Court Opinion

ID: 3174147
Source: CourtListenerOpinion
Date Created: 2016-02-05 08:39:50.928108+00
Date Added: 2024-06-11T14:57:11.671612
License: Public Domain

MAINE SUPREME JUDICIAL COURT                                     Reporter of Decisions
Decision: 2016 ME 26
Docket:   Ken-15-136
Argued:   November 3, 2015
Decided:  February 4, 2016

Panel:       SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and
             HUMPHREY, JJ.

                          FIDUCIARY TRUST CO. et al.

                                        v.

                        MANCHESTER H. WHEELER JR.

MEAD, J.

         [¶1] Manchester H. Wheeler Jr. appeals from a summary judgment entered

by the Superior Court (Kennebec County, Mullen, J.) in favor of Fiduciary Trust

Company on Fiduciary’s complaint to determine the proper method of distributing

the principal of a trust of which Wheeler is a beneficiary. On appeal, Wheeler

contends that the Superior Court erred in concluding that the doctrine of

res judicata did not control the construction of the disputed term of the trust. We

affirm the judgment.

                               I. BACKGROUND

         [¶2] The relevant facts in the summary judgment record are undisputed.

Fiduciary is the acting trustee of the Elizabeth S. Haynes and Robert H. Gardner

Trust, created in 1911 and amended in 1918. Pursuant to paragraph 1 of the trust,
2

the trust’s net income was to be paid to Elizabeth S. Haynes’s two daughters,

Hope Manchester Wheeler and Muriel Sturgis Haynes, or their issue. Paragraph 1

provides:

      During the continuance of the trust to pay the net income thereof as
      often as quarterly to Hope Manchester Wheeler and
      Muriel Sturgis Haynes in equal shares during their lives, and on the
      death of either of them who shall leave issue surviving her the share
      of said income which she would have received shall be paid to such of
      her issue by right of representation as shall from time to time be living
      at the respective times of payment and on the death of either of them
      leaving no issue surviving her as well as in the case of the issue of one
      of them becoming extinct, the whole of said income shall be paid to
      the other if living, or if she be dead to such of her issue by right of
      representation as shall from time to time be living at the respective
      times of payment.

(Emphasis added.)     Thus, upon the death of either of Elizabeth S. Haynes’s

daughters, the deceased daughter’s share of the income would be paid to her

“issue.”

      [¶3] The death of Hope Manchester Wheeler in 1955 triggered the need to

determine to whom her share of the income should be paid.               Through the

presentation of a bill in equity to the Supreme Judicial Court, Fiduciary petitioned

for the Court to determine whether the income should be paid only to Hope

Manchester Wheeler’s biological son, Manchester H. Wheeler, or whether the

income should be shared with Hope Manchester Wheeler’s adopted child, Hope
                                                                                                           3

Wheeler Brown.1            Fiduciary Trust Co. v. Brown, 152 Me. 360, 361, 364,

131 A.2d 191 (1957). Fiduciary also asked that we make the same determination

about where the income Muriel S. Haynes was receiving should be directed after

her death, because Muriel had no biological children but did have two adopted

children, Letitia Haynes and Honora Haynes. Id. at 364. We reviewed the trust as

a whole and concluded that, by using the word “issue,” the settlor, Elizabeth

S. Haynes, intended that the trust’s income distributions be made only to children

born to her daughters, thereby excluding Hope Manchester Wheeler’s adopted

child.2 Id. at 378-79. We noted, however, that because Muriel was alive at the

time of the decision, the contingency necessary to implicate a question concerning

the redirection of her share of the income distribution had not arisen. Id. at 370.

        [¶4]     Although paragraph 1 controls the distribution of trust income,

paragraph 2—which is at issue here—governs the distribution of principal upon
   1
       Fiduciary Trust Co. v. Brown, 152 Me. 360, 361, 131 A.2d 191 (1957), was presented to the
Supreme Judicial Court sitting in original jurisdiction through a bill in equity. At the time of the Court’s
decision in Brown, the Superior Court and the Supreme Judicial Court shared concurrent original
jurisdiction over equitable matters. See id. at 367 (“[T]he Supreme Judicial Court has authority to pass
upon the questions raised by the presentation of a bill in equity seeking the construction and interpretation
of the provisions of a trust indenture.” (quotation marks omitted)); Choate v. Adams, 387 A.2d 227, 228
(Me. 1978) (“A ‘bill in equity’ could only be commenced either in the Superior Court or in the Supreme
Judicial Court, which at that time shared concurrent original jurisdiction in all cases and proceedings in
equity.”); Gerrish v. Lovell, 146 Me. 92, 96, 77 A.2d 593 (1951) (“[T]here remains in the
Supreme Judicial Court jurisdiction and power to hold nisi prius sessions when occasion requires in
matters over which that court now has original jurisdiction.”).
   2
     Hope Manchester Wheeler adopted her grandchild, Hope Wheeler Brown. Brown, 152 Me. at 362,
131 A.2d 191. We noted, however, “[t]hat in this particular case, Hope Wheeler Brown happens to be a
blood descendant of the settlor is of no consequence as to the real issue before us for determination.” Id.
at 378.
4

the trust’s termination. Paragraph 2 provides, in pertinent part, “[t]wenty-one

years after the death of the survivor of [Elizabeth S. Haynes’s two daughters] and

of Manchester Haynes Wheeler [Sr.] the principal . . . shall be paid over to the

persons . . . to whom and in which it would then have been distributed under the

intestate laws of Maine then in force . . . .”3 (Emphasis added.)                                  Unlike

paragraph 1, paragraph 2 does not rely on the word “issue”; instead, it defers to

state intestacy laws to determine beneficiaries at the time of termination.

