Court Opinion

ID: 2781855
Source: CourtListenerOpinion
Date Created: 2015-02-25 13:04:28.8338+00
Date Added: 2024-06-11T09:34:00.601330
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

RICHARD D. SHEAR,                                                     UNPUBLISHED
                                                                      February 24, 2015
               Plaintiff-Appellant,

v                                                                     No. 318996
                                                                      Ottawa Circuit Court
JERRY F. SHEAR,                                                       LC No. 13-003436-CZ

               Defendant-Appellee.

Before: SERVITTO, P.J., and STEPHENS and M. J. KELLY, JJ.

PER CURIAM.

        Plaintiff Richard D. Shear appeals as of right the trial court’s order granting defendant
Jerry F. Shear’s motion to transfer the case to the probate court. We affirm.

        Plaintiff and defendant are brothers; defendant is the trustee of a trust established by their
mother. On July 18, 2002, plaintiff and defendant, in his capacity as trustee, executed a
promissory note. The promissory note stated that money given to plaintiff between June 2001
and July 2002 was a loan to plaintiff from the trust, and that repayment was not expected until
the date of the distribution of the funds from the trust. The parties’ mother died on November 5,
2012. When plaintiff inquired about his expected inheritance via a distribution from the trust, he
was informed that he was not to receive any such distribution, presumably because of the
outstanding loan. Plaintiff filed the present action in the circuit court alleging that defendant
“violated his trustee and fiduciary duties and responsibilities in favor of his own self-interest, by
his theft of Plaintiff-Beneficiary’s Trust Fund monies.” In his prayer for relief, plaintiff sought
the formation of a constructive trust, the appointment of a new trustee, and that his son be named
beneficiary of the new trust. Defendant moved to have the action transferred to the probate
court, and the circuit court granted this motion. The only issue on appeal is whether the circuit
court properly found that the probate court had jurisdiction over the claims in plaintiff’s
complaint.

        The existence of subject-matter jurisdiction is a question of law that is reviewed de novo.
Midwest Energy Cooperative v Mich Public Serv Comm, 268 Mich. App. 521, 523; 708 NW2d
147 (2005). Generally, “[c]ircuit courts have original jurisdiction to hear and determine all civil
claims and remedies, except where exclusive jurisdiction is given in the constitution or by statute
to some other court.” MCL 600.605. “The probate court, on the other hand, is a court of limited
jurisdiction, deriving all of its power from statutes.” Manning v Amerman, 229 Mich. App. 608,

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611; 582 NW2d 539 (1998). The Estates and Protected Individuals Code, MCL 700.1101 et
seq., governs the circumstances in which a probate court has jurisdiction, and MCL 700.1302
addresses the exclusive jurisdiction of the probate court. Pursuant to this statute, the probate
court has “exclusive legal and equitable jurisdiction” over “[a] proceeding that concerns the
validity, internal affairs, or settlement of a trust; the administration, distribution, modification,
reformation, or termination of a trust; or the declaration of rights that involve a trust, trustee, or
trust beneficiary.” MCL 700.1302(b).

        In the present case, all of the claims in plaintiff’s complaint relate to the administration
and distribution of a trust. Specifically, plaintiff’s interest in this case is based entirely on his
role as a beneficiary of his mother’s trust and that defendant converted assets that rightfully
should have been distributed to him via that trust. MCL 700.1302(b)(vi) grants the probate court
jurisdiction in proceedings that involve the power, privilege, duty or right of a trustee’s actions.
The complaint states that it “is brought against Defendant Jerry F. Shear, who as the Trustee-
Executor of [his mother]’s estate, violated his trustee and fiduciary duties and responsibilities in
favor of his own self-interest, by his theft of Plaintiff-Beneficiary’s Trust Fund monies.” The
complaint alleges that plaintiff “was to receive a share of [his mother’s] estate via a Trust Fund,
as per express declaration of Settlor’s will,” and that defendant “completely purloin[ed] the trust
res of plaintiff’s trust fund by offsetting the trust against the worthless note, knowing there had
been no consideration given in exchange for the note, and contrary to the express intent of [his
mother]’s Will declaring a testamentary trust for the benefit of plaintiff-beneficiary.” Moreover,
all of the relief requested by plaintiff relates to the administration and distribution of the trust.
Although plaintiff attempts on appeal to couch his claims in terms of embezzlement, “this Court
will look beyond a plaintiff's choice of labels to the true nature of the plaintiff's claim.”
Manning, 229 Mich. App. at 613.

        Plaintiff’s argument that the probate court does not have exclusive jurisdiction over this
case because the case does not involve a determination of any issues with regard to the
settlement of the trust is not supported by the plain language of MCL 700.1302(b). In addition,
plaintiff’s reliance on People v Couzens, 480 Mich. 240; 747 NW2d 849 (2008), is misplaced
because there are no criminal charges pending based on the allegations in the complaint.

        Because all of the claims in plaintiff’s complaint relate to the administration and
distribution of his mother’s trust, we find that the probate court has exclusive jurisdiction over
the action pursuant to MCL 700.1302(b), and the circuit court properly dismissed plaintiff’s
complaint and transferred the case to the probate court.

       Affirmed.

                                                              /s/ Deborah A. Servitto
                                                              /s/ Cynthia Diane Stephens
                                                              /s/ Michael J. Kelly

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