in Re Duncan Park Trust ( 2017 )

STATE OF MICHIGAN
COURT OF APPEALS
DIANE NASH, Personal Representative of the UNPUBLISHED
ESTATE OF CHANCE AARON NASH, August 10, 2017
deceased,
Plaintiff-Appellant/Cross-Appellee,
v No. 331651
Ottawa Circuit Court
DUNCAN PARK COMMISSION, LC No. 10-002119-NO
Defendant-Appellee/Cross-
Appellant.
DIANE NASH, Personal Representative of the
ESTATE OF CHANCE AARON NASH,
deceased,
Plaintiff-Appellant/Cross-Appellee,
v No. 331840
Ottawa Circuit Court
DUNCAN PARK TRUST and EDWARD LC No. 12-002801-NO
LYSTRA, RODNEY GRISWOLD, and JERRY
SCOTT, individually and as Trustees of the
Duncan Park Trust,
Defendants-Appellees/Cross-
Appellants.
DIANE NASH, Personal Representative of the
ESTATE OF CHANCE AARON NASH,
deceased,
Plaintiff-Appellant,
v No. 331842
Ottawa Circuit Court
ROBERT L. DEHARE, LC No. 12-003145-NO
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Defendant-Appellee.
CITY OF GRAND HAVEN, successor trustee of
the Duncan Park Trust,
Appellee,
v No. 331869
Ottawa Probate Court
DIANE NASH, Personal Representative of the LC No. 15-062257-TV
ESTATE OF CHANCE AARON NASH,
deceased,
Appellant.
Before: HOEKSTRA, P.J., and MURPHY and K. F. KELLY, JJ.
PER CURIAM.
In Docket Nos. 331651, 331840 and 331842, plaintiff appeals as of right the circuit
court’s order granting defendants summary disposition. In Docket Nos. 331651 and 331840,
defendants cross-appeal from the same order, claiming that the circuit court should have granted
summary disposition on additional grounds. In Docket No. 331869, plaintiff appeals as of right a
probate court order modifying the terms of a trust and appointing the City of Grand Haven as
trustee. We affirm the circuit court and probate court orders. Given this affirmance, we decline
to address defendants’ cross appeal in Docket No. 331840.
I. BASIC FACTS AND PROCEDURAL HISTORY
As the circuit court explained:
These combined cases arise out of the same underlying tragedy: 11-year-
old Chance Nash died when he struck a fallen tree in a forest while snow
sledding. Plaintiffs seek to hold the landowner and various other parties liable for
this death. These combined cases have been aggressively prosecuted and
defended, and have generated multiple written opinions by the trial court, a
published decision by the Court of Appeals, and a granting of leave, subsequently
vacated, by the Supreme Court. In short, these cases have created a procedural
labyrinth. However, the substantive issue involved is simple: Are defendants
liable for the death of Chance Nash when Chance struck a naturally fallen tree
while sledding down a snowy, wooded, natural hill in an undeveloped tract of
land known as Duncan Park? [Footnote omitted.]
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This is the second time the case has been before the Court. The first case, Nash v Duncan
Park Comm’n, 304 Mich App 599; 848 NW2d 435 (2014), vacated in part by 497 Mich 1016(“Nash I”) provides much of the background information. The land where Chance had his
accident was previously owned by Martha and Robert Duncan. In an effort to honor her
husband, Martha created a trust deed in 1913, naming herself as the “party of the first part” and
the “Trustees for and in behalf of the people of the city of Grand Haven” as the “parties of the
second part. Id. at 604-605. The trust deed provided, in part:
“[Mrs. Duncan], desiring to transfer the land hereinafter described to the PEOPLE
OF THE CITY OF GRAND HAVEN, in order to perpetuate the name of her
deceased husband ... has GRANTED, BARGAINED, SOLD, REMISED,
RELEASED, ALIENED AND CONFIRMED, and by these presents does sell,
remise, release, alien, confirm and convey unto the Parties of the Second Part and
to their successors in office forever, all that piece of land situated in the City of
Grand Haven ... known and described as follows . . .” [Id. at 605.]
The trust deed was conditioned, in part on the creation of a “Park Board” that would be known as
“The Duncan Park Commission,” comprised of three named trustees that were granted full
control and supervision of the park. Id.Another condition of the trust deed provided:
“The above-described premises shall be at all times known and described as
‘DUNCAN PARK’ and said described parcel of land shall always be held and
occupied by said grantees for and in behalf of the Citizens of the City of Grand
Haven as a public park, for the use and enjoyment of the citizens or inhabitants of
Grand Haven . . .” [Id. at 606.]
