Court Opinion

ID: 2820821
Source: CourtListenerOpinion
Date Created: 2015-07-28 16:01:58.107716+00
Date Added: 2024-06-11T09:44:12.032676
License: Public Domain

NOT RECOMMENDED FOR PUBLICATION
                               File Name: 15a0532n.06

                                          No. 14-2416

                           UNITED STATES COURT OF APPEALS
                                FOR THE SIXTH CIRCUIT
                                                                                     FILED
MADELEINE L. DECLERCQ,                           )                             Jul 28, 2015
                                                 )                        DEBORAH S. HUNT, Clerk
        Plaintiff-Appellant,                     )
                                                 )    ON APPEAL FROM THE UNITED
v.                                               )    STATES DISTRICT COURT FOR THE
                                                 )
                                                      EASTERN DISTRICT OF MICHIGAN
JP MORGAN CHASE BANK, N.A. and                   )
AMERICAN DIABETES ASSOCIATION,                   )
                                                 )    OPINION
        Defendants-Appellees.                    )
                                                 )
                                                 )

       Before: GILMAN, COOK, and KETHLEDGE, Circuit Judges.

       RONALD LEE GILMAN, Circuit Judge. This case requires us to decide what being

someone’s “issue” means. If one’s “issue” includes all blood relatives, then Madeleine DeClercq

stands to inherit about five million dollars. Michigan law, unfortunately, limits one’s “issue” to

lineal descendants. For this reason, we AFFIRM the judgment of the district court.

                                      I. BACKGROUND

       Joan Bookmyer created a trust in 1992 (the Trust). According to the Trust agreement,

whatever remained of the Trust at the time of her death was to be transferred to her daughter “or

any other issue.” If Bookmyer had no living issue at the time of her death, then the remainder of

the Trust was to be paid to the American Diabetes Association-Michigan Affiliate (ADA-MI).

The ADA-MI was merged into the national American Diabetes Association (ADA) in 1998.
DeClercq v. Am. Diabetes Assoc. et al, No. 14-2416

Bookmyer passed away on June 13, 2013 at the age of 89, predeceased by her daughter, who

died on January 4, 2012. There were no other lineal descendants.

       After Bookmyer’s death, her cousin Donald DeClercq (Madeline DeClercq’s father)

probated a Will allegedly executed by Bookmyer on January 16, 2012. The Will purported to

revoke the Trust agreement and distribute Bookmyer’s assets—including those in the Trust—to a

series of individuals, with Donald DeClercq as the residuary beneficiary. A will contest ensued,

with the ADA asking the probate court to set the Will aside. That litigation was settled in May

2014. Under the settlement, Donald DeClercq received $1.1 million from Bookmyer’s estate and

disclaimed any interest that he might have had in the Trust. Six other individuals received

specific bequests from Bookmyer’s estate, and the ADA received the roughly $5 million Trust

balance.

       Madeline DeClercq was not a party to the litigation over the Will, nor did she receive

notice of the proceedings. After the Will was probated, DeClercq filed a federal lawsuit against

the ADA and JP Morgan Chase, the latter serving as the trustee of the Trust (collectively, the

Appellees), arguing that she is Bookmyer’s “issue” and thus entitled to the residue of the Trust.

The district judge granted the Appellees’ motion to dismiss DeClercq’s suit for failure to state a

claim upon which relief can be granted. DeClercq now appeals that decision.

                                         II. ANALYSIS

       We review de novo a district court’s grant of a motion to dismiss for failure to state a

claim. Gahafer v. Ford Motor Co., 328 F.3d 859, 861 (6th Cir. 2003). In reviewing the decision

of the lower court, we must accept all of the factual allegations in the complaint as true, although

we need not accept bald legal conclusions or unwarranted factual inferences. Id. We may also

consider documents referenced in the complaint, see Tellabs, Inc. v. Makor Issues & Rights, Ltd.,

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551 U.S. 308, 322 (2007), such as the Trust agreement and the settlement documents stemming

from the ADA’s challenge to the Will.

