Lampe v. Lampe ( 2021 )

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
In the Matter of the Estate of:
JOSEPH O. LAMPE, Deceased.
_________________________________
MARK WARREN LAMPE, et al., Plaintiffs/Appellants,
v.
MARGUERITE “SHAWN” LAMPE, Defendant/Appellee.
No. 1 CA-CV 20-0620
No. 1 CA-CV 20-0711
(Consolidated)
FILED 9-21-2021
Appeal from the Superior Court in Maricopa County
No. PB2019-002310
The Honorable Julie Ann Mata, Judge
AFFIRMED IN PART; VACATED AND REMANDED IN PART
COUNSEL
The Law Office of Christopher Goodman, Phoenix
By Christopher M. Goodman
Counsel for Plaintiffs/Appellants
Snell & Wilmer LLP, Phoenix
By Kevin J. Parker, Robin L. Miskell
Co-Counsel for Defendant/Appellee
Tiffany & Bosco, P.A., Phoenix
By James Fassold, Elise B. Adams
Co-Counsel for Defendant/Appellee
MEMORANDUM DECISION
Judge Maria Elena Cruz delivered the decision of the Court, in which
Presiding Judge Cynthia J. Bailey and Judge Jennifer M. Perkins joined.
C R U Z, Judge:
¶1 Mark Warren Lampe and Craig Stryker Lampe (“Plaintiffs”)
appeal from two superior court orders granting summary judgment in
favor of Marguerite “Shawn” Lampe, as Trustee of the JSL Trust and
Personal Representative of the Estate of Joseph O. Lampe (“Shawn”).1 For
the reasons below, we affirm the summary judgment on the statute of
limitations and the related fee award but vacate the summary judgment on
the no-contest clause and remand for further proceedings.
FACTUAL AND PROCEDURAL HISTORY
¶2 In 2016, after approximately twenty-eight years of marriage,
Joseph and Shawn created the JSL Trust (“the Trust”). The Trust was
revocable but became irrevocable upon Joseph’s death. See JSL Trust § 1.5.
Joseph died on January 25, 2018. Joseph had three adult sons: Scott, Mark,
and Craig Lampe; and Shawn has one adult son, Anthony Garcia.
¶3 Plaintiffs were qualified beneficiaries of the Trust and
received a letter from Shawn’s attorney dated October 17, 2018, nearly nine
months after Joseph died, that included copies of his Will and the Trust.
According to Plaintiffs, Shawn refused to provide additional information
about the Trust despite several requests from late 2018 through 2019. As a
result, Plaintiffs hired an attorney in July 2019, who formally requested
more information from Shawn’s attorney on August 19, 2019. Claiming
1 We refer to the parties and decedent by their first names when
necessary, to avoid confusion.
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Shawn failed to provide the requested information, Plaintiffs petitioned to
formally probate the Will and contested the validity of the Trust. Plaintiffs
alleged that the one-year statute of limitations in Arizona Revised Statutes
(“A.R.S.”) section 14-10604(A) did not bar their claim and that the Trust’s
no-contest clause was unenforceable because they had probable cause to
challenge the Trust based on evidence that Joseph lacked testamentary
capacity and that Shawn exerted undue influence.2
¶4 Shawn responded and moved for summary judgment on the
ground that the one-year statute of limitations in § 14-10604(A)(1) barred
Plaintiffs’ challenge to the Trust. The superior court agreed, and after
denying Plaintiffs’ motion for reconsideration, entered judgment in favor
of Shawn on Plaintiffs’ challenge to the validity of the Trust and awarded
Shawn $30,832.50 in attorneys’ fees. Plaintiffs timely appealed from this
judgment.
¶5 Shawn also moved for summary judgment to enforce the
Trust’s no-contest clause. See JSL Trust § 12.1. Plaintiffs argued that the no-
contest clause was unenforceable because they had probable cause to
challenge the validity of the Trust and the application of the one-year
statute of limitation. The superior court found that Plaintiffs lacked
probable cause to challenge the Trust because their petition was time-
barred. The court granted summary judgment, enforced the no-contest
clause, and removed Plaintiffs as beneficiaries. Plaintiffs appealed from
this judgment, and both appeals were consolidated.
