Court Opinion

ID: 4316498
Source: CourtListenerOpinion
Date Created: 2018-09-28 14:39:20.910102+00
Date Added: 2024-06-11T14:45:03.971948
License: Public Domain

09/27/2018
               IN THE COURT OF APPEALS OF TENNESSEE
                           AT NASHVILLE
                                  June 5, 2018 Session

                IN RE ESTATE OF IVY LONZO ARMSTRONG

                 Appeal from the Probate Court for Dickson County
                    No. 04-14-068-P   Michael R. Meise, Judge
                     ___________________________________

                           No. M2017-00341-COA-R3-CV
                       ___________________________________

Heirs of intestate decedent appeal the probate court’s construction and interpretation of a
trust agreement established by the decedent’s wife and the decedent’s wife’s will. The
trust terminated at the death of the decedent and court awarded the assets remaining in
the trust in accordance with the residual clause of the decedent’s wife’s will, rather than
allowing the assets to go to Husband’s estate, as sought by the decedent’s heirs. We
conclude that the trial court’s construction and interpretation of the instruments and
distribution of assets aligns with the decedent’s wife’s expressed intent and accordingly,
affirm the judgment.

 Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Probate Court Affirmed;
                                 Case Remanded

RICHARD H. DINKINS, J., delivered the opinion of the court, in which ANDY D. BENNETT
and JOHN WESLEY MCCLARTY, JJ., joined.

Ryan P. Durham, Charles W. Holt, Jr., Ben Boston, and Cameron Hoffmeyer,
Lawrenceburg, Tennessee; C. Anthony Edwards and Jeremy W. Prince, Columbia,
Tennessee; for the appellants, Sheila Southern, Betty Lightfoot, Jeffrey Alan Armstrong,
Shawn Aitken, Brenda Moss, Billy E. Marlin, Sandra Diane Lindsey, Peggy Faye
Stephenson, Maxie Leon Gidcomb, Johnny Gidcomb, James Gidcomb, Judy K. Victory,
Jerry Armstrong, Betty Jean Hudson, Glenda Sue Armstrong Hayes, Teresa Lawrence,
Linda Armstrong Noland, Annie Vaughn, Marjorie R. Hale, Patricia Ann Stephens,
David Holland, Carolyn Albert, Anita Walls, Wilma Dean Armstrong Story, Mylysia
Spann, Billy J. Holland, Jane Lowe, Bobby Armstrong, Melissa Parker-Schyll, Michael
Ray Armstrong,

Bruce N. Oldham, Gallatin, Tennessee, for the appellants, Patricia Lynn Gidcomb,
Rhonda Gidcomb Oldham, D. Lee McGahey, and Russell Whittaker.
Benjamin C. Regen, Dickson, Tennessee, for the appellee, Ralph Armstrong, Trustee of
the Allene and Ivy Armstrong Living Trust.

Radford H. Dimmick, Nashville, Tennessee, for the appellees, Joan Theis, Kevin Adcox,
and Sandra Sage.

Andra Hedrick, Nashville, Tennessee, Special Fiduciary.

                                            OPINION

I.     FACTUAL AND PROCEDURAL HISTORY

        This appeal involves a dispute between the heirs of Ivy Lonzo Armstrong
(“Decedent”), who died intestate in Dickson County on March 23, 2014, and the
Administrator of his estate. Mr. Armstrong’s spouse, Marion Allene Adcox Armstrong,
predeceased him, and he died without issue, leaving the children of his 10 brothers and
sisters as his heirs at law.

       Prior to her death, Allene Armstrong had established The Allene and Ivy
Armstrong Living Trust in 2011, naming Ivy Armstrong’s great nephew, Ralph
Armstrong, as Trustee. The trust estate consisted of many pieces of real property and an
investment account, and the income from the trust was to be used “to pay the living
expenses, health care and maintenance as may be required for Settlor and her husband,
Ivy Armstrong.” Section XIII of the trust, which reads, “Upon the death of Settlor and
Settlor’s spouse, the Trustee shall distribute the remaining Trust Assets as provided in my
Last Will and Testament,” is at issue in this case.

