ument my hal f of t he procee ds of ea ch s uch pay ment as c o n te m p la te d b y The Agr ee m ent
. T he T rus t ee shal l t hen p ay t o m y husb a n d , W. T E R R Y D A V IS , his h a lf if it d e te rm ine s tha t The Agr ee m entt og e t h e r w i t h my p o wer o f at t o rney grant ed hi m o n M ay 2 5 , 19 9 6 , vest s hi m wi t h l egal ent i t l em ent t o s uch s har e. I f

i t det er mi nes t hat s uch do es not ves t hi m wi t h s uch owner s hi p t hen I n ow AFFI RM / D O N O T AFFI RM

______________________________ [D el et e O ne] M A R Y R E E V E S D A V IS s uch gi f t

. I f I af f i r m s uch gi f

t , my T r us t ee s hal l honor i t upon r ece i pt of a w r i t t en c e rtifi c a tio n b y m y p h ysic ia n , RI CHARD M ARGOL I N, M . D. , of h i s c on cl u s i on , o n the b a sis o f ap p ro p ria te tes ting , t h a t I ha v e the p re se n t m e n ta l c o m p e te n c e to m ake such gi f

t in vi ew o f

(a) m y long and ha p p y m arri age t o the d o nee and (b ) t he a m o u n t o f t h e gift. -3- * * * (2 ) A ft e r e sc ro wi ng fu nd s f or taxes a s a for esai d, theTr us te e sh a ll seg reg ate and hold in trust under this inst rument m y half of the p r o c e e d s o f e a c h s u c h p a ym e n t a s c o n t e m p l a t e db y The Agreem ent , 3 and then pay

to my husband, W. TER RY DA VI S , h is h a lf if it [s ic ]. 4
* * *
I V. Th is T rust sh a ll t e rm inate up on my de a th andit s ha ll there upon be th e d u t y of the Tr ustee, subjec t to the payment of any fiduciary income taxes that may be an obligation of the Trust, to pay all trust corpus and a ccr

ued income to the a dminist rator or executor of my e state su bje c t to thepr ov isi on s he re ina ft e r c on ta ine d that sh a ll be applica

ble in the eve nt that I

shall s u rvive my

husband, W. TER RY DA VI S

. The dispositi on of the assets in my estate sha ll be a s d e te rmine d by

thePr ob a te Cou rt

in a c c or danc e wi th any

va lidwi lls and codic ils Imay

here to fore or her eaf

ter ha ve executed, de bt ob lig a tio n in str

ume nts a nda ny othe r v a lidle g a l in str ume nts here tofore or

here afte r executed by

me. V.
I n the eve nt I

shall prede cea se my

husband, W . TERRY DA VI S , th e T ru s te e , s u b

je c t to s u c h f

id u c ia ry tax li ab il itie s as may be imposed upon it may

make distribution to W. TER RY DA VI S inA ltho u g h the “o v e rr id in g l a n g u a g e ,” a s s e t o u t sup ra at no t e 4 wa s d eleted f ro m t he f

i na l d raft o f

t he t rust 5 ins tru m e n t, this r e fer e n c e to tha t “o v e rr id ing lan g u a g e ” w a s le ft in h e re a t A rtic le V

.

B y amendment dat ed Jul y 25, 199 6, M r s . D avi s ’ s CP A , C ha rles Y oung , was s ubs t i t ut ed for M r . D avi s as 6 tru ste e o f t h e T ru st.

U n i t ed Sh ows w as di s mi s s ed f r om t h i s s u i t by O r der of J an u ar y 15, 1998. 7

Ar n ol d w as a l l owe d t o f i l e a “ Se con d Amen ded an d Su ppl eme n t al Pet i t i on for Appoi n t men t of Cons er v at or 8 and t o Set Asi de T r ans fer of P r op er t y ” on O ct ob er 5, 200 1. T hi s s econd amended pet i t i on r ef l ect ed ev ent s t hat ha d t ake n pl ac e s i n ce t h e f

i r s t Amen ded Pet i t i on w as f i l ed. -4- acc ordanc e with the provisions of par ag raph 8 of The Ag re e me nt, s u b j e c tt o t h e o v e rr i d i n g i n s tru c t i o n s o f A r t i c l e III , ¶ 2 h e r e o f

. If 5 pa y me n t d ir e c tl y

to my h u s b a n db e n o t a

u th o r iz e dth e r e b y , such m o n e y s s h a l l b e p a i d i n t o m y e s t a t e i n a c c o r d a n c e w i th A rt i c l e IV here of. 6
OnAu g us t 28 , 1 99 6, L a ni T ho ma s A rn old(“ Arno ld, ” or “ Ap pe lle e ” ), a

nie c e of Jim Reeve s, filed a “ Petition for Appointment of Conservator and Orde r to Show Cause,” in whic h Arno ld alle g e d th a t Mr s. Da vis wa s in c omp e te nt andso ug ht t o e njo in the sa le of a ll o f M rs . Da vis ’s a sse ts t o U nit e d Sh ow s u nd e r the a g re e me nt n e g oti a te d b y Mr . D a vis be tw e e n M rs . Davis and U nited Shows. On Dec ember

20, 1996, the trial court appointed a g uardian ad litem for Mrs. D avis. On J anuary 14, 1997, the g uardian ad litem filed a “ Preliminary Report,” in which herec ommended that a conse rvator beappointed for Mrs. Davis base d upon her pr esent menta l and phy sical impairments. On J anuary

17, 1997, Arnold filed he r “F irst Amended Petition for Appointment of Con se rv a tor

a ndOr de r t o Sh ow Caus e ” (the “ Am e nd e d Pe tit ion ” ), namin g Mr . D a vis , M rs . Davis and U nited Shows as Respondents. The Ame nded Petition alleg ed that Mrs. Da vis was 7 incompetent to establish the Trust, and ag ain alleg ed that the sa le of he r asse ts to United Shows was not in her be st interest. By Orde r of January

23, 1997, Mrs. Davis’s br other, W.D. Whit e, 8 was a ppointed temporary

conservator. On June 28, 1997, W.D. W hite died. Upon his “Motion to I nterve ne and to be Appointed Conservator,” the tria l court, on Aug ust 25, 1997, appointed Mrs. Davis’s ne phew, the Re vere nd Dr. Willi am H. White of Dallas, Te x as, to ac t as Conservator

“ of thepe rs on a ndthee state of Ma ry Re e ve s D a vis .” Th e c ou rt ins truc te d M r. Whit e to investigate the powe r of attorney g rante d Mr. Davis, the sa le of Mrs. Davis’s assets to United Sho ws , andtheJuly

11 , 1 99 6 T ru st e xec ute d b y Mr s. Da vis

. Ba sed, inte r a lia , upon the re port of the Conservator, the tria l court ente red an Orde r on November