DISCUSSION
¶6 Summary judgment is proper only when “the moving party
shows that there is no genuine dispute as to any material fact and . . . is
entitled to judgment as a matter of law.” Ariz. R. Civ. P. 56(a). The superior
court should grant summary judgment “if the facts produced in support of
the claim or defense have so little probative value, given the quantum of
evidence required, that reasonable people could not agree with the
conclusion advanced by the proponent of the claim or defense.” Orme
School v. Reeves, 166 Ariz. 301, 309 (1990). We view the evidence in the light
most favorable to the parties against whom judgment was entered and
2 The no-contest provision applied if a beneficiary contested or sought
to invalidate the Will or Trust, claimed an oral agreement that contradicts
the Will or Trust, sought to change the character of property subject to the
Will or Trust, or conspired with or financially assisted any of these actions.
See JSL Trust § 12.1.
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review de novo whether genuine issues of material fact exist and whether
the superior court properly applied the law. Awsienko v. Cohen, 227 Ariz.
256, 258, ¶ 7 (App. 2011).
I. The Statute of Limitations
A. The Statute of Limitations Applies to the Trust
¶7 The superior court held that the one-year statute of limitations
in A.R.S. § 14-10604(A) barred Plaintiffs’ challenge to the validity of the
Trust. Citing In re Estate of Sibley, 246 Ariz. 498, 501, ¶ 10 (App. 2018),
Plaintiffs argue that § 14-10604(A) does not apply because the Trust became
irrevocable upon Joseph’s death.
¶8 Section 14-10604(A) states:
A person may commence a judicial proceeding to contest the
validity of a trust that was revocable at the settlor’s death
within the earlier of:
1. One year after the settlor’s death.
2. Four months after the trustee sent the person a copy of
the trust instrument and a notice informing the person
of the trust’s existence, of the trustee’s name and
address and of the time allowed for commencing a
proceeding.
This statute, like § 604 of the Uniform Trust Code (“U.T.C.”) on which it is
based, “applies only to a revocable trust that becomes irrevocable by reason
of the settlor’s death.” U.T.C. § 604, cmt. (2000). The Trust was revocable
until Joseph’s death and thereafter became irrevocable. See JSL Trust § 1.5.
¶9 Contrary to Plaintiffs’ assertions, Sibley, 246 Ariz. at 501, ¶ 10,
is not analogous. In Sibley, the trust was revocable before the settlor’s death,
but the beneficiary challenged co-trustees’ attempt to alter the trust after it
became irrevocable, thus § 14-10604 did not apply. Id. at 500-01, ¶¶ 4, 10.
The co-trustees in Sibley restated the original trust into a second trust and
sought approval of the restated trust, but one beneficiary objected. Id. at
¶ 8. The co-trustees argued that § 14-10604 barred the beneficiary’s
objection. Id. at 501, ¶ 10. The beneficiary, however, had not challenged
the original trust; instead, he challenged the restated trust, which had
become irrevocable after the settlor’s death. Id. Because the statute of
limitations in § 14-10604 applies only to revocable trusts, the court held that
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it did not bar the beneficiary’s challenge to the restatement of the trust after
it had become irrevocable. Id.3
¶10 In contrast, here, Plaintiffs’ petition challenged the original
Trust, which was revocable until Joseph’s death. Because they filed the
petition more than one year after Joseph’s death, it was untimely under
§ 14-10604(A)(1).
B. No Exceptions to the Statute of Limitations Apply
¶11 Plaintiffs argue that, even if the Trust falls within § 14-10604,
the statute should not apply because: (1) it creates an arbitrary bar; (2) it is
unfair to apply the statute when the trustee has not complied with the
reporting requirement of § 14-10813; and (3) Shawn should be equitably
estopped from invoking the statute of limitations.
¶12 Plaintiffs contend that the one-year statute of limitation in
§ 14-10604(A)(1) is arbitrary because the U.T.C. § 604 sets forth a three-year
limitations period. The comments to U.T.C. § 604 state that it is “designed
to allow an adequate time in which to bring a contest while at the same time
permitting the expeditious distribution of the trust property following the
settlor’s death.” U.T.C. § 604, cmt. Additionally, the three-year period in
U.T.C. § 604 corresponds to the three-year limitation for contesting a non-
probated will under the Uniform Probate Code (“U.P.C.”) § 3-108 (2019).