       Ivy Armstrong had appointed Allene Armstrong and Ralph Armstrong as his
attorneys-in-fact by a power of attorney he executed January 5, 2010; Ralph Armstrong
opened a probate estate for Ivy Armstrong on April 23, 2014,1 and was appointed as
Administrator. On the motion of the Administrator, a guardian ad litem was appointed to
investigate and report to the probate court the identity and location of any heirs.

       In April 2015, the Administrator filed a Final Settlement of the estate; two of the
Decedent’s heirs, Shelia Southern and Betty Lightfoot, filed exceptions to the Final
Settlement, asserting: that the Administrator had a conflict of interest; that the Decedent
was mentally incompetent at the time he executed the Power of Attorney appointing
Ralph Armstrong and Allene Armstrong to act as his attorneys in fact; that the Power of
Attorney did not grant Ralph Armstrong the authority to make gifts of the Decedent’s

1
 Letters of Administration were issued again March 19, 2015; it is not clear from the record why they
were issued twice.

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assets; and that the assets of The Allene and Ivy Armstrong Living Trust should have
been accounted for in the Decedent’s estate. In response, the Administrator contended
that the court lacked subject matter jurisdiction “over issues regarding the Allene and Ivy
Armstrong Living Trust and/or the Power of Attorney executed by Ivy Armstrong.”

        On August 31, 2015, Ms. Southern and Ms. Lightfoot moved to have Ralph
Armstrong removed as Administrator; Patricia Gidcomb and Rhonda Gidcomb Oldham,
other heirs of the Decedent, filed a notice of appearance as well as a “Response in
Support of Motion to Remove Administrator.” The Court granted the motion, holding
that “it is in the best interest of all the beneficiaries to remove the current administrator,
appoint a special fiduciary to serve as administrator, and order the administrator to do a
detailed accounting of the Ivy and Marion Armstrong Trust.” The court appointed
Attorney Andra Hedrick as Special Fiduciary.

       In due course, other heirs at law of Ivy Armstrong and of Allene Armstrong joined
in the proceeding;2 the parties stipulated to certain facts and the authenticity of certain
documents in order for the court to determine (a) whether it had subject matter
jurisdiction over the Trust and (b) the proper disposition of the remaining assets of the
Trust. The documents stipulated to by the parties included the Power of Attorney
executed by Decedent, the Trust agreement for the Allene and Ivy Armstrong Living
Trust, three quitclaim deeds from Ivy and Allene to the trust, and seven warranty deeds
bearing dates from January 2015 to June 2015 from Ralph Armstrong as trustee of The
Allene and Ivy Armstrong Living Trust to various buyers.

       By order entered December 20, 2016, the court concluded that it had subject
matter jurisdiction to interpret both the trust and the will of Allene Armstrong as part of
the probate of the Ivy Armstrong estate due to the possibly conflicting provisions
between Section XIII of the trust, directing that the assets be distributed according to
Allene’s will, and Article VII of her will, which left her estate to her brother, Glen
Adcox, sisters, Joan Theise and Sandra Sage, and great nephews, James Gidcomb and
Ralph Armstrong. The court construed the trust and Allene Armstrong’s will together
and held that the trust assets should be distributed in accordance with Allene Armstrong’s
will.

2
  In addition to Ralph Armstrong, Ms. Southern and Ms. Lightfoot, the heirs of Ivy Armstrong
participating in this proceeding are: Jeffrey Alan Armstrong, Shawn Aitken, Brenda Moss, Billy E.
Marlin, Sandra Diane Lindsey, Peggy Faye Stephenson, Maxie Leon Gidcomb, Johnny Gidcomb, James
Gidcomb, Judy K. Victory, Jerry Armstrong, Betty Jean Hudson, Glenda Sue Armstrong Hayes, Teresa
Lawrence, Linda Armstrong Noland, Annie Vaughn, Marjorie R. Hale, Patricia Ann Stephens, David
Holland, Carolyn Albert, Anita Walls, Wilma Dean Armstrong Story, Mylysia Spann, Billy J. Holland,
Jane Lowe, Bobby Armstrong, Melissa Parker-Schyll, Michael Ray Armstrong. The heirs of Allene
Armstrong participating in this proceeding are Joan Theis, Kevin Adcox, and Sandra Sage.

