Opinion ID: 2629946
Heading Depth: 1
Heading Rank: 11

Heading: Existence of Express or Constructive Trust

Text: [¶ 46] Meima first argues that the district court erred in finding that Meima, as settlor, did not create an express trust in which Broemmel, as trustee, would hold the Torrington house in trust for Meima, the trust's sole beneficiary. He contends that all of the parties' written agreements (including the July 24, 2001, lease/purchase agreement) refer to Tom Broemmel as trustee and/or underscore the fact that he was to hold the Torrington property `in trust' for Meima, and that Broemmel admitted in his pleadings and trial testimony that he was to hold the Torrington house in trust for Meima. [¶ 47] Meima further asserts that Broemmel breached his fiduciary duties as trustee because: (a) Broemmel forced Meima to agree to the unconscionable terms contained in the July 24, 2001, lease/purchase agreement; (b) Broemmel pledged the Torrington house as collateral for his purchase (as an individual) of pawn shops in Kentucky; [23] and (c) Broemmel mortgaged the Torrington house to himself in 2002. Accordingly, Meima argues that he (as the trust's beneficiary) is entitled to the $16,000.00 in rent he paid to Broemmel (less the amount Broemmel paid in property taxes and insurance), and that the Torrington house should be conveyed to Meima because the district court ordered that Broemmel be reimbursed for the money Broemmel contributed to the purchase of the Torrington house. [¶ 48] Broemmel argues that sufficient evidence supported the district court's decision that an express trust did not exist and that Meima wants ownership of the home without having to pay anything for it. According to Broemmel, he never intended to even have a trust; it was solely Meima's idea. . . . There was no intent to create a trust by a settlor, there was really not even a settlor, unless Broemmel was so designated, and there was no ascertainable beneficiary, unless it was Broemmel. Broemmel claims that Meima had a right to lease the Torrington house and to purchase the property if he complied with the terms of the lease agreement. If a trust did exist, Broemmel was the settlor and beneficiary; if Meima was the beneficiary, he did not comply with the terms of the trust in order to receive the benefit therefrom. [¶ 49] The district court found as follows: The second sentence of the [July 24, 2001, lease/purchase agreement] states that Broemmel would hold the property in trust for Meima on a lease/purchase. When Broemmel paid the balance of the purchase price for the house at closing he received a deed listing the grantee as Thomas Broemmel, Trustee of the Northern Commercial Trust, dated the 24th day of July, 2001. The evidence established that there was no trust dated July 24, 2001. Meima had created a revocable trust called the Northern Commercial Trust in March, 1998, but that trust obviously is not related to the transactions in this case. That trust requires the trustee to pay the trust's income to Meima. In 2001, [the] parties obviously intended that all rent be paid to Broemmel. The 1998 trust anticipates that the trustee will continue to act after Meima's death and provides for his children. In 2001, the parties obviously intended for Broemmel to be involved with the house only until he was fully paid. The 1998 Northern Commercial Trust establishes Joseph W. Hartnett, not Broemmel, as trustee. Although the parties used the term in trust, the evidence establishes that they did not intend or create what the law recognizes as a trust. Their use of that term, both in the July 24, 2001, document and in the deed obtained on that date, was intended to describe the lease-purchase relationship whereby Broemmel would own the property and transfer it to Meima when Meima fully paid. The Court finds that Broemmel is the owner of the residence, and that it is subject to a lease-purchase for Meima. This conclusion is consistent with Meima's representations to State Farm Insurance in August, 2003. . . . The Court finds that the parties intended for Broemmel to own the Torrington residence and to lease it to Meima. Title would be transferred to Meima when he fully paid his obligations. [¶ 50] We have previously determined that a trust is a fiduciary relationship in which one person is the holder of the title to property subject to an equitable obligation to keep or use the property for the benefit of another. Scotti's Drive In Restaurants, Inc. v. Mile High-Dart In Corp., 526 P.2d 1193, 1196 (Wyo.1974). The elements of a valid trust include a competent settlor and trustee, intent by the settlor to create a trust, ascertainable trust res, sufficiently ascertainable