          [¶5] The trust terminated on December 26, 2013. On February 21, 2014,

Fiduciary filed a complaint in the Kennebec County Probate Court asking that

court to determine whether adopted children are entitled to a share of the principal

pursuant to paragraph 2.                   The case was subsequently removed to the

Superior Court.           On September 29, 2014, Fiduciary moved for a summary

judgment on the ground that paragraph 2 invokes Maine intestacy laws applicable

at the time of the termination, and 2013 Maine intestacy laws provided (and still

provide) that adopted children inherit from or through their adoptive parents just as

biological         children      inherit   from      or    through      their     biological      parents.

    3
        Paragraph 2 provides in full:

          Twenty-one years after the death of the survivor of them and of
          Manchester Haynes Wheeler the principal of the fund whether said Elizabeth S. Haynes
          be then living or not shall be paid over to the persons and in the proportions to whom and
          in which it would then have been distributed under the intestate laws of Maine then in
          force if it had then been personal property and said Elizabeth S. Haynes had then owned
          it in her own right and had then died intestate.
                                                                                    5

See 18-A M.R.S. § 2-109(1) (2013) (“An adopted person is the child of an

adopting parent . . . .”).

        [¶6]      Thus, pursuant to Fiduciary’s proposed distribution scheme,

Honora Haynes, the only living adopted child of Muriel S. Haynes and the only

living person in her generation, would receive one-third of the trust principal.

Wheeler, the biological great grandson of the settlor,4 objected to this distribution,

contending that our 1957 decision in Brown, through the doctrine of res judicata,

precluded the trial court from applying 2013 Maine intestacy laws because it had

already been determined that Elizabeth S. Haynes did not intend to benefit adopted

children. On February 27, 2015, the Superior Court granted Fiduciary’s motion for

summary judgment, reasoning that res judicata did not prevent it from applying

paragraph 2 of the trust because Brown only controlled paragraph 1. Wheeler

appealed.

                                        II. DISCUSSION

        [¶7] Wheeler contends that the court erred in entering a summary judgment

in favor of Fiduciary because both the claim- and issue-preclusion prongs of the

res judicata doctrine prevented the Superior Court from applying paragraph 2 of

the trust.

  4
      Wheeler is also the grandson of Hope Manchester Wheeler.
6

      [¶8] “We review the grant of a motion for summary judgment de novo,

viewing the evidence in the light most favorable to the party against whom the

summary judgment has been granted in order to determine if there is a genuine

issue of material fact.”     Brady v. Cumberland Cty., 2015 ME 143, ¶ 10,

126 A.3d 1145 (quotation marks omitted).

      [¶9] “The intent of the settlor, as determined by unambiguous language in

the will, is a question of law that we review de novo.” White v. Fleet Bank of Me.,

2005 ME 72, ¶ 19, 875 A.2d 680. “The settlor’s intent is gathered from the whole

will.” In re Pike Family Trusts, 2012 ME 8, ¶ 7, 38 A.3d 329 (quotation marks

omitted). “A court must interpret the will within the four corners of the document

but may use the context of the entire will to interpret specific sections.” Id.

(quotation marks omitted).

      [¶10] The two branches of the res judicata doctrine are claim preclusion and

issue preclusion. In re M.M., 2014 ME 15, ¶ 15, 86 A.3d 622. Claim preclusion

prevents “the relitigation of claims if: (1) the same parties or their privies are

involved in both actions; (2) a valid final judgment was entered in the prior action;

and (3) the matters presented for decision in the second action were, or might have

been, litigated in the first action.” Id. (quotation marks omitted). Issue preclusion,

also known as collateral estoppel, “prevents the relitigation of factual issues

already decided if the identical issue was determined by a prior final judgment, and
                                                                                  7

the party estopped had a fair opportunity and incentive to litigate the issue in a

prior proceeding.” Portland Water Dist. v. Town of Standish, 2008 ME 23, ¶ 9,

940 A.2d 1097 (quotation marks omitted). We address the applicability of claim

preclusion and issue preclusion in turn.

      [¶11]    There is no dispute that the first and second elements of claim

preclusion are satisfied here because Brown resulted in a final judgment involving

Fiduciary and the privies of Wheeler. The controversy, therefore, is whether the

meaning of paragraph 2 was, or might have been, litigated in Brown, and whether

our decision in that case resolved that issue.