                                                3
       Ms. Southern, Ms. Lightfoot, and other heirs of Ivy Armstrong (“the Southern and
Lightfoot Appellants”), along with another group of Ivy Armstrong’s heirs (“the
Gidcomb Appellants”) moved to have the court deem its order final and appealable or
grant them leave to file an interlocutory appeal; the court designated the December 20,
2016 order as a final order for purposes of appeal pursuant to Rule 54.02 of the
Tennessee Rules of Civil Procedure.

      The Gidcomb Appellees articulate the following issues for our review:

   1. Whether the trial court erred by holding that the individuals listed in Section VII
      of the spouse’s will were intended to receive the residue of the trust assets in the
      event that the spouse predeceased her husband, despite the fact that Article VII
      states that it applies “if my Husband does not survive me.”
   2. Whether the Power of Attorney executed by the Decedent authorized the
      attorneys-in-fact to transfer substantially all of the Decedent’s assets to a trust
      established by the Decedent’s spouse.
   3. Whether the transfer of substantially all of the Decedent’s assets to a trust created
      by the Spouse was a fraudulent conveyance to defeat the Decedent’s elective
      share.

The Southern and Lightfoot Appellants state their issues thusly:

   1. Whether the trial court erred in failing to find that all property, real and personal,
      purportedly conveyed to the trust with no consideration by Mr. Armstrong’s
      attorney(s) in fact cannot be assets of the trust and must, instead, be assets of his
      estate where (i) said property was marital with survivorship interest, (ii) Mr.
      Armstrong’s power of attorney did not expressly include the authority to gift, and
      (iii) the record contains no evidence of Mr. Armstrong’s history of making or
      joining in the making of lifetime gifts.
   2. Whether the trial court erred in ignoring or failing to give effect to a condition
      precedent by which the appellees may have taken as beneficiaries had the
      condition occurred where the condition did not occur.
   3. Whether the trial court erred in not construing the will as creating partial intestacy
      where the operative provisions of the will and trust fail to dispose of Mrs.
      Armstrong’s residual estate.
   4. Whether the trial court erred in applying the time limit for seeking an elective
      share as a limitation on the appellants’ claims of fraudulent conveyance.
   5. Whether the trial court erred in not adequately providing its findings of fact and
      conclusions of law as to all legal issues before it.

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The Appellee, Ralph Armstrong, also raises several issues for our review:3

      1. Should the trial court be affirmed because the Appellants have waived appellate
         review of their claim by failing to provide evidence establishing a factual basis for
         their claims?
      2. Should the trial court be affirmed because the Conveyances are not void or
         voidable as fraudulent in respect of any person's interests?
      3. Should the trial court be affirmed because the Conveyances were within the scope
         of powers granted by the Power of Attorney to the attorney-in-fact?
      4. Should the trial court be affirmed because the Conveyances were not the result of
         undue influence exercised by a person in a position of dominion and control over
         Ivy Armstrong?
      5. Should the trial court be affirmed because the Property did not vest in Ivy
         Armstrong by reason of partial intestacy in Allene Armstrong’s estate?

II.      ANALYSIS

       The threshold question presented in this appeal is whether the assets remaining in
The Allene and Ivy Armstrong Living Trust are part of Ivy Armstrong’s estate. The
parties stipulated in the trial court to the relevant facts; the resolution of the appeal calls
for us to construe the pertinent provisions of the trust and Allene Armstrong’s will. The
construction of these instruments is a matter of law which we review de novo, with no
presumption of correctness afforded the trial court’s conclusions. See In re Estate of
McFarland, 167 S.W.3d 299, 302 (Tenn. 2005) (citing In re Estate of Vincent, 98 S.W.3d
146, 148 (Tenn. 2003)).