beneficiary or beneficiaries, a legal purpose, and a legal term. Hilbert v. Benson, 917 P.2d 1152, 1157 (Wyo.1996) (citing McGinnis v. McGinnis, 391 P.2d 927, 933 (Wyo.1964); Dallas Dome Wyoming Oil Fields Co. v. Brooder, 55 Wyo. 109, 127-28, 97 P.2d 311, 318 (1939); State v. Underwood, 54 Wyo. 1, 25, 86 P.2d 707, 714 (1939)). Jewish Community Ass'n of Casper v. Community First Nat. Bank, 6 P.3d 1264, 1266 (Wyo.2000). [¶ 51] We are particularly concerned in the instant case with whether the purported settlor exhibited the requisite intent to create a trust. One treatise states the following in that regard: No particular form of words or conduct is necessary for the manifestation of intention to create a trust. It is possible to create a trust without using the word trust or trustee. Conversely, the mere fact that these words are used does not necessarily indicate an intention to create a trust. The question in each case is whether the settlor manifested an intention to create the kind of relationship that to lawyers is known as a trust, that is to say, whether the settlor manifested an intention to impose upon himself or upon a transferee of the property equitable duties to deal with the property for the benefit of another person. I William F. Fratcher, Scott on Trusts, § 24 (4th ed.1987). [24] [¶ 52] Generally, the question whether the parties in their dealings have created a trust is one of fact to be determined largely by ascertaining the intent of the parties. The intent to create the trust must be clear and unequivocal. 76 Am.Jur.2d Trusts § 57 (2005) (footnotes omitted). See generally also, for example, Matter of Estate of Daniels, 665 P.2d 594, 596-97 (Colo.1983) and Matter of Estate of Binder, 386 N.W.2d 910, 912 (N.D.1986). Such intent can be inferred from the nature of property transactions, the circumstances surrounding the holding of and transfer of property, the particular documents or language employed, and the conduct of the parties. . . . While such an inference is not to come easily[c]lear, explicit, definite, unequivocal and unambiguous language or conduct establishing the intent to create a trust is required . . .  no particular language must be used to create a trust or to manifest the necessary intention to create a trust. Bishop and Diocese of Colorado v. Mote, 716 P.2d 85, 100-01 (Colo.), cert. denied, 479 U.S. 826, 107 S.Ct. 102, 93 L.Ed.2d 52 (1986) (emphasis in original). See also Matter of Estate of Vallery, 883 P.2d 24, 27 (Colo.App.1993). [25] [¶ 53] This issue arises amidst a myriad of incongruent and inconsistent documents, legal terminology, witness testimony (mostly self-serving and of dubious value due to the district court's credibility findings), and positions advocated by the parties. [26] It appears from our review of the circumstances that different aspects of the language contained in the written documents at issue, and of the conduct relative to the Torrington house purchase, can be relied upon to support opposite conclusions. For example, on the one hand: (a) In the sales contract between Meima and the Torrington house seller, the Northern Commercial Trust was named as the buyer, the house was to be conveyed to the Northern Commercial Trust, and Anthony Meima executed the agreement on behalf of the Northern Commercial Trust (listing an address in Nevada City, CA). One might infer that Meima initially intended his Northern Commercial Trust of 1998 to be involved in this matter, and the parties now apparently agree that the 1998 Northern Commercial Trust is not the trust referred to in later documents. (b) The July 24, 2001, agreement states that Broemmel agrees to hold property in trust for Meima, refers to Meima's home, and to whatever extent it may be relevant, uses trustee language in referring to Broemmel and the Baltic properties. (c) The closing statement for the Torrington house purchase names Thomas Broemmel, Trustee of the Northern Commercial Trust as the buyer and was signed by Thomas Broemmel, Trustee. (d) The Torrington house was deeded to THOMAS BROEMMEL, Trustee of the Northern Commercial Trust, dated the 24th day of July, 2001. (e) The July 25, 2001, Promissory Note states that for value receive[d], to wit: Property held in trust, [the Torrington house,] Meima promises to pay Broemmel $185,817.91. The July 25, 2001, addendum further states that Broemmel agrees to hold property in trust for Meima, that Broemmel, as trustee of Northern Commercial Trust, has sole authority to sell or convey said property in his own name until he is paid in full the $185,817.91 and all costs and expenses associated with this acquisition, that the Northern Commercial Trust is limited to an