Citing those provisions, Plaintiffs argue that the appropriate limitations
period should be three years.
¶13 The legislature is empowered to enact statutes of limitations
to protect against stale claims. Florez v. Sargeant, 185 Ariz. 521, 528 (1996).
Determining the appropriate limitations period involves “very delicate
policy decisions that properly belong to the legislative branch of
government. If the legislature wants to [enlarge the limitations period], it
is, of course, free to do so. But the weighing, balancing, and policy making
that go into such an enterprise are properly legislative, not judicial tasks.”
3 Plaintiffs also cited In re Walter W. Quisling and Marcella E. Quisling
Revocable Trust, 1 CA-CV 14-0322, 2015 WL 3767295, at *1, ¶¶ 6-7 (Ariz. App.
June 16, 2015) (mem. decision). See Ariz. R. Sup. Ct. 111(c)(1)(C). Like
Sibley, Quisling concerned an amendment to a trust that had become
irrevocable upon the settlor’s death. 2015 WL 3767295, at *1, ¶¶ 4-5.
Because the challenge was not to the original trust, which by its terms was
revocable until the settlor’s death, but was aimed instead at the post-death
amendment, the court held § 14-10604 did not apply. Id. at ¶ 7.
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Id. at 529; see also Landgraff v. Wagner, 26 Ariz. App. 49, 55 (1976) (rejecting
due process challenge to statute of limitations that barred claims even when
the claimants were unaware of their injuries). It is not for this court to
determine “[w]hether the legislative policy behind the statute is good or
bad.”). Landgraff, 26 Ariz. App. at 55. Whether a different limitations period
is appropriate in some cases is a question that is properly directed to the
legislature.
¶14 Plaintiffs next contend that courts should not apply the one-
year statute of limitations when “formal notice of the trust is lacking.”
Under A.R.S. § 14-10813(B)(3), a trustee of an irrevocable trust must notify
qualified beneficiaries within sixty days after the trustee learns of the trust.
According to Plaintiffs, it is unfair for the limitations period to start running
before this notice is provided.
¶15 “’When interpreting a statute, we look first to the plain
language because that is “the best and most reliable indicator of a statute’s
meaning.”’” Ader v. Estate of Felger, 240 Ariz. 32, 36, ¶ 9 (App. 2016) (quoting
City of Tucson v. Clear Channel Outdoor, Inc., 218 Ariz. 172, 178, ¶ 6 (App.
2008)). Notice is not required to start the limitations period in § 14-
10604(A)(1). The statute unambiguously contains one time period that
applies when notice is given, i.e., § 14-10604(A)(2), and one time period that
applies in all other cases, i.e., § 14-10604(A)(1). The statute plainly states
that the applicable filing deadline is the earlier of the two subsections. A.R.S.
§ 14-10604(A). Thus, the legislature has determined that a four-month
limitations period applies when notice is given and that a one-year period
applies in all other cases. We will not impose an additional notice
requirement when the plain language of § 14-10604(A)(1) does not include
one. See Ader, 240 Ariz. at 39, ¶ 19.
¶16 In support of their contention that notice is required to trigger
the limitations period, Plaintiffs cite A.R.S. § 14-11005(A), which provides
that the one-year limitation period for a breach of trust claim starts when
there is adequate disclosure that a potential claim exists. Here, we are not
addressing the breach of trust claim, but rather Plaintiffs’ challenge to the
validity of the Trust. Further, the inclusion of the adequate disclosure
requirement in § 14-11005(A) shows that the legislature knows how to
include a notice provision when it intends to do so. See Ader, 240 Ariz. at
39, ¶ 19.
¶17 We also reject Plaintiffs’ contention that the sixty-day notice
requirement of § 14-10813(B)(3) is mandatory and cannot be modified by
the terms of a trust. The Trust expressly modified this sixty-day notice
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period by requiring the trustee to give notice within a “reasonable time after
accepting the trusteeship[.]” See JSL Trust § 11.4(b).
