Dooley v. Regions Bank , 2017 Ark. App. 432 ( 2017 )

Cite as 2017 Ark. App. 432
ARKANSAS COURT OF APPEALS
DIVISION II
No. CV-16-748
Opinion Delivered: September 6, 2017
MARY F. DOOLEY APPEAL FROM THE POPE COUNTY
APPELLANT CIRCUIT COURT
[NO. 58CV-15-490]
V.
REGIONS BANK, TRUSTEE OF B-J
TRUST DATED APRIL 26, 1996; AND HONORABLE GORDON W. “MACK”
BELINDA SHELTON AND JIMMY C. MCCAIN, JR., JUDGE
DOOLEY II, BENEFICIARIES
APPELLEES
AFFIRMED
WAYMOND M. BROWN, Judge
Appellant Mary F. Dooley appeals the Pope County Circuit Court order dismissing
her complaint against appellees Regions Bank, Trustee of B-J Trust dated April 26, 1996
(Trust), and Belinda Shelton and Jimmy C. Dooley II, beneficiaries. On appeal, she argues
that the court erred by finding that her claim was barred by res judicata. She also contends
that Regions Bank is not a lifetime beneficiary of the B-J Trust, and that the court erred in
awarding attorney’s fees. We affirm.
Mary F. Dooley and Jimmy Dooley, appellant’s deceased husband, created the B-J
Trust on April 26, 1994. 1 The trust stated in pertinent part:
1
Although the trust was created in 1994, the complaint stated that it was created in
1996.
Cite as 2017 Ark. App. 432
I.
The purpose of this trust is to provide for the general welfare of Belinda Shelton and
Jimmy C. Dooley, II and to be effective until the death of Jimmy Dooley and Mary
F. Dooley and to provide for the distribution of Trust Property as stated in the
following paragraphs.
II.
The Trust Estate shall be divided into two equal portions one for each of our
children, Belinda Shelton and Jimmy C. Dooley, II. Said proportion shall be
distributed and managed as follows:
a) The Trust fund shall be distributed equally to our said children, upon the death of
Jimmy Dooley and Mary F. Dooley.
b) Upon the death of the Trustee, Jimmy Dooley, Mary F. Dooley shall become the
successor Trustee.
c) The Trust Estate, including all income therefrom and increase thereof, is to be
retained, invested or re-invested by the said Trustee in any type of real or personal
property, and in any way thought advisable by the said Trustee without any statutory
restriction. He may sell any property, real or personal, publicly or privately, without
Court order and without notice, and upon such terms and conditions as he believes
to be satisfactory. He may manage, control, lease or encumber the assets of the Trust
Estate in any way he believes will fulfill the purpose of this Trust.
d) Such of the income and corpus as is needed for the lifetime needs of the Trustee
and Successor Trustee shall be applied or distributed by the Trustee in cash or in
kind. Said distribution shall be made to those persons and in such manner and
amounts as said Trustee in their discretion believe will fulfill the purpose of this Trust,
regardless of the existence of other funds available for these persons. Said Trustees
are authorized to make such distribution directly to any said beneficiary or themselves
or to a beneficiary’s guardian, or to any person on behalf of said beneficiary without
the Trustee being liable to see the application thereof.
Mary F. Dooley and Jimmy Dooley were divorced in 2009. As part of the divorce,
the court was asked to decide (1) whether the B-J Trust was revocable or irrevocable; (2)
whether the attempted modification to the Trust was valid or null and void; (3) whether
the property owned by the B-J Trust should be considered marital property; (4) whether
Jimmy Dooley should be removed as trustee for an alleged breach of fiduciary duty; and (5)
whether the court should exercise its statutory authority to modify or terminate the Trust
2
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because of a change in circumstances that renders the continued administration of the Trust
in its current form untenable. The court filed an order on October 22, 2009, finding that
(1) the Trust was irrevocable, (2) the attempted modification to the Trust was null and void,
(3) the property of the Trust was not marital property and that appellant was not entitled to
an “inchoate interest” in the Trust property, (4) Jimmy Dooley should be removed as
Trustee based on his breach of fiduciary duty, and (5) the terms of the Trust should be
modified based on material changes in circumstances which affected the ability of the Trust
to serve its purpose. More specifically, the court found that the express purpose of the Trust
was to preserve the Trust property for the benefit of, and ultimately distribution to, Belinda
Shelton and Jimmy C. Dooley II upon the settlors’ deaths. The court further found that
placing Jimmy Dooley and Mary F. Dooley in the role of trustee or co-trustee was not
going to work. Therefore, the court found that it had no choice but to “direct that the
provisions in the B-J Trust related to Plaintiff Jimmy C. Dooley Sr. acting as Trustee and
Defendant Mary F. Dooley serving as successor Trustee, as well as relating to their various
rights and responsibilities as Trustee and Successor Trustee thereunder, should be and hereby
are Terminated.” The court substituted Regions Bank as the trustee. Neither party
appealed this order.
Jimmy Dooley and Mary F. Dooley remarried on September 5, 2010. Jimmy Dooley
died on October 6, 2015. Appellant wrote a letter to Regions Bank on October 20, 2015,
seeking liquidation of all or a portion of the Trust property to provide funds to her for
monthly living expenses. Regions responded the next day, saying that the beneficiaries
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objected to any type of sale or distribution. Regions urged appellant to petition the court
for a determination of the matter.