agreement by Tom Broemmel to hold [the Torrington house] for the benefit of Anthony Meima pending performance of all terms of this preceding lease/purchase agreement by Anthony Meima, and uses trustee language in referring to Broemmel and the Baltic properties. (f) The July 24, 2002, mortgage names the Northern Commercial Trust as mortgagor of the Torrington house and Broemmel and his wife as mortgagees; Thomas C. Broemmel signed the mortgage on behalf of the Northern Commercial Trust. [27] [¶ 54] Other circumstances place this language and conduct in an entirely different context, especially given the level of clarity required in order to infer the intent to create a trust. For example: (a) Meima, individually, apparently contributed the earnest money for the Torrington house purchase. (b) Broemmel, individually, is named as the buyer of the Kubich option. (c) The July 24, 2001, agreement (signed by Broemmel as Owner and Meima as Buyer) is titled Lease/Purchase Agreement, states that Broemmel agrees to hold the Torrington house in trust for Meima on a lease/purchase  (emphasis added), uses the terms home loan and debt in referring to the Torrington house purchase, requires that Meima pay a monthly lease payment and a $10,000.00 profit to Broemmel, requires Meima to pay Broemmel the $185,817.91 (plus expenses) Broemmel contributed to the Torrington house purchase, requires Meima to pay all property taxes, insurance, costs and expenses, and details the additional collateral available to Broemmel in the event of Meima's default. The agreement also does not appear to delineate any particular duties for Broemmel regarding the Torrington house. (d) Meima subsequently paid rent for several months and transferred rifles to Broemmel consistent with the terms of the agreement. (e) The July 25, 2001, Promissory Note names Meima (individually) as the Borrower and Broemmel and his wife (individually) as the Lender, states that Meima promises to pay the Lender $185,817.91, a $2,000.00 monthly lease payment and $10,000.00 profit, that upon the occurrence of a default event the Borrower's obligations shall become due immediately, without demand or notice, and requires Broemmel to execute a deed giving up any and all further interest he may have in the Torrington house upon his receipt of all moneys due Broemmel. The July 25, 2001, addendum also contains the same language we emphasized in the previous subsection of this opinion. (f) On July 27, 2001, Anthony Meima granted Thomas C. Broemmel a Specific Power of Attorney in all matters relating to the Torrington house, on behalf of Meima personally and for [his] trust, Northern Commercial Trust, and further granted Broemmel the authority to sell the property to satisfy the promissory note if Meima defaulted on the note. (g) Meima declared to the Torrington house insurer that he was not the owner of the house. (h) In a March 2002 receipt to Meima acknowledging that Meima had paid rent through February 2002, Broemmel signed the receipt individually as Landlord. [¶ 55] Considering our appellate standard of review and the particular circumstances of the instant case, [28] we conclude as the Colorado Supreme Court did in Matter of Estate of Daniels, 665 P.2d at 596, wherein the court found that when different aspects of the relevant evidence could support opposite conclusions regarding a settlor's intent to create a trust, the trial court's conclusion, based on this conflicting evidence, that [the settlor] had no intent to create the trust is therefore binding upon us. [¶ 56] Meima also argues that we should impose a constructive trust in favor of Meima on both the Torrington house and the Baltic properties. Broemmel contends that we should not consider Meima's argument because this issue was not raised at trial. In response to Broemmel's argument, Meima merely states that it is clear that the existence of a trust relationship was at issue throughout this case, be it express, oral, constructive or otherwise. We will ordinarily entertain only arguments raised in the court below. Cooper v. Town of Pinedale, 1 P.3d 1197, 1208 (Wyo.2000). Exceptions to this rule exist if the argument is jurisdictional, or if it is of such a fundamental nature that it must be considered. Id. (citing WW Enterprises v. City of Cheyenne, 956 P.2d 353, 356 (Wyo.1998) and Bredthauer v. TSP, 864 P.2d 442, 447 (Wyo.1993)). Hammons v. Table Mountain Ranches Owners Ass'n, Inc., 2003 WY 85, ¶ 17, 72 P.3d 1153, 1156 (Wyo.2003). We conclude that Meima has not directed us to specific evidence indicating that this issue was sufficiently raised in the district court, and does not argue that the issue meets either of the above-listed exceptions.