5, 1997, which appr oved the sa le of Mrs. Davis’s assets to United Shows but reserved any ruling on the validity

of the Tr ust (except to direct the truste e under the Trust to rec eive payments made by

United Shows for the a ssets and to pay Mr. Davis $20,000 pe r month out of the trust assets pending further proce eding s).-5-

Mr s. Da vis die d o n N ov e mbe r 1 1, 19 99 . O n Jan ua ry 14 , 2 00 0, thetria l c ou rt

e nte re d it s “Or der Permitti ng I nterplea der of Trust Funds,” which dire cted the tr ustee of the Trust to pay into the court all funds he ld under the Tr ust, and direc ted United Shows to make a ll further payments in connec tion with the purchaseof Mrs. Da vis’s assets to the court, and direc ted that the claimants to the trust prope rty must prosecute any

claims relative to the Trust, including any claims as to the validity

of the Tr ust, in the procee ding initiated by Arnold. On Aug ust 8, 2000, Ames Davis (“ Administrator”), a s the Court-Appointed Administrator for the Estate of Ma ry Reeve s Davis (the “ Estate”) , filed an Interve ning Petition, asking the probate cour

t to rule that the validity

of the Tr ust is mootbeca

use, under

the terms of the Trust, the c orpus of the Tr ust passed to the Estate upon Mr s. Davis’s death. OnAu g us t 16 , 2 00 1, Am e s D a vis fi le d “ Ad min ist rator ’s Mo tio n f

or Sum mary

Judg me nt” (the “ Motion for Summary J udg ment”). TheMotion for Summary J udg ment cited Article IV of theTr us t ( se e su

pr a ) for the proposition that, since Mrs. Da vis did not survive her husband, “ any provisions which might g overn ha d she survived W. Ter ry Davis havebeen pr etermitted and re nd e re d mo ot, a ndun de r A rtic le I V, theAd min ist rator is v e ste d w iththeso le tit le to the trus t assets.” A mes Davis also filed a “Rule 56.03 Statement of Undisputed F act in Support of Administrator’s Motion f or Summary J

udgment” : Pur su a nt t o Ru le 56 .0 3 o f the Te nn e sse e Rul e s o f C ivi l Procedur e, Ames D avis, Administrator C.T.A. of the Estate of Mary Reeve s Davis (the “ Administrator”) spe cifies the f ollowing state me nt o f m a te ri a l f

a c ts a s to wh ic h th e Ad min ist rator c on te nd s, solely for pur poses of his Motion for Summary J udg ment, that there is no ge nuine issue of disputed fa ct. The A dminist rator rese rves the right, in the e vent the Motion for Summary J udg ment is denied, to object at trial to admission of ex trinsic evidenc e relative to the intention of Mary Reeve s Davis, as c learly

expressed in A rtic le I V o f the Tr

us t Ins trume nt w hic h s he e xec ute d d a te d July 11 , 1 99 6, on theg ro un ds that su c h e vid e nc e vio late s th e pa ro le evidenc e rule . The Administrator is entitled to summary judgme nt reg ardle ss of whethe r such e x trinsic evidenc e is admitted. Such fa c ts e sta bli sh e d b y

su c h e xtri ns ic e vid e nc e arec ite d f or theso le purpose of

demonstrating that even if such evide nce w ere a dmi ssi ble , th e fa c ts w hic h th e y wo uldind isp uta

bly e sta bli sh entitle the Administrator to summary judgme nt as a matter

of law. 1. On or a

bout J une 23, 1996, W. Terry Davis, as holder

of a Du ra blePow e r o f A tto rn e y

e xec ute d b y

Ma ry Re e ve s D a vis , neg otiated ag ree ments under whic h Mary Reeve s Davis sold (the “Sale” ) all of he r re al prope rty for $3.8 million to United Shows of Americ a and sold a ll of her pr operty related to J im Reeves Enterprises (which she owned a s sole leg atee of her late husband, J im Reeves) f

or $3.5 million t o United Shows and an a g ree ment of-6- Un ite d Sh ow s to pay

5% of Jim Re e ve s RCAro y a lti e s jo int ly to Mary Reeve s Davis and he r husband, W. Terry Davis. Article I I

of the Trust Indenture dated July11, 1996 (the “ Trust I ndenture ”), a copy of which is Exhibi t 1 to the Deposition of Carrol D. Kilgor e taken May

16-17, 2001. 2. Under Article II of a Tr ust I ndenture executed by Mary Reeve s Da vis , d a te d July

11 , 1 99 6, Ma

ry Re e ve s D a vis pu rp orte dly assig ned all her

contra ctual rig hts to rece ive payments from United Shows under the Sale to he r trustee under the Trust I ndenture

. T ru s tIn d e n t u r e , A rt i c l e II. 3. After a Conservator for Ma

ry Reeve s Davis was a

ppointed, the Sale was a

pproved by

Orde r of this Court entere d November 4, 19 97 . O rd e r d a te d N ov e mbe r 4 , 1 99 7, in C on se rv a tor sh ip pr oc e e din g s. 4. The oblig ations of United Shows’ re prese nting the pr ocee ds of the Sale, if prope rly

a part of the Trust cor

pus, are in the form of United Shows’ promissory Notes in the orig inal principal amount of $7.3 million, which call for pe riodic payments from United Shows; and Mary

Reeve s Davis’ c ontrac tual rig ht to rece ive half of the5% ro y a lti e s p e rt a ini ng to s on g s o f t he late Jim Re e ve s. Tr

us t I ndenture , Article II ; Order of this Court entere d November 4, 19 97 , inCon se rv a tor sh ip P ro c e e din g s. 5. Parag raph IV of the Tr ust I ndenture dated July11, 1996, pr ov ide s a s f

oll ow s: Th is t ru st s ha ll t e rm inate up on my de a th andit s ha ll there upon be the duty

of the Tr ustee, subjec t to the payment of any

fiduciary income taxes that may

be an oblig ation of the Tr

ust, to pay

all trust corpus and acc rued inc ome to the administrator or e x ecutor of my estate subjec t to the provisions hereinaf ter c on ta ine d th a t sh a ll b e app lic ablein the e ve nt that I shall survive my

husband, W. TERRY DAVI S. The dispositi on of the a ssets in myestate sha ll be as de te rm ine d b y

thePr ob a te Cou rt

in a c c or danc e wi th any valid wills and codicils I may here tofore or he re a ft e r h a ve e xec ute d, de bt o bli g a tio n in str ume nts and any other va lid legal instruments heretofor e or here afte r executed by

me. Trust I ndenture , Article IV.-7- 6. Mary Reeve s Davis did not survive her husband, W. Terry Da vis

. Ple a din g s. 7. At pag e 40 of his deposition, Carrol D. Kilgor e, who repr esente d Mary