      [¶12] In Brown, we determined that “[t]he word ‘issue’ as used in wills and

in trust indentures is an ambiguous term [because] [i]t has been given various

interpretations by different courts depending upon existing statutes and varying

circumstances.” Brown, 152 Me. at 371, 131 A.2d 191. To determine the settlor’s

intent underlying paragraph 1, we reviewed the entire trust, including

paragraphs 1, 2, and 7, and the 1918 amendment to the trust.         Id. at 370-71

(“Intention must be found in the language of the will read as a whole illumined in

cases of doubt by the light of circumstances surrounding its execution.”) (quotation

marks omitted).
8

      [¶13] Although paragraph 2 was mentioned in Brown, the construction of

that paragraph was outside the scope of our ultimate holding. We made clear that

our decision addressed only the meaning of “issue” in paragraph 1, stating,

      This conclusion is limited to a determination that Hope Wheeler
      Brown is not the “issue” of her adoptive mother, within the meaning
      and intent of the trust indenture we are asked to construe and interpret,
      and has no bearing or effect on any of the rights of [the adopted
      daughter] as a lineal descendant by blood of [the settlor].

Id. at 379.    Indeed, we refused to resolve any other questions based on

contingencies that had not yet occurred, saying,

      While this court may have the power to answer questions of
      construction of a will or trust indenture before a contingency occurs,
      we prefer to abide by the rule . . . [that] we do not think it wise . . . to
      advise trustees, and to construe wills for their guidance until the time
      comes when they need instructions. The fact that the question may
      arise sometime in the future is ordinarily not enough. Such a question
      should not be decided until the anticipated contingency arises, or at
      least until it is about to arise, until it is imminent.

Id. at 370 (citations omitted) (quotation marks omitted).

      [¶14] Paragraph 2 was necessarily outside the scope of our holding because

the contingency necessary for paragraph 2 to apply is the termination of the trust,

and that did not occur until more than fifty years after our decision in Brown.

Because paragraph 2 involves intestacy laws that would be in effect at the time of

termination, and because the time of termination was unknowable at the time of
                                                                                       9

our decision in Brown, we did not construe—and could not have construed—

paragraph 2. Claim preclusion, therefore, is inapplicable.

        [¶15] Wheeler also argues that issue preclusion applies here because

“[w]hether the [s]ettlor intended to benefit just her biological descendants or

whether she intended to benefit both biological and adopted descendants also is,

once again, the principal issue in the instant case.” This argument is also not

persuasive because the determination of a settlor’s intent is a question of law,

whereas issue preclusion is predicated on the determination of factual issues. See

Portland Water Dist., 2008 ME 23, ¶ 9, 940 A.2d 1097 (“Issue preclusion, or

collateral estoppel, prevents the relitigation of factual issues already decided . . . .”

(quotation marks omitted)); White, 2005 ME 72, ¶ 19, 875 A.2d 680 (“The intent

of the settlor, as determined by unambiguous language in the will, is a question of

law . . . .”).

        [¶16] Wheeler’s argument that we should review paragraph 2 through the

lens of our 1957 decision (i.e., that the settlor’s intent was to exclude adopted

children from the periodic net income payments from the trust) would require us to

(1) examine intent regarding language that is unambiguous on its face; and

(2) assume that the settlor did not wish for adopted children to share in the ultimate

distribution of trust principal.    Neither requirement is supported by law.         By

referring to and relying on future intestacy laws, rather than using the word
10

“issue,” paragraph 2 is unambiguous. The provision that “the principal . . . shall be

paid over to the persons . . . to whom and in which it would then have been

distributed under the intestate laws of Maine then in force” clearly provides that

the intestacy laws in effect at the time of termination govern the distribution of

trust principal. The 2013 Maine intestacy laws effective at the time of the trust’s

termination unequivocally provided that adopted children inherit from or through

their adoptive parents just as biological children do. See 18-A M.R.S. § 2-109(1)

(“An adopted person is the child of an adopting parent . . . .”). We have no basis to

question the intention of the settlor of a trust where, as here, the terms are

unambiguous.

      [¶17] The Superior Court correctly entered a summary judgment in favor of

Fiduciary because (1) res judicata does not preclude the application of paragraph 2

and (2) no genuine issue of material fact exists with regard to the unambiguous

terms of paragraph 2.

      The entry is:

                      Judgment affirmed.

On the briefs:

      Michael L. Rair, Esq., Law Offices of Michael L. Rair, Bangor,
      R. Howard Lake, Esq., Lake & Denison, Winthrop, and John E.
                                                                         11

        Nale, Esq., Nale Law Offices, Waterville, for appellant
        Manchester H. Wheeler Jr.

        Brendan P. Reilly, Esq., and Tudor N. Goldsmith, Esq. Jensen
        Baird Gardner & Henry, Portland, for appellee Honora Haynes

At oral argument:

        Michael L. Rair, Esq., for appellant Manchester H. Wheeler Jr.

        Brendan P. Reilly, Esq., for appellee Honora Haynes

Kennebec County Superior Court docket number CV-2014-64
FOR CLERK REFERENCE ONLY