        “[T]he important thing in the construction of the trust instrument is to determine
the intention of the settlor as evidenced by all the provisions of the instrument, giving no
portion any greater emphasis than any other.” Marks v. S. Tr. Co., 310 S.W.2d 435, 438
(1958). Similarly, “the intent of the testator is the most important factor in will
construction cases. The court must give effect to that intent unless it contravenes some
rule of law or public policy.” In re Tipler, 10 S.W.3d 244, 249 (Tenn. Ct. App. 1998)
(citing Third Nat’l Bank v. First American Nat’l Bank, 596 S.W.2d 824, 828 (Tenn.
1980)). In construing a will, “‘[t]he testator’s intention is to be ascertained from the
particular words used in the will itself, from the context in which those words are used,
and from the general scope and purposes of the will, read in the light of the surrounding
and attending circumstances.’” In re Tipler, 10 S.W.3d at 249 (quoting Presley v. Hanks,
782 S.W.2d 482, 487 (Tenn. Ct. App. 1989)); see also In re Estate of McFarland, 167
S.W.3d at 302; Daugherty v. Daugherty, 784 S.W.2d 650, 653 (Tenn. 1990).

3
 The other appellees in this case, Joan Theis, Kevin Adcox, and Sandra Sage, have adopted Ralph
Armstrong’s statement of the issues and brief.
                                               5
      Allene Armstrong established the trust and executed her Will on the same day,
September 26, 2011. The relevant provisions of the trust provide:

                  Section IV. Disposition of Income and Principal

      After paying the necessary expenses incurred in the management and
      investment of the Trust estate, including compensation of Trustee for
      Trustee’s own services, Trustee shall pay the net income of the Trust and
      distribute the principal of the Trust in the following manner.

      A. All income from the Trust shall be used to pay the living expenses,
      health care and maintenance as may be required for Settlor and her
      husband, IVY ARMSTRONG. The Trustee shall manage the Trust assets
      using the Prudent Man Rule to preserve the principal and generate such
      reasonable income as can be reasonably expected under current economic
      condition to produce an income stream to meet the living expenses of
      Settlor and her spouse. To the extent that Settlor’s and IVY
      ARMSTRONG’S income is not sufficient to meet their needs, the Trustee
      can utilize the principal to the extent he deems necessary.

      B. The Trustee shall invade the corpus to the extent necessary to provide
      for the comfortable health, welfare and maintenance of Settlor and her
      spouse. In the event Settlor shall predecease her spouse, the Trustee shall
      utilize the Trust income and assets for Settlor’s spouse to meet his
      reasonable and necessary living expenses.

                   Section V. Invasion of Principal for Benefit of
                    Settlor’s Surviving Spouse and Descendants

      After Settlor’s death, Trustee may apply so much of the principal of the
      Trust for the use of Settlor's spouse, IVY ARMSTRONG, at such time or
      times as, in Trustee’s discretion, Trustee may deem advisable for his proper
      maintenance, health, or support. The provisions of this Section are intended
      primarily as a means of affording financial assistance to Settlor’s spouse.
      This enumeration is to serve only as a guide and shall not be construed to
      restrict the discretionary powers so conferred on Trustee.

                            Section VI. Powers of Trustee

      Trustee shall have all of the powers enumerated in Tennessee Code
      Annotated, Sections 35-50-109 and 35-50-110, et seq.; and the introductory
      paragraph and all subparagraphs thereof are hereby incorporated herein by
      reference as fully as though copied herein verbatim. The Trustee shall have
                                           6
       full power to perform and to take all steps as may be necessary to insure
       that the Trust assets are used for the Settlor and her spouse’s healthcare
       expenses, welfare and maintenance, this being the paramount consideration
       and purpose of this Trust.