Reeve s Davis in the pre paration and execution of theTr us t Ins trume nt d a te d July 11 , 1 99 6, te sti fi e d a s f

oll ow s: Q. Mr . Kilg or e , y ou ha ve ide nti fi e d a s E xhibi t 1 this trust i nstrument dated July11, 1996. A. Th a t’ s rig ht. Q. Para g ra

phRom a n n ume ral IV o n Pa g e 4 o f this a g re e me nt s pe c if

ie s th a t th e trus t sh a ll t e rm inate u p o n t h e d e a t h o f

M ary R e e v e s D a v i s . A n di t s a ys that it is the du ty

of thetrus te e to p a y

a ll t ru st corpus and acc rued inc ome to the administrator or executor of my

estate subjec t to the provisions here inafter

contained that shall be applica ble in the event that I

shall survive my

husband, W. Terry Davis, period, close quote. Do y ou se e that? A. Ye s. Q. Did she unde rstand that at he r death if her hu sb a ndsu rv ive d h e r that th e c or pu s o f this trus t would be paid to her

estate unde r this para g raph? A. Oh, I think so. Imean, that’ s the way we discussed it previously , that she had a will which was to control upon he r death. Deposition of Carr ol Kilgor e, pag e 40. 8. Article V of the Tr

ust I ndenture dated July11, 1996, provides a s f oll ow s: I n th e e v e n t I

s h a ll p r e d e c e a s e my

h u s b a n d , W. TERRY DAVI S, the Trustee, subjec t to such fi du c iary ta x lia bil iti e s a s may

beimp os e d u po n it may make dis tribu tio n to W. T e rry Da vis in acc ordanc e with the provisions of par ag raph 8 of The Agreem ent , subject to the over riding instructions of Article II I , ¶ 2 her eof. If payment d i r e c t l y t o m y h u s b a n db e n o au t h o r i z e dt h e r e b y, su c h mo ne y s sh a ll b e paid i nto my e state in acc ordanc e with Article I V her eof.-8- Tr us t Ind e ntu re , A rtic le V. (T he ita lic s a resu pp lie d intheTr

us t itself.) 9. The Agreem ent

is defined in Article I

of the Tr ust I nstrument as a contr act be tween W. Ter ry Davis and W. D. White, a copy of wh ic h is a tta c he d a s E xhibi t D to the Tr us t Ins trume nt. Tr

us t I ndenture , Article I

and Exhibi t D to the Trust I ndenture

. 10. Mary Reeve s Davis was not a

party to The Agreem ent . E xhibi t D to the Trust Indenture

. 11. Parag raph 2 of The Agreem ent pr ov ide s a s f

oll ow s: Te rry Da vis a g re e s to e sta

bli sha n ir

re vo c ableTr

us t to provide for

the immediate and life -long persona l a ndhe a lth -c arene e ds of

Ma ry Re e ve s D a vis

. Ex hibit D to the Trust I ndenture

. 12. Parag raph 8 of The Agreem ent pr ov ide s a s f

oll ow s: I n the eve nt that Terry

Davis is living at the time of Mary Reeve s Davis’ de ath, the Trust shall be c losed a ndthea sse ts t

rans fe rr e d to Ma

ry Re e ve s D a vis ’ husband.
Ex hibit D to the Trust I ndenture

. 13. Upon the death of Mary Reeve s Davis, the Truste e did not make a ny dis tribu tio n to W. T e rry

Da vis . Pl e a din g s. 14. Prior to prepa

ring the Trust Instrument, Mr. Kilg ore r ece ived a faxed copy

of The Ag re e me nt, Parag raph 7 of which provide d as fo llo ws : The monies for

establishing the Trust [byW. Terry Da vis ] sha ll b e fi fty

pe rc e nt ( 50 %) of

thefu nd s p a id by United Shows of America . . . f or the prope rties held by Mary Reeve s Davis and/or Ma ry Reeve s Davis and Te rry

Davis, in the amount of approximately

7.3 milli on dollars ($7,300,000.00). These f unds shall be paid dire ctly to the Trust by

the pu rc ha se r o f the se pr op e rtie s.-9- Kilgor e deposition, pag e 69, line 17 throug h pag e 70, line 2; Ex hibit 22; and Ex hibit D to Trust I ndenture

. 15. The Agreem ent

was not executed by

Mary Reeve s Davis. Ex hibit D to Trust I ndenture

. 16. Mr. Kilg ore w as not advised that e ither W. Terry Davis or Dr

. Whit e (w ho later be came her Conservator) ha d power to act on her behalf in connec tion with The Agreem ent . Kilgor e deposition, pag e 69, line 17 throug h pag e 71, line 21. 17. On J uly

8, 1996, afte r he ha d rec eived a copy of The Agreem ent , Mr. Kilg ore w ent to visit Mary Reeve s Davis, who wa s confine d in a locked w ard at Stones Ri ver N ursing Home, in orde r to expl ain The Agreem ent to her and seek he r instructions. Kilgor e deposition, pag e 71 line 22 throug h pag e 73, line 8; pag e 111, lines 5 throug h 11. 18. Whil e Mary

Reeve s Davis did not appea r to Mr. Kilg ore to be surprised by

the provisions of The Agreem ent , Mr. Kilg ore did not know who (if any one) ha d previously explained it to her. Kilgor e deposition, pag e 74, lines 1 throug h 15. 19. Mr. Kilg ore w as conc erne d that if W. Terry Davis g ot half of thepay me nts dir e c tly

fr om U nit e d Sh ow s, he mig ht s pe ndhis ha lf without pay ing the income taxes due there on. Kilgor e deposition, pag e 76 lines 1 throug h 6. 20 . M r. Ki lg or e te sti fi e d a s f oll ow s a bo ut h is c on ve rs a tio n w ith Mary Reeve s Davis at the nur sing home on J uly 8, 1996, conce rning the purporte d g ift of half the payments rec eived f rom Un ite d Sh ow s to W. T e rry Da vis : I reme mber I

told her that I

could not safe ly

protec t he r h a lf e xce pt b y

pay ing a ll the mon e y

int o tr us t to secur e tax pay ment beca

use if Te rry

– something happene d to Terry , she could be stuck with the wh oleta x bill a ndwo uldno t have su ff ic ie nt a sse ts to p a y it. So i ns te a d o f p utting ha lf of it i nto trus t, all of it had to be paid in init ially until the tax mon e y wa s se c ur e d .