        This case presents two straightforward questions of law: (1) is the word “issue,” as used

in the Trust agreement, limited to lineal descendants; and (2) does Bookmyer’s gift to the ADA-

MI fail by virtue of the ADA-MI’s absorption into the national ADA? We answer “yes” and

“no,” respectively, for the reasons discussed below.

A. The word “issue” is limited to lineal descendants

        DeClercq argues that the word “issue” as used in the Trust agreement is ambiguous, such

that she should be allowed to conduct discovery as to Bookmyer’s intent when the Trust was

created. At the very least, she argues, her interpretation of the Trust agreement (that she

qualifies as Bookmyer’s “issue” by virtue of being a blood relative) is sufficiently plausible that

the district court was obligated to accept her contention for the purposes of a motion to dismiss.

She is mistaken on both counts.

        Courts must interpret a trust to “give effect to the settlor’s intent,” which is to be

determined “from the trust document itself, unless there is ambiguity.” In re Theodora Nickels

Herbert Trust, 844 N.W.2d 163, 164 (Mich. Ct. App. 2013) (citing In re Kostin, 748 N.W.2d
583, 589 (Mich. Ct. App. 2008)).         A trust agreement is ambiguous when “an uncertainty

concerning the meaning appears on the face of the instrument and arises from the use of

defective, obscure, or insensible language.” In re Woodworth Trust, 492 N.W.2d 818, 819

(Mich. Ct. App. 1992). If there is no ambiguity on the face of the trust agreement, then a court

need not accept extrinsic evidence in applying its terms. In re Estate of Butterfield, 275 N.W.2d
262, 266 (Mich. 1979) (“Where there is no ambiguity, [the settlor’s] intention is to be gleaned

from the four corners of the instrument . . . .”).

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       Here, the district court determined that there was no ambiguity in the Trust agreement.

The court’s interpretation of the agreement was therefore legal rather than factual in nature. See

In re Estate of Bem, 637 N.W.2d 506, 509 (Mich. Ct. App. 2001) (holding that when extrinsic

evidence is not required to interpret a will, the trial court’s interpretation of the instrument is not

a factual finding but rather a legal conclusion). Legal assertions are not entitled to the same

presumption in favor of the nonmovant as are factual allegations when a court rules on a motion

to dismiss. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

       The word “issue” is not “defective, obscure, or insensible” under Michigan law. One’s

“issue” has long been defined in Michigan as that person’s lineal descendants. In re Estate of

Butterfield, 275 N.W.2d at 266 (“[T]he word ‘issue’ is defined in Michigan to mean all lineal

descendants.”); In re Estate of Roach, 420 N.W.2d 847, 850 (Mich. Ct. App. 1988) (interpreting

“issue” to mean lineal descendants). At the time Bookmyer executed the Trust agreement,

Michigan’s statutory law clearly provided the same definition. The then-effective probate code

defined “issue” as “all of the person’s lineal descendants of all generations, except those who are

descendants of a living descendant.” See Mich. Comp. Laws Ann. § 700.7(6) (repealed 2000).

       DeClercq points out, however, that the statutory definition changed in 2000 with the

enactment of Michigan’s Estates and Protected Individuals Code (EPIC). EPIC defines “issue”

as “an individual’s descendant,” and a “descendant” is defined as “all of [an individual’s]

descendants of all generations.” Mich. Comp. Laws Ann. § 700.1103(k); § 700.1105(d).

DeClercq argues that the omission of the word “lineal” from EPIC’s definition of “issue”

indicates that the legislature intended to expand the definition to include all relatives, both lineal

and collateral. She turns to Black’s Law Dictionary to bolster this argument, pointing out that

Black’s defines “descendant” as “[s]omeone who follows in the bloodline of an ancestor, either

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lineally or collaterally.” Black’s Law Dictionary (10th ed. 2014). Black’s also recognizes the

phrase “collateral descendant” as having an 18th-century meaning, “[l]oosely, a blood relative

who is not strictly a descendant, such as a niece or nephew.” Id. In short, DeClercq asks us to

not be guided by the caselaw of the forum state in defining the term “issue,” but instead to look

to a centuries-old, alternative definition from a secondary source.