¶18 By statute, the terms of a trust prevail except for several
statutory requirements that cannot be modified. A.R.S. § 14-10105(B). The
sixty-day notice provision in § 14-10813(B)(3) is not listed among the terms
that cannot be modified. See A.R.S. § 14-10105(B). The terms of the trust
cannot alter a trustee’s “duty to respond to the request of a qualified
beneficiary of an irrevocable trust for trustee’s reports and other
information reasonably related to the administration of a trust.” A.R.S.
§ 14-10105(B)(8). But the statute does not specify any time period by which
a trustee must respond to requests for information. A trust report must be
provided “at least annually” under § 14-10813(C). Thus, Arizona law did
not preclude the Trust from stating that Shawn had an obligation to provide
notice within a reasonable time after accepting the trusteeship and to
respond within a reasonable time period to requests from current
beneficiaries for a trust report and other information. See also U.T.C. § 105,
cmt. (noting that U.T.C. § 105(b)(9), which is similar to A.R.S. § 14-
10105(B)(8), specifies limits upon the settlor’s ability to waive notice
requirements, which include providing a copy of the trust or annual
reports).
¶19 Plaintiffs argue that permitting a trust to modify the sixty-day
notice requirement could allow a trustee to delay giving notice until after
the limitations period has run. That did not occur, so we need not address
this possibility. Shawn provided Plaintiffs with notice and a copy of the
Trust more than three months before the one-year limitations period ended.
¶20 Finally, Plaintiffs claim Shawn should be equitably estopped
from invoking the statute of limitations because of her alleged bad faith.
According to Plaintiffs, Shawn acted in bad faith by not disclosing the
existence of the Trust for nearly nine months after Joseph’s death and the
notice lacked sufficient information and did not mention the one-year
statute of limitations. Plaintiffs also allege that Shawn ignored and
inadequately responded to their reasonable inquiries about the Trust and
raised the no-contest clause in response to these reasonable requests.
Plaintiffs also assert that within months after Joseph’s death, Mark
contacted one of Joseph’s estate attorneys but received no information.
¶21 Shawn disputes that Plaintiffs requested information after she
formally notified them of the Trust but contends that any factual dispute is
irrelevant because her actions did not absolutely prevent Plaintiffs from
bringing a timely claim. Plaintiffs contend they did not file the petition any
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earlier because they relied on assertions from Shawn’s attorney that Shawn
would provide a trust report and “answer questions of a general nature.”
Plaintiffs also argue that they could not petition any earlier because they
had to first determine whether there was probable cause to challenge the
Trust to avoid violating the Trust’s no-contest clause.
¶22 The doctrine of equitable estoppel applies when the acts or
representations of one induce another to believe that certain facts exist and
the other justifiably acts in reliance on those facts to their detriment. Heltzel
v. Mecham Pontiac, 152 Ariz. 58, 61 (1986). Plaintiffs have not shown that
estoppel applied here. Although Shawn, through her attorney, promised
to respond to their inquiries, if, as Plaintiffs allege, Shawn continued to
ignore requests for information as the end of the limitations period
approached, then Plaintiffs could no longer reasonably rely on the assertion
that Shawn would provide the information. See Suburban Pump & Water Co.
v. Linville, 60 Ariz. 274, 284-85 (1943) (holding there was no reasonable
reliance when a party “ignores highly suspicious circumstances which
should warn him of danger or loss.”).
¶23 Assuming the truth of the facts alleged by Plaintiffs, as
discussed supra ¶ 21, they have not shown they reasonably relied on
Shawn’s promise. To the contrary, the facts suggested that Plaintiffs would
have to ask the court to compel Shawn to provide the information they
sought. Plaintiffs claim their hands were tied by the no-contest clause,
which required probable cause to challenge the Trust. But an action to
obtain information necessary to decide whether to institute a proceeding
against Shawn would not trigger the no-contest provision. See JSL Trust
§ 12.1. To be sure, Shawn’s conduct created a short time frame in which
Plaintiffs could assert their rights, but Plaintiffs were not absolutely
prevented from acting before the limitations period expired. Thus, the
doctrine of equitable estoppel does not preclude application of the statute
of limitations to Plaintiffs’ claim. We affirm the grant of summary
judgment in favor of Shawn on the statute of limitations.4
II. A Question of Fact Precludes Summary Judgment on the No-Contest
Clause
¶24 The Trust contained a no-contest clause that terminated the
interest of any beneficiary who contested or objected to the validity of any
provision in the Trust. See JSL Trust § 12.1. A no-contest clause is
4 Given this resolution, Shawn’s request for judicial notice of deeds
and a notice to creditors is moot.