. . a ndsh e a g re e d to that. Kilgor e deposition, pag e 75, lines 13 throug h 24.-10- 21. Whil e The Agreem ent seeme d to sugg est that Mary Reeve s Davis had ma de a g ift to W . Terry Davis, Mr. Kilg ore w as neve r su rewh e the r any

su c h g if t ha d b e e n ma de . E xhibi t 6 t o T ru st I ndenture , para g raph 7; Kilg ore de position, page185, lines 10 throug h 13. 22. Mr. Kilg ore te stified as follows at his deposition: Q. What are the unce rtainties with which y ou wer e un c omf orta bleon July

10 [the day

be fo retheTr

us t I nstrument was e x ecute d], Mr. Kilgore ? A. Wel l, the un c e rt a intie s w a s [si c ] that th is w a s a monstrous gift f

rom her to he r husband. It was entirely contra ry to her prior

actions. And I

had no a ssu ranc e of

he r c omp e te nc e a ndI

fe lt o bli g a te d to try to find out if she was c ompetent. And if she wasn’t, if the re w as any

doubt about it, to safeg uard a g a ins t it

. Kilgor e deposition, pag e 118, line 14 throug h pag e 120, line 23. 23 . O n July

10 , M r. Ki lg or e inq uir e d o f M ary Re e ve s D a vis ’ ps y c hiatrist , D r. Ma

rg oli n, wh e the r h e c ou ld g ivea n o pin iona s to Mary Reeve s Davis’ c ompetenceand wa s advised that Dr

. Marg olin would not give an opinion as to her compe tence . Kilgor e deposition, pag e 118, line 14 throug h pag e 120, line 23; Exhi bit 26. 24. Mr. Kilg ore inserted the following provision (the “D eleted Provision”) in Article II I

of the Tr ust I nstrument as it was orig inally prepa red: (2 ) A ft e r e sc ro wi ng fu nd s f or ta xes a s a fo re said, theTr us te e sh a ll seg reg ate and hold in trust under this inst rument my half of the p r o c e e d s o f

e a c h s u c h p a ym e n ta s c o n t e m p l a t e db y The Agreem ent
. The Tr ustee shall then pay

to my husband, W. Te r r y D av is , h is ha lf if it d e te rm ine s th a t The Agreem ent toge ther with my

power of attorne y

g rante d to him on May

25, 1996, vests him with lega l e nti tle me nt t o s uc h s ha

re . I f i t de te rm ine s th a t su c h d oe s n ot v e st him with such ownership then I now AFF I RM/DO NOT AF FIRM ___________________________ [ D e l e t e O n e ] M A R Y R E E V E S D A V IS such g ift. I f I

aff irm such g ift, my

Trustee shall honor it upon re c e ipt of writt e n c e rtif

ic a tio n b y my ph y sic ia n, RI CH AR D-11- MA RG OLIN, M. D. , o f h is c on c lus ion , o n th e ba sis of app ro priate testing, that I

have the prese nt mental competenc e to make suc h g ift in view of (a ) my

long and happy

marria g e and ( b) the amount of theg if t. Kilgor e deposition, pag e 128, line 1 throug h pag e 129, line 18. 25 . M r. Ki lg or e e xpla ine d th e De le te d Pr ov isi on a s f oll ow s: ... It made the trusteemake the de termination of whe ther the so-called, quote, the ag ree ment, vested any owner ship in Terry

. And then if it didn’t, then it had the plac e for Mary to rea ffirm the g ift if she wanted to. Q. Was part of that driven by the fa ct that Mary

was not eve n a party to the ag ree ment betwee n Terry and W. D. Whit e? A. It was mainly

driven by

the fa ct that it was obviously void on its face as a g ift because Ter ry was a cting under a

power of a tto rn e y a ndc ou ld n ot u se it t o ma ke a g if t to him se lf

a ndI so state d inthec on fe re nc e the re . I said, “ An y

trus te e wh o s e e s th is will conclude that ther e is no valid g ift to y ou.” Q. What w a s said n e xt in r e sp on se to tho se c omm e nts ? A. Well, Terry

expressed conc ern a

bout ge tting Dr . Marg olin in on it. Q. Why was he conce rned a

bout ge tting Dr . Marg olin? A. I do n’ t no w w hy

he wa s c on c e rn e d. Hejus t di dn ’t – h e jus t ob je c te d to that a ndMr . B rans te tte r e xpre sse d a g re e me nt w ithhim about the diffic ulty

of g etting a

psy chiatrist’s opinion. Q. Did Mary

express an opinion one way or the other ? A. She didn’t express. She just sort of indicated ag ree ment afte r Terry kept insisting and I

sort of looked ove r at he r and I said, “Well, I ’ll take it out if it’s okay .” Something like that. And she g ave a very slight nod is the most I

can say . She pretty

much didn’t show much life during the whole pr ocee dings e x cept that sh e be c a mea le rt

on thedu ra

blepo we r o f atto rn e y

a ndI do n’ t r e c a ll he r s a y ing a nythi ng e xce pt t o c hatte r w iththewi tne sse s w ho c a me in, y ou know.

*** Q. Di d y ou c hang e theins trume nt? A. Yes, I took out everything f

rom beg inning with the phr ase “ the trustee sha ll then pay

to my husband” and all the re st of that para g raph I

lined out, acc ording to the best of my rec ollection.-12- And then it was re typed. I mean r eprinted, of

course , from the computer. Just part was dele ted. Kilgor e deposition, pag e 129, line 14 throug h pag e 130, line 4; pag e 132, lines 3-9. 26 . A t hi s d e po sit ion , M r. Ki lg or e te sti fi e d a s f oll ow s: Q.

.. . I ’m

sh ow ing y ou Exhi bit

1 n ow , w hic h is thetrus t indenture be aring the date w hich was a ctually executed. As y ou understood it, was the pur pose of this instrument to acc omplish any g if t f ro m Ma ry Re e ve s D a vis to T e rry

Da vis ? A. No. Well, it was initi ally , as I initiallydraf

ted it, it was to give her the opportunity

if she wished – Q. Rig ht. A. –to make or

to d e c lin e to m ake su c h a g if t. Q. Well, in pointof fa ct, let’s look – A. Now, a s it’s amended, it wa s not for the purposeof vesting any rig hts in him whateve r. Kilgor e deposition, pag e 183, lines 1 - 14. 27 . A t hi s d e po sit ion , M r. Ki lg or e te sti fi e d a s f oll ow s: Q. Now Par ag raph V [of the Trust I nstrument] t alks about money that should be distributed to W . Terry – may be distributed to W. T e rry Da vis . I s th a t – w hat mo ne y is that? A. Wel l, that w a s o ri g inally writt e n to so rt

of – w ithre fe re nc e to the lang uag e which c alled for a psy chiatrist’s opinion. Q. So, in o the r w or ds – A. Sa id s ha ll b e su bje c t to theov e rridi ng ins truc tio ns of Artic le III , P ar a g r ap h ( 2 )

. A n dw h e n t h i s w a s w r i t t e n , A rt i c l e III , Para g ra ph(2 ), ha d th e pr ov isi on in i t c a lli ng fo r the trus te e to p a ss judgme nt on whether