Appellant filed a Petition for Distribution of Trust Income and Corpus for Support
of Widow on November 23, 2015. She maintained that since she and Jimmy remarried,
there was no need for Regions Bank to continue as an “impartial third-party trustee.” She
asked the court to order the trustee to “pay over to [her] sufficient funds from income
and/or corpus to maintain her current standard of living” and that Regions be terminated
as Trustee. Regions filed an answer to appellant’s complaint on December 21, 2015,
pleading res judicata, deficient process, deficient service of process, failure to allege facts
upon which relief may be granted pursuant to Rule 12(b)(6), and collateral estoppel.
Regions also filed a motion to dismiss on December 21, 2015, arguing 12(b)(6) and res
judicata. Appellees Belinda Shelton and Jimmy C. Dooley II filed an answer and a motion
to dismiss along with an accompanying brief on December 31, 2015. They argued that
appellant’s petition should be dismissed based on res judicata and collateral estoppel.
Appellant filed a response to appellees’ motions to dismiss on January 19, 2016. She asked
the court to deny the motions because res judicata was inapplicable to her current petition.
Regions filed a reply on January 26, 2016, again asking the court to dismiss appellant’s
petition based on res judicata and Rule 12(b)(6).
The court filed an order on May 25, 2016, granting appellees’ motions to dismiss
with prejudice. The court stated in the order that it “finds that the Motion to Dismiss and
corresponding Reply Brief of Separate Defendant Regions Bank accurately sets forth the
facts, law and findings of the Court with regard to the instant Motions, and as such, the
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Court hereby adopts them by reference as if set forth herein word for word.” Appellant
filed a timely notice of appeal on June 24, 2016. This appeal followed.
We generally review a circuit court’s decision on a motion to dismiss by treating the
facts alleged in the complaint as true and viewing them in the light most favorable to the
plaintiff. 2 On those occasions where the circuit court is presented with documents outside
the pleadings, we treat the case as an appeal from a summary judgment 3 and view the
evidence in the light most favorable to the party opposing the motion. 4 However, when
the issues on appeal do not involve factual questions but rather the application of a legal
doctrine such as res judicata, we simply determine whether the appellees were entitled to
judgment as a matter of law. 5
Res judicata means that “a thing or matter has been definitely and finally settled and
determined on its merits by the decision of a court of competent jurisdiction.” 6 Res judicata
consists of two facets, one being issue preclusion and the other claim preclusion. 7 The
claim-preclusion aspect of res judicata bars relitigation of a subsequent suit when (1) the first
suit resulted in a final judgment on the merits, (2) the first suit was based on proper
2
Winrock Grass Farm, Inc. v. Affiliated Real Estate Appraisers of Ark., Inc., 2010 Ark.
App. 279, 373 S.W.3d 907.
3
See Bayird v. Floyd, 2009 Ark. 455, 344 S.W.3d 80.
4
Winrock, supra.
5
Baptist Health v. Murphy, 2010 Ark. 358, 373 S.W.3d 269; Winrock, supra.
6
Baptist Health, id.
7
Id.
5
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jurisdiction, (3) the first suit was fully contested in good faith, (4) both suits involve the same
claim or cause of action, and (5) both suits involve the same parties or their privies. 8
Appellant argues that res judicata based on claim preclusion does not apply because
the claims are not the same and there was not an instance in which she could have raised
this claim but chose not to. We disagree. All elements of claim preclusion have been
satisfied in this case: (1) there was a final judgment on the merits of appellant’s claim in the
divorce proceeding that she was entitled to a portion of the Trust, (2) the court deciding
the claim had proper jurisdiction to do so, (3) the first suit was fully contested by appellant
in her attempt to receive a one-half interest in the Trust property even though she conceded
that it was not marital property, (4) both suits involve the same claim by appellant that she
has a monetary interest in the Trust, and (5) the same parties or their privies are involved in
both suits. Accordingly, we hold that the suits involve the same claim as the divorce
proceeding and res judicata barred appellant’s new claim. Therefore, appellees were entitled
to judgment as a matter of law.
To the extent that appellant argues that Regions Bank is not a lifetime beneficiary of
the B-J Trust, that issue is not properly before us. The court named Regions as the trustee
in the 2009 opinion, and appellant did not appeal from that opinion. Any attempt by
appellant to revisit this issue is an improper collateral attack.
Appellant made the argument that the court erred in awarding attorney’s fees in this
case so that the award could be reversed if we reversed the court on the merits. Since we
affirm the trial court, there is no need to address this issue.
8
Id.
6
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Affirmed.
VIRDEN and GLADWIN, JJ., agree.
Taylor & Taylor Law Firm, P.A., by: Andrew M. Taylor and Tasha C. Taylor, for
appellant.
The Streett Law Firm, P.A., by: Alex G. Streett, James A. Streett, and Robert M. Veach,
for appellee Regions Bank.
The Brad Hendricks Law Firm, by: Lloyd W. Kitchens, for appellees Belinda Shelton
and Jimmy C. Dooley II.
7