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enforceable unless the party challenging the trust has probable cause to
support the contest. A.R.S. § 14-10113; see also In re Shaheen Trust, 236 Ariz.
498, 500, ¶ 6 (App. 2015). Probable cause means “the existence, at the time
of the initiation of the proceeding, of evidence which would lead a reasonable
person, properly informed and advised, to conclude that there is a substantial
likelihood that the contest or attack will be successful.” In re Estate of Shumway,
198 Ariz. 323, 327, ¶ 12 (2000) (quoting Restatement (Second) of Property:
Donative Transfers § 9.1 cmt. j (1983) (“Restatement”)). A subjective belief
is not sufficient; the belief must be “objectively reasonable.” Shaheen, 236
Ariz. at 501, ¶ 12 (citation omitted).
¶25 The superior court found that Plaintiffs lacked probable cause
to believe they would succeed on their challenge because § 14-10604(A)(1)
“automatically” barred Plaintiffs’ claim and Shawn’s attorney had warned
them before they filed their petition that it was time-barred. Plaintiffs
contend the court should have considered the likelihood of success on all
issues. But Shawn did not argue that Plaintiffs lacked probable cause to
allege undue influence and lack of testamentary capacity, only that there
was no probable cause to file a petition after the limitations period had run.
¶26 Whether probable cause existed “is ultimately a question of
law, which we review de novo.” Shaheen, 236 Ariz. at 500, ¶ 7 (citing
Shumway, 198 Ariz. at 326, ¶ 9). The superior court decided this issue on
summary judgment, unlike Shumway and Shaheen, in which the superior
court sat as the fact-finder. Summary judgment is proper only if no juror
could agree that a “reasonable person, properly informed and advised,” would
conclude that there is substantial likelihood that Plaintiffs could
successfully challenge the statute of limitations. Shumway, 198 Ariz. at 327,
¶ 12. In reviewing the superior court’s ruling, we must view the evidence
in the light most favorable to Plaintiffs and review de novo whether
genuine issues of material fact exist. Awsienko, 227 Ariz. at 258, ¶ 7. We
also keep in mind that no-contest clauses “work a forfeiture, which is
disfavored in the law.” Shumway, 198 Ariz. at 328, ¶ 14 (citations omitted).
¶27 The superior court relied, in part, on the fact that Shawn’s
attorney told Plaintiffs that their claim was time-barred, but a reasonable
person need not accept the position of opposing counsel. This is
particularly so when, as here, Plaintiffs were represented by their own
attorney, who provided contrary arguments as to why the statute of
limitations did not apply. See id. at 328, ¶ 15 (holding that “[o]ne important
factor used to determine whether the will contest was filed with probable
cause is that the beneficiaries relied on the advice of disinterested counsel,
sought in good faith after a full disclosure of the facts.” (citing (indirectly)
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to Restatement § 9.1 cmt. j)).5 Filing a claim outside the limitations period
is not objectively unreasonable if Plaintiffs reasonably believed in the
success of their argument that an exception to the statute of limitations
existed.
¶28 To support their equitable estoppel claim, Plaintiffs argued
that Shawn acted in bad faith by waiting nine months after Joseph’s death
to notify them of the Trust. Plaintiffs further asserted that although Shawn
promised to answer general questions, she failed to provide complete
information about Trust assets and ignored their requests for additional
information. Shawn continued to refuse to disclose certain information
even after Plaintiffs retained counsel, who questioned the lack of response.
Shawn’s attorney did not tell Plaintiffs their claim was barred by the one-
year statute of limitations until after Plaintiffs notified Shawn of their intent
to file a claim. Shawn denied that Plaintiffs requested additional
information before the statute of limitations expired. The parties also
disputed whether Shawn’s notice provided adequate information and
whether Plaintiffs were entitled to the additional information they
requested.
¶29 These factual disputes must be resolved before the court can
determine whether Plaintiffs could have objectively believed that their
estoppel argument had a substantial likelihood of success. See Bird v.