Davis, Ter

ry Davis had a lrea dy

achie ved owner ship; and if not, then this alternative of Mary now appr oving a g i f tt o T e rry. Q

. O k a y. A. And now it just say s – it doesn’t make a lot of sense a s it’s left no w b ut I did n’ t g o b a c k andre vis it this

. Q. Wel l, b ut – A. B ut the overriding instructions of Article I I I , Parag raph ( 2), ar e to escrow funds first for

taxes. But it does speak, instea d of the entire c orpus, it speaks of individual payments. That is, it was a nti c ipate d th a t U nit e d Sh ow s w ou ld m ake ind ivi du a l pay me nts pu rs uant t o th e se va

ri ou s c on tr a c ts andthi s w a s to be imm e diate ly-13- split after the truste e dete rmined how much mone y should be set a sid e fo r t a xes. Q. An d w a s it

y ou r u nd e rs ta nd ing that at Ma ry Re e ve s D a vis ’ de a th that arr a ng e me nt w a s to te rm inate a ndit w a s a ll t o b e paid over to he r executor? A. Well, I

think I understood that upon her death if the trustee ha d any money in hand from an undistributed payment that Terry – the half that wa sn’t Mary ’s could be paid over to Ter ry but then everything would be transfe rre d to her e x ecutor

. Q. Now – A. Of c ourse, I

rea lly didn’t know in this whether – y ou know, I assumed this was ade quate to assig n the note and the contra cts – Q. To thetrus t? A. – to thetrus te e , a ssu min g the rewa s n o p ri or a ssi g nme nt t o T e rry. Q. Now, wa s it the purpose of this trust indenture a s y ou un de rs too d it

to i mpl e me nt the e nti rea g re e me nt [ The Agreem ent ] wh ic h is Exhi bit

D t o th e a g re e me nt? A. Ab so lut e ly

no t. Q. So does this langua g e her e mean in Parag raph 1 [of The Agreem ent ] where it say s Purpose? Does it – did y ou mean – why do e sn ’t that me a n to imp le me nt the e nti rea g re e me nt? A. B eca use it say s to impl ement as he rein provide d the ag ree ment ma de be tw e e n D a vis a ndWhit e . A ndso if it’ s h e re in p ro vid e d to imp le me nt that a g re e me nt, it’ s to be imp le me nte d. I f i t’ s n ot s o pr ov ide d h e re in, the n th e a g re e me nt h a s n o e ff e c t. Kilgor e deposition, pag e 189, line 4 throug h pag e 191, line 9.

On J uly 8, 2002, Mr. Davis filed a “Response to Administrator’ s Statement of Undisputed Fa cts and W. Terry Davis’ Statement of

Fa cts in Opposition to Admi nistrator’s Motion for Summary

J udg ment” (the “Response” ). The Re sponse admits all of the Administrator’s fa cts for pur poses of summary

judgme nt, except (1) Mr. Davis disputes the admissibili ty

of the de position t estimony of Carr ol Kilgor e, Mrs. Da vis’s attorney who pre pare d the Trust; (2) Mr . Davis denie s that Mrs. Davis wa s not a party to a document e x hibited to the Tr us t a ndre fe rr e d to the re in a s “ The Agreem ent .” Mr. Davis arg ued that Mrs. Da vis became a p art y t o t h e A g r e e m e n tb e c au s e s h e s i g n e dt h e T ru s tt o w h i c h t h e A g r e e m e n tw a s e x h i b i t e d

. In addition to his R esponse, Mr. D avis submitted his own Affidavit in opposition t o the Ad min ist rator ’s Mo tio n f

or Sum mary

Judg me nt. Following a hea

ring , the trial court entere d its “Memorandum Opinion” on January 22, 20 03 , w hic h g rante d th e Ad min ist rator ’s Mo tio n f

or Sum mary

Judg me nt. Mr . D a vis app e a ls from the Or der g ranting Ames Da vis’s Motion for Summary J udg ment and raises one issue for-14-

re vie w a s st a te d inhis brie f: Whe the r the tria l c ou rt imp ro pe rl y

int e rp re te d th e De c e de nt’ s T ru st I ns trume nt andthu s e rr e d b y g ranti ng theAd min ist

rator ’s Mo tio n f

or Sum mary

Judg me nt. Resolution of the issue in this case wa s determined a s solely depende nt upon the construction of the provisions of the Trust and w e will first revie w the ca se on that pre mise. The lang uag e used in a

written instrument must be taken and understood in its plain, ordinary , and popular sense

. Bob Pearsall Motors, Inc. v. Regal Chrysler-Plymou th, In c. , 521 S.W .2d 578 (Tenn.1975) . I n construing written instruments, the words e x pressing the parties’ intentions should be g iven the usual, natural, and or dinary meaning

. Ballard v. North Am erican Life & Cas. Co. , 6 67 S.W. 2d79 (T e nn .Ct .A pp .1 98 3) . I f t he la ng ua g e of

a writt e n in str

ume nt i s unambig uous, the Court must int erpr et it as written rather than a ccor ding to the une x presse d intention of one of the pa rties. Sutto n v . Fi

rst Na t. B ank of

Cro ssv ill e , 620 S.W .2d 526 (Tenn.Ct.App.1981). Awritten instrument is not ambiguous mer ely beca use the pa rties have differ ent interpre tations of the instrument’s various provisions, Cookeville Gy necology & Ob ste tric s, P. C. v . So uthe as te rn Data Sy s. , I nc . , 8 8 4 S

. W

. 2 dat4 6 2 (c i t i n g Om an Con str. Co. v. Te nne sse e V

all e y Auth. , 486 F.Supp. 375, 382 (M.D.Te nn.1979)), nor can this Court cre ate an ambig uity wher e none e x ists in t he instrument. Coo ke v ill e P. C. , 884 S.W .2d at 462 (c iting Edwards v. Travelers Indem . Co. , 201 Tenn. 435, 300 S.W.2d 615, 617-18 (1957)). Thecourt sh ou ld f ir st s e e k th e pa

rtie s’ int e nti on by

e xami nin g thewo rd s inthewritt e n in str ume nt, Hutc hiso n v . Bo ar

d , 250 S.W .2d 82, 84 (Tenn. 1952) , and by considering these wor ds in the context of the instrument as a whole. Colli ns v. Sm iths on , 585 S.W .2d 598, 603 (Tenn. 1979) ; Bar be r v . W e stmore lan d , 6 01 S.W. 2d71 2, 71 4 ( Te nn . Ct . A pp . 1 98 0) . Co urts c us tom ari ly decline to c onsider par ol evidencethat adds to, varie s, or otherw ise contra dicts the lang uag e of the instrument. Stickley v. Carm ichael , 8 50 S.W. 2d12 7, 13 2 ( Te nn . 1 99 2) . H ow e ve r, pa ro le evidenc e may

be admissible to remove a latent ambiguity

. Stickley v. Carm ichael , 850 S.W .2d a t 13 2; Estate of Burchfiel v. First United Methodist Ch urch , 9 33 S.W. 2d48 1, 48 2 ( Te nn . Ct