       ***

                Section XIII. Distribution of Trust Assets Upon Death
                           of Settlor and Settlor’s Spouse

       Upon the death of Settlor and Settlor’s spouse, the Trustee shall distribute
       the remaining Trust assets as provided in my Last Will and Testament.

(Emphasis added.)

        Section IV of the trust, quoted above, sets forth that the purpose of the trust was to
pay for the living expenses of Allene and Ivy Armstrong during their lives. If Allene
predeceased Ivy, Section V allowed that the trust would continue to pay his living
expenses in the same manner, and upon Ivy’s death, the remaining trust assets were to be
distributed as provided in Allene’s will. There is no provision in the trust that supports a
conclusion that Allene intended that the assets of the trust would be a devise to Ivy at any
time; indeed, Section V demonstrates a contrary intent, i.e., that the trust would terminate
at his death, and the assets be distributed in accordance with her will. We proceed to
examine the provisions of the will to determine if there is any intent shown that the assets
in the trust be distributed to Ivy Armstrong or his heirs.

       Article V of the will, provides:

       If my husband, IVY ARMSTRONG, survives me, I devise and bequeath all
       the rest and residue of my estate, real, personal and mixed, of whatever
       kind and character and wheresoever situate, to “The Allene and Ivy
       Armstrong Living Trust dated September 26, 2011” to be held and
       administered as more fully described in the Living Trust.

Three other provisions of the will are pertinent to our inquiry in this regard. In Article
IV, Allene Armstrong acknowledges that Ivy Armstrong is her husband, that they have
no children, and that, in making her will, she has “considered all of my husband’s heirs
and all of my heirs.” In Article VI, prefaced by the phrase “[i]f my husband does not
survive me,” Ms. Armstrong makes a specific bequest of real property and a shop
building, contents, and equipment to Ralph Armstrong. Article VII provides that “[i]f my
husband does not survive me . . . I devise and bequeath all the rest and residue of my
estate, including the residue of any trust assets held in ‘The Allene and Ivy Armstrong
Living Trust,’” to her brother and one sister (25 percent each), another sister and a great-
                                             7
nephew (12.5 percent each) and Ralph Armstrong (25 percent). Considering these
provisions of the will in conjunction with the intent expressed in the trust instrument, we
conclude that the assets of the trust should be distributed to the Appellees.

       Appellants argue that the trust and will failed to fully dispose of the residue of the
trust assets in the event that Allene predeceased Ivy, and that, because there was no
provision in either the will or the trust providing for the distribution of the assets at the
death of Ivy, the assets passed to him under the laws of intestacy. We do not agree with
appellants’ construction of the documents. When created, the trust was intended to
provide for the needs and living expenses for both Allene and Ivy during their lifetimes;
the trust was to terminate at the death of the survivor and any remaining assets be
distributed according to Allene’s will. The devise in Section VII is consistent with that
intent. There is no basis, in fact or in law, to conclude that Ivy Armstrong had a right of
inheritance to the assets in the trust estate as surviving spouse of Allene.

       Appellants also urge us to conclude that some of the parcels of real property,
which were jointly owned by Ivy and Allene Armstrong and conveyed to the trust, were
not actually trust assets because the property was fraudulently conveyed through the
power of attorney executed by Ivy Armstrong. Upon our review of the deeds referenced
by appellants, as well as the stipulations upon which the case was tried, we fail to discern
any proof to support a finding of fraud in any respect.

       Our resolution of these issues pretermits our consideration of the remaining issues
raised by the parties.

III.   CONCLUSION

      For the foregoing reasons, we affirm the trial court’s holding that the trust assets
should be distributed to the persons listed in the Article VII of Allene Armstrong’s will
and remand the case for further proceedings in accordance with this opinion.

                                                  _________________________________
                                                  RICHARD H. DINKINS, JUDGE

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