Rothman, 128 Ariz. 599, 603 (App. 1981) (in a malicious prosecution case,
“[a]ll issues of a party’s reasonable belief and prudence in bringing an
action are to be decided by the court. The only function of the jury in the
determination of probable cause is to determine the actual facts of what the
prosecuting party or attorneys performed in the way of investigation and
research.”). For example, it would be objectively unreasonable to believe
an estoppel argument could prevail if Plaintiffs did not communicate with
5 Restatement § 9.1 was renumbered to § 8.5 in Restatement (Third) of
Property (Wills & Donative Transfers) (2003). Although both versions
include a probable cause exception to no-contest clauses, Restatement
(Third) § 8.5, comment c, unlike § 9.1 comment j, and contrary to Shumway,
adds that “[t]he mere fact that the person mounting the challenge was
represented by counsel is not controlling” because a party challenging a
donative transfer is “normally” represented by counsel. This change in the
treatment of the advice of counsel does not impact our decision because our
finding of probable cause is not based solely on the fact that Plaintiffs had
counsel.
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Shawn until they hired an attorney in July 2019 (after the limitations period
had expired) or if they sought information to which they were not entitled.
¶30 As discussed above, these questions of fact did not preclude
summary judgment on the statute of limitations. But these are two separate
considerations. The relevant inquiry in deciding the no-contest clause
summary judgment motion is whether, at the time they filed the petition,
Plaintiffs reasonably believed there was a substantial likelihood that they
could defeat the statute of limitations. On that issue, reasonable minds
could differ. That Plaintiffs ultimately lost their challenge to the statute of
limitations does not necessarily mean they lacked probable cause to assert
it. “[T]he definition of probable cause does not require certainty of
success.” Shumway, 198 Ariz. at 329, ¶ 19. Depending on the resolution of
the factual disputes, Plaintiffs may be able to establish that they had
probable cause to raise their challenge to the statute of limitations.
Accordingly, we vacate summary judgment on the no-contest clause and
remand for further proceedings in the superior court.
III. Attorneys’ Fees
¶31 After granting summary judgment on the statute of
limitations, the superior court awarded Shawn $30,832.50 in attorneys’ fees.
Shawn cited two statutes in support of her fee request, A.R.S. §§ 14-11004
and -1105, but the court did not specify the basis for the award. We review
the court’s award of attorneys’ fees for an abuse of discretion. In re
Conservatorship for Mallet, 233 Ariz. 29, 31, ¶ 7 (App. 2013).
¶32 We need not determine whether Plaintiffs’ petition was
unreasonable for purposes of § 14-1105 because Shawn also sought fees
under A.R.S. § 14-11004, which authorizes an award of attorneys’ fees for a
trustee’s good faith defense in a proceeding involving the administration of
the trust. Plaintiffs do not challenge the court’s authority to award fees
under § 14-11004. Instead, they argue the award was excessive.
Specifically, they argue it was patently unreasonable to spend 58.1 hours to
prepare an 11-page reply memorandum in support of the motion for
summary judgment. Shawn’s reply addressed several new arguments that
Plaintiffs raised in response to the motion and included a supplemental
statement of facts. Therefore, the court was within its discretion to accept
Shawn’s assertion that the reply took significantly longer to research and
prepare than the motion itself. Accordingly, we find no abuse of discretion.
¶33 Both parties request an award of attorneys’ fees and costs on
appeal. Shawn requests an award of fees under §§ 14-1105 and -11004.
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Plaintiffs cite A.R.S. §§ 12-341 and -341.01 as well as the “terms of the JSL
Trust cited by the Appellee as part of its fee application below.” However,
Plaintiffs do not specify which Trust provision Shawn cited in support of
her fee request, and we need not search the pleadings or the Trust terms to
find authority for Plaintiffs’ fee request. Further, we find no basis to award
fees under § 14-1105, and, in the exercise of our discretion, we decline to
award fees and costs to either party under §§ 12-341.01 or 14-11004.
CONCLUSION
¶34 We affirm the summary judgment in favor of Shawn on the
statute of limitations and the related award of attorneys’ fees. We vacate
the summary judgment on the no-contest clause and remand for further
proceedings consistent with this decision.
AMY M. WOOD • Clerk of the Court
FILED: AA
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