. App. 1996). A latent ambig uity is found wher e: ...the equivocalityof express ion or obscurity of intention does not arise f rom the words the mselves, but from the am b i guous state of extrinsi c circ umstances to w hich the words of the instrumen t re fer , and which is susceptible of explanation by the mere development of extraneous fa cts, without altering or adding to the written lang uag e, or re quirin g more to be unde rstood there by than will fairly

comport with the ordinary

or leg al sense of

the words and phrases made use of. Teague v . Sower , 1 1 4 S

. W

. 4 8 4 , 4 8 8 (T en n . 1 9 0 8 ) ( ci t i n g We ath e rhe ad v . Se we ll , 28 Tenn. (9 Humph.) at 295. Ontheoth e r h a nd , p aro le e vid e nc e is n ot a dmi ssi bleto e xpla in a pate nt ambi g uity contained w ithin the inst rument. Estate of Burchfiel v. First United Methodist Ch urch , 933 S.W. 2da t 48 2. A p a te nt ambi g uity is d e fi ne d a s: one produc ed by

the unce rtainty , contra dictoriness, or de ficienc y of the lang uag e of an instrument, so that no discovery of fa cts, or proofT h e trial c o u rt g ive s a tho ro u g h a n a lysis o f t h is a m b igu ity in i ts J a n u a ry 2 2 , 2 0 0 3 M e m o ra n d u m O p inio n , t o 9

w it:

.. .A rti cle I o f t he T rust st ates t ha t M ary R ee ve s D av i s’ p urp o se in cre ati ng t he T rust

is to p ro v id e fo r h e r livin g e x p e n se s a n d m e d ic a l c a re a n d tr e a tm e n t d u rin g h e r lif e a n d to p ro v id e fo r th e d isp o sitio n o f he r p ro p e rty tha t i s to b e h e ld in t ru st up o n it s t er mi nat i on. A r t i cl e I al s o pr ovi des t hat a pur po s e of t he t r us t i s t o “ i mp l ement , as her ei n pr ovi ded, t he A gr eement

. ” Add i t i onal l y , A r t i cl e I I I provi des t hat t he t r us t ee shoul d pe rpetuat e t he m em o ry of Ji m R eev e s p u rs u a n t t o P aragraph 5 of t he (c o n tinu e d ...) -15- of dec larations, can re store the doubtful or sm othere d sense without adding ideas whic h the ac tual words will not themselves sustain. Teague v . Sower , 1 1 4 S

. W

. 4 8 4 at4 8 8 (c i t i n g We ath e rhe ad v . Se we ll , 28 Tenn. (9 H umph.) at 295.
I n o the r w or ds , a

pate nt ambi g uity

is o ne wh ic h a

pp e ars on thefa c e of

theins trume nt; while a late nt ambiguity

is one “...whe re the instrument is unambiguous on its fac e, but bec omes open to more than one interpr etation when a pplied to the fac tual circ umstances.” 76 Am. J ur. 2d Trusts § 694 (2003). A motion for summary

judgme nt should be g rante d when the movant demonstrates that there areno g enuine issues of material fa ct and that the moving party is entitled to a judgme nt as a matter of law. Te nn. R. Civ.P . 56.04. The pa rty moving f or summary

judgme nt bear s the burden of demonstrating that no g enuine issue of materia l fac t exi sts. Se e Bain v . W e lls , 936 S.W .2d 618, 622 (Tenn.1997) . On a motion for summary judgme nt, the court must take the str on g e st l e g iti mate vie w o f the e vid e nc e in f a vo r o f the no nmo vin g pa rty , a llo w a ll r e a so na

ble infere nces in favor of that pa rty , and disca

rd all counte rvailing evidenc e. The question of whethe r a trust document is ambig uous is a question of law.” 76 Am. J ur. 2d Trusts § 686 (2003) . The interpre tation of a written instrument is also a matter of law and not of fa ct. See Rainey v. Sta nse ll , 836 S.W .2d 117 (Tenn.Ct.App.1992). Summary judgme nt is a pref

err ed vehic le for disposing of pur ely

leg al issues. Se e By rd

v . Ha ll , 8 47 S.W. 2d20 8 ( Te nn .1 99 3) ; Bellam y v. Federal Express Corp. , 749 S.W .2d 31 (Tenn.1988) . Since the question of ambiguity and the construction of a

written instrument both involve leg al issues, these matter areparticula

rly suited to disposit ion by

summary judgme nt. Se e

, e .g., Bro wde r v . L og ist

ic s Ma nag e ment, Inc ., 1996 WL 18 14 35 , 1 99 6 L

EX I S Te nn .A pp . 2 27 (T e nn .Ct .A pp .1 99 6) ; see also Rainey , at 119. Since only questions of law a

re involved he re, the re is no pre sumption of corre ctness re g arding the trial court' s g rant of summary

judgme nt. Bain at 622. Ther efor e, our r eview of the trial court's g rant of summary

judgme nt is de novo on the rec ord bef ore this Court. Wa rre n v . Es tat e of Kir k , 954 S.W .2d 722, 723 (Tenn.1997)

. We h a ve re vie we d th e Tr us t inits e nti re ty

a ndwefi ndthat th e tria l c ou rt wa s c or re c t in fi nd ing a late nt ambi g uity

a s to wh e the r M rs . D a vis int e nd e d th a t Mr . D a vis re c e ivethea sse ts outrig ht if he survived Mr s. Davis, or whe ther he was to re ceive them in a fiducia ry capa city for Mrs. Davis’s Estate , or whe ther the a ssets passed to the Estate at all. Be causewe 9(

. . . con t i n u ed) 9 A greem ent whi ch p rovid e s tha t Jim R eeves’ grave s i t e shoul d be m ai nt ai ned and A r t i cl e I I I ( 1) pr ovi des t hat an ot her pur po s e of t he t r us t i s t o provi de for t he proper p ayment o f

t axes on t he m o ni es r e c e ived f rom U ni t ed Sho ws. T he A greem ent f urt her pro vi d es t hat t h e “ p ri m ary purp o se” of t he T rus t i s t o pro vi d e fo r M ary R eev es D avi s ’ per s onal ne eds an d hea l t h c ar e.
W h ile th e re a r e nu m e ro u s sta te d p u rp o se s in th e A g re e m e n t, the o n ly p urpo se s t a te d b o th i n t he t i t l e and agai n i n t he b o d y of t he A greem ent and addi t i on al l y s t at ed to be t h e pr i mar y pu r pos e i s t o pr ov i de for t h e per s on al n ee ds a n d he a lth c a re o f M rs . D a v is. M o re o v e r, it is the lo g ic a l p u rp o se in t h a t he r h e a lth was f a ili n g at t he t i m e t he T rus t and A greem ent were creat ed

. Furt her, t he A g re e m e n t wa s a n a g re e m e n t b e tw e e n he r b ro the r an d h e r hu sb a n d (s h e w a s n o t a p art y t o t he A greem ent ), each o f who m were purp o rt ed l y a ct i ng to p rotect he r and car e f or h er as her heal t h decl i ned. M oreove r , whi l e her b r ot her and hu s band may hav e been au t hor i zed by t he r es pect i ve po wer s of at t orn ey t o act for h er an d i n h er b est i nt erest t o s ee t hat s he was pro vi d ed fo r duri ng her l i fe, nei t her had ap p arent au t h or i t y t o ac t bey on d t h at poi n t

. Par t i cu l ar l y , n ei t h er h ad au t h or i t y t o di s pos e of her es t at e a s t hey mi gh t ch oo s e.