       We decline to do so. The text of Michigan’s EPIC comports with the decades of caselaw

establishing that one’s “issue” is limited to that person’s lineal descendants. DeClercq cites no

authority indicating that EPIC was drafted with the intent to expand that definition. And despite

Black’s Law Dictionary’s inclusion of a 300-year-old definition of “descendant” that can extend

to collateral relatives, it elsewhere defines “issue” as “[l]ineal descendants” or “offspring.”

Black’s Law Dictionary (10th ed. 2014). Other legal dictionaries concur in this more limited

understanding of the term. See Issue, The People’s Law Dictionary, http://dictionary.law.com/

Default.aspx?selected=1032, (last visited Jul. 21, 2015) (defining “issue” as “a person’s children

or other lineal descendants such as grandchildren and great-grandchildren”); Lawful Issue,

Nolo’s Plain-English Law Dictionary, http://www.nolo.com/dictionary/lawful-issue-term.html

(last visited Jul. 21, 2015) (equating the word “issue” with “lineal descendant”). Several lay

dictionaries   offer   the   same      definition.         See   Issue,   Oxford   English   Dictionary,

www.oed.com/view/Entry/100216 (last visited Jul. 17, 2015) (defining the formal or legal usage

of   “issue”     as    “[o]ffspring,      children”);       Issue,    Merriam-Webster’s      Dictionary,

http://www.merriam-webster.com/dictionary/issue (last visited Jul. 21, 2015) (defining “issue” as

one’s “offspring” or “progeny”).

       Michigan courts have consistently defined “issue” as one’s lineal descendants, both legal

and lay dictionaries reinforce that definition, and Michigan’s EPIC effects no change on that

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DeClercq v. Am. Diabetes Assoc. et al, No. 14-2416

point. We therefore apply it here and hold that DeClercq is not Bookmyer’s “issue.” DeClercq

is thus not entitled to inherit under the Trust agreement.

B. Bookmyer’s gift to the ADA-MI may properly pass to the ADA

       As an alternative theory, DeClercq argues that because the ADA-MI has been absorbed

into the national ADA and no longer exists as an independent entity, Bookmyer’s attempted

charitable bequest fails as a matter of law. But DeClercq acknowledges that the ADA-MI was

merged into the ADA, not simply dissolved. Under Michigan law, the surviving entity from a

corporate merger obtains all property and rights owned by each corporation that is a party to the

merger. Mich. Comp. Laws Ann. § 450.2724(b) (“The title to all real estate and other property

and rights owned by each corporation that is a party to the merger is vested in the surviving

corporation without reversion or impairment.”).

       Moreover, when charitable entities have merged, courts have held that the surviving

charity is entitled to receive the funds devised to a constituent entity named in a will or trust.

See, e.g., Cowden v. Sovran Bank/Cent. S., 816 S.W.2d 741, 743, 748 (Tenn. 1991) (holding that

the merger of an in-state charitable institution focused on agriculture with an out-of-state

charitable institution focused on healthcare would not bar the surviving corporation from

inheriting funds devised to the in-state institution in a will); In re Bodine’s Trust, 239 A.2d 315,

317-18 (Pa. 1968) (approving the bequest where the intended beneficiary of a trust—a woman’s

hospital—had been merged into a broader university hospital); Conn. Children’s Aid Soc’y.

v. Conn. Bank & Trust Co., 163 A.2d 317, 319-20 (Conn. 1960) (holding that the merger of two

charitable corporations would not bar the surviving corporation from receiving a benefit

designated under a charitable trust for a constituent charitable entity).

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       We see no reason to deviate from this logic here. The ADA is therefore the proper

recipient of the bequest to which the ADA-MI would have been entitled under the Trust

agreement.

                                     III. CONCLUSION

       For all of the reasons set forth above, we AFFIRM the judgment of the district court.

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