A rt i cl e IV of t he T rus t pro vi d es t hat t he t rus t s h a ll terminat e up o n t he d e a th o f M a ry R e e v e s D a v is. U p o n the ter m ina tio n o f t h e tru st, t h e T ru ste e is di r ec t ed t o pa y t h e t r u st ’ s i ncome a n d c or pu s t o t h e admi n i s t r at or or e x ec u t or su b je c t t o two c o n d iti o n s: fi rs t, the inc o m e tax o b liga tio n s o f t h e tru st m u st b e p a id and , s eco nd , pa y m ent of t he t rus t co rpus and ac crued i nco m e i s “su b je ct t o t he provi s i ons he r ei naf

t er cont aine d

.. . . . ” Some of t he “ provi s i ons he r ei naf t er c o n t a i n e d ” a r e fo u n d i n A r t i c l e V.
A rt i cl e V pr ov i des t h at i f M ar y Ree v es D av i s pr ede ce as es h er h u s band ( whi ch s he di d) t he T r us t ee m ay make di s t r i but i on t o T er r y D avi s , subj ect t o, t ax liab ili ties b e in g sa tisf

ie d , i n a c c o rd a n c e w ith p a ra g ra p h 8 o f t h e A g re e m e n t. H o wever, A rt i cl e V fur t her st at es t hat thi s p erm i ss i ve aut ho ri t y o f the T rus t ee (who m ay dis t ri b ut e ) is furt her s ub ject t o “ t he o verri d i ng i nst ruct i o ns o f A rt i cl e II I ¶ 2 he reo f .” P ara gra p h 8 st ates that t he “T rust s ha l l b e c l o sed an d t he assets t r an s f er r ed t o M ar y Reeves D avi s ’ hu s band. ” ( emp has i s added ) Art i cl e V , howev er , provi des f urt her l i mi t at i ons . I t provi des t hat par agr aph 8 i s “ s ubj ect t o t he o ve r r i di ng i n st r uct i ons ” o f

A rt i cl e II I, ¶2. (emp hasi s ad d ed ) T he l at t er pro vi d es t hat t he T r us t ee wi l l es s ent i al l y di vide t he procee ds of “ eac h s uch pay ment ” a s c o n te m p la te d b y the A g re e m e n t w ith h a lf b e ing he ld in tru st fo r M a ry R e e v e s D a v is an d h al f be i n g pa i d t o T er r y D av i s . T h e Agr ee men t h owe v er doe s n ot me n t i on t hes e “ pay ment s . ” Fur t her , t he onl y par agr aph i n t he A gr eement wh i ch i s s i mi l ar i n to p i c is pa rag rap h 7 an d i t p ro vid es:

T h e m o n ie s fo r e sta b lishin g the T ru st sh a ll b e fi fty pe rce nt (5 0% ) of

t he f un ds pai d by U ni t ed Shows of Am er i ca (off i cers o f whi ch are E d G regory and Ji m E d B ro w n ) fo r t he propert i es he l d by M ar y Reeves D avi s an d/ or M ary R eev es D a v is a n d T e rr y D a v is, i n the a m o u n t o f ap p ro x im a te ly 7 .3 m ill io n d o llar s (7 ,3 0 0 ,0 0 0 .0 0 ). T h e se fun d s s h a ll b e p a id d i rec t l y t o t he T rust by t he p urc ha sers o f t he se p ro p erti es. (c o n tinu e d ...) -16-(

. . . con t i n u ed) 9 Furt her, pa ragraph 8 uses t he t erm “as set s” whi ch i s cl earl y dif ferent t han t he t erm

“ pay men t s ”–“ as s et s ” bei n g mor e i n cl u s i v e an d “ pay men t s ” bei n g mor e l i mi t ed.
T he t er mi nol ogy us ed i n par agr aph 8 of t he A gr eement i s of

par t i cul ar inte re st. In p e rtine n t p a rt i t r e a d s “ the T ru st sh a ll b e c lo se d a n d the a sse ts tra n sfe rre d to M ar y Ree v es D av i s ’ h u s ban d. ” ( emph as i s adde d) W h at i s me an t by t h e wor d “ t r an s

f er r ed ” ? S h o u ld o n e infe r t h a t T e rr y D a v is, o r m o r e te c h n ic a lly M ar y Ree ve s D avi s ’ hus band i s t o recei ve t he t rans fer of t he ass et s i n a f

i d uci ary c a p a c ity a s the e x e c u to r u n d e r h e r w ill w ith the re su lti n g a ff irm a tive d u ty t o “adm i ni st er” her p rob at e est at e, o r d o es i t m ean t hat her husband i s t o recei ve t he tra n sfe r o f ass e ts a s h is p ro p e rty i n f ee wi t ho ut t he d ut y of p rob at e ad m i ni st rat i o n.
E nd eavo ri ng t o li m i t i t s exam i nat i o n t o wi t hi n t he fo ur corners of t he d o cum ent s, t he C o urt ha s exam i ned other rel evant t erm i no l o gy i n t he T rus t and A greem ent

. I n A rt i cl e II I ( 1 ) of t he T rust , t he fo l l o wi ng t erm i no l o gy i s used, t he “T ru ste e sh a ll r ece i ve ...all m o n ie s to b e p a id o u t.. .o f the a fo re sa id c o n tra c ts.... ” (em p ha si s a d d ed ) A re t he w o rd s “transfer” a nd “rec eive ” syno nym o us in t he sense t hat a per s onal r i gh t of owners hi p do es or do es not at t ach ? D o bo t h i mp l y an i nt er es t i n f

ee o r d o t hey i mp ose a f i duci ar y r es po ns i bi l i t y wi t h r ef er enc e t o what i s t r an s fer r ed or r ec ei v ed?
M o reove r, why do es Art i cl e V pro vi d e t hat “ [i f ] p a y m e n t d ire c tly t o m y husband be not aut ho ri zed t hereb y , . . . (r ef erri ng t o pa ra graph 8 of t he A greem ent w ith e m p h a sis a d d e d ) su c h m o n [ie s] sh a ll b e p a id into m y e sta te in ac c o rd a n c e w ith A rt i cl e IV hereof”? S ho ul d one i nfer t he same o r a di f ferent m eani ng f

rom t he phr as e “ pay ment di r ect l y t o” my hu s band as di s t i ng ui s hed f r om t he phr as es “t ran sf er” an d / o r “rec eive ” a s used elsew he re in t he t w o d o cu m en t s? (f o o t no t es om i t t ed ).

-17- c on c lud e that th e pr ov isi on in the Tr us t c on ta in a

late nt ambi g uity , w e ho ld that th e tria l c ou rt did not err in a llowing e x trinsic evidenc e of Mr s. Davis’s intent. In light of our holding, our

revie w of thetria l c ou rt ’s fi nd ing s w ithre g ardto M rs . D a vis ’s int e nt i s g ov e rn e d b y Te nn . R. Ap p. P. 13(d) and, there fore , “shall be de novo u p o n t h e r e c o r do f t h e tr i a l c o u rt , a c c o m p a n i e db y a pr e su mptionof

thec or re c tne ss o f the fi nd ing , u nle ss the pr e po nd e ranc e of thee vid e nc e is otherwise.” The only

testimonyor fa cts in dispute in this matter a re those of

fer ed throug h the testimonyof Ter

ry Davis and Car

rol Kilg ore. Thetrial court e x cluded Mr. D avis’s testimony un de r the De a d M a n’ s Statut e , w hic h p ro vid e s:

I n actions or proce eding s by or ag ainst executors, administrators, or g ua rd ia ns , in wh ic h judg me nts may be re nd e re d f

or or a g a ins t th e m, neither party

shall be allowe d to testify ag ainst the other a s to any tr a ns a c tio n wi th or state me nt by thete stator , in te state , o r w ard , u nle ss called to testify

there to by

the opposite party

... T.C.A. § 24-1-203 ( 2001)-18-

We f indthat Mr . D a vis ’s te sti mon y falls wi thi n th e De a d M a n’ s Statut e in that Mr . D a vis is a party to this action ag ainst the Administrator of the Estate and he is seeking to testify ag ainst the Estate conc erning a “tr ansac tion or statement by [Mrs. Davis, the Dec edent].” Consequently , the trial court wa s corr ect in excluding Mr . Davis’s testimony . The testimony of Mr. Kilg ore, ho we ve r, wa s n ot n e g a te d b y theDe a d M a n’ s Statut e a ndwa s a dmi ssi blefo r the lim ite d p ur po se of re solving the latent ambig uity . Since Mr. Da vis’s testimonywas prope rly excluded under the Dea d Man’s Statute, Mr. Kilg ore’ s testimonyis uncontested. We have revie wed Mr. Kilgor e’s testimony , in conjunction with the trust instrument, and we f ind that the evidenc e does not preponde rate ag ainst the trial court’s finding that Mrs. Davis intended to “ provide for the welf are of her self and he r husband while shewas living and upon her death to pass he r asse ts, inclusive of the Tr ust assets, to her probate estate for pr obate a dminist ration.” Although the casewas tried in the trial court on the the ories her etoforeset out, we consider the controlling issue in this case to be whe ther the pr ovision of the Trust, under w hich theAp pe llant c la ims theri g ht t o th e trus t e state , is va lid . In e sse nc e , Pa ra g ra ph5 o f the trus t instrument provides that if the settlor of the Trust, Mrs. Davis, pre dece ases he r husband, the Appellant her ein, the trustee of the Tr ust may make distribution to Mrs. Davis’s husband a s pr ov ide d th e re in. Th e la ng ua g e of thi s p ro vis ion , u nd e r w hic h th e Ap pe llant c la ims , is a testamentary

dispositi on of the trust estate . As this Court noted in Est ate of Sinc lai r v . Ke ith Sin clair, Inc. , 894 S.W .2d 747 (Tenn. Ct. App. 1994):

Anins trume nt t akin g e ff

e c t at th e de a th o f the make r is a wi ll. Se e Pr itc har d o n Wil ls , Vol. 1, § 19. It follows, theref ore, that to be va lidsu c h an in str

ume nt mus t c omp ly

wi th the statut ory

re qu ir e me nts nece ssary to constitute a valid will. Wrightv. Huskey , 592 S.W .2d 89 9 (T e nn . Ct. Ap p. 19 79 ). A c on ve y a nc e of a pres ent int e re st, howeve r, is not testamentary in char acte r, even thoug h the enjoyment of the rig hts convey ed ar e postponed until the death of the donor or g rantor. Couch v. Hoover , 18 Tenn.App. 523, 79 S.W .2d 807 (1934). T h e int ent of the g rantor- -whe ther he intends to pass a pre sent i rr ev o cab l e i n t er es to r o n e t h att ake s ef fe ctath i s d ea t h

-- i s co n tro l l i n g. Coc kre ll v . T

ue ll , 61 Tenn.App. 423, 454 S.W.2d 713 (1970).

Id. at 749. Th e g ravame n o f the iss ue is M rs . D a vis ’s int e nt, that is wh e the r s he int e nd e d to “ pa ss a prese nt irrevoc able inter est or one that [ took] eff ect at [ her] death.” Coc kre ll , 454 S.W .2d 713. Fr om the plain lang uag e of Par ag raph 5 of the trust instrument, it is clea r that the provision for Mr . D a vis to a c qu ir e thepr op e rty un de r the ins trume nt i s o nly trig g e re d inthee ve nt o f the de a th of Mrs. Da vis. Accor dingly , we c onstrue Para g raph 5 to be a testame ntary dispositi on, which must complywith the require ments for a testamentary

document found at T.C.A. § 32-1-104 (2001). Since the instrument under whic h Mr. Davis c laims does not comply with the formalities re qu ir e d f or a va lidwi ll, thepr ov isi on of thea g re e me nt ( i.e . Pa

ra g ra ph5) , in so fa

r a s it a tte mpt s to vest any

property in Mr. Davis, is invalid. The asse ts of the Trust, there fore , become a part of-19-

the Estate of

Mrs. Davis and w ill be dealt with acc ording to the instructions in her last will and te stame nt. F or thefo re g oin g re a so ns , th e or de r o f the tria l c ou rt g ranti ng su mma

ry jud g me nt t o Ap pe lle e is a ff

irme d. Cos ts o f the app e a l area sse sse d to theAp pe llant, W. T e rry Da vis , andhis s u r e t y.

__________________________________________ W. F RA NK

CRA WF OR D, PRE SI DINGJUDG E, W.S.