For purposes of this appeal, the final condition of note required the city to provide a means for
the park’s care, but provided:
“But it shall be the right and duty of the said TRUSTEES to remove all dead,
dying, or unsightly trees, to thin out the undergrowth, wherever necessary, to
remove dead branches, noxious weeds, or other rubbish, and in short, keep said
park in as neat and trim a condition as the means at their command will allow.”
[Id.]
The city enacted an ordinance on October 20, 2013 that created “The Duncan Park
Commission.” The ordinance provided, in part:
“It is the definite purpose of this ordinance to create and establish a permanent
commission, which commission shall have the power and authority at all times to
manage and control that plat of land deeded to the three trustees before mentioned
for and in behalf of the citizens of the City of Grand Haven, by Mrs. Martha M.H.
Duncan, for public park purposes, in accordance with the deed of gift of said park.
[Id. at 607.]
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At the time of Chance’s accident the three trustees were defendants Edward Lystra, Rodney
Griswold, and Jerry Scott.
In November 2010, plaintiff sued the Commission, claiming that the Commission failed
to maintain the sledding hill and failed to warn sledders of the dangers of sledding on the hill.
The circuit court granted the Commission summary disposition pursuant to MCR 2.116(C)(7),
finding that the Commission was authorized by the city and constituted a political subdivision
entitled to governmental immunity under the governmental tort liability act (GTLA), MCL
691.1401 et seq. Id. at 608-609. In April 2012, plaintiff filed a second suit against the Duncan
Park Trust and its three individual trustees, alleging both negligence and gross negligence.
Plaintiff later moved to add Robert DeHare, the park’s groundskeeper, as a defendant. Id. at 610.
The circuit court determined that Duncan Park Trust was not, in fact, a trust; rather it was a
governmental unit of the City of Grand Haven. Because there was no trust, there could be no
trustees. The circuit court also denied plaintiff’s motion to amend to add DeHare as a party
defendant. Id. at 610-613. In Nash I, our Court concluded that there was a valid trust created,
which transferred legal ownership of the land to the three trustees and not the City of Grand
Haven. For that reason, governmental immunity did not apply for either the Trust or the
Commission. Id. at 604, 613-630.
Following remand and after additional pleading and discovery, the Commission, the
Trust, and the individual trustees once again moved for summary disposition, arguing that: (1)
they owed Chance no duty of care; (2) the Recreational Land Use Act (RUA), MCL 324.73301
et seq. provided immunity from suit; (3) the danger was open and obvious; (4) the Estate and
Protected Individual Code (EPIC), MCL 700.7306(2), shielded the trustees from liability; and (5)
they were entitled to governmental immunity. DeHare also separately moved for summary
disposition, arguing that the danger was open and obvious and that he owed Chance no duty of
care.
The circuit court issued an opinion and order on February 3, 2016. After setting forth a
detailed analysis on each of the issues, the circuit court provided the following conclusion:
In December, 2009, Chance Nash snow sledded down a hill in heavily
wooded Duncan Park and struck a naturally fallen tree near the bottom of the hill.
Tragically, Chance passed away. In these consolidated cases, plaintiff seeks to
hold defendants liable for Chance’s death. The theory essentially being that
Duncan Park is unsafe for snow sledding, that defendants knew that it was unsafe,
and that defendants failed to make the park safe for that activity.
The Trust document did not create any duty owed by any of the
defendants to Chance. Neither has it been established that any of the defendants
did any negligent act that contributed to this tragic “freak” accident. Plaintiff
speculates that DeHare trimmed a branch off the fallen tree simply because
DeHare was the caretaker and used a chainsaw in his duties. Speculation as to
who did what is not evidence and is not sufficient to sustain a cause of action. In
any event, there is no evidence that any trimming of the fallen tree was
negligently performed.
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The Trustees, the Duncan Park Trust, and the Duncan Park Commission
are shielded from liability for this tragic accident under the [RUA], absent gross
negligence and/or willful and wanton conduct. It simply cannot be said that these
landowners acted recklessly, without concern for Chance, by simply allowing a
forest to remain a forest. As noted, it has not been established that any of these
defendants did any act that caused injury or death to Chance. Rather, plaintiff
simply claims that these defendants should have “cleaned up the woods.”
This tragedy did not result from any manmade or artificial condition of the
land. Rather, this tragedy resulted from Chance striking a naturally fallen tree in a
forest. Plaintiff has not explained how allowing undeveloped land to remain
undeveloped is reckless conduct. There is no evidence that the hill was dangerous,
neither has evidence been presented that the fallen tree itself was dangerous.
Rather, it was the decision to sled down a wooded hill that was dangerous. That
the owners tolerated, knew, or should have known, that children sledded down
wooded hills does not make their lack of action reckless or willful and wanton.
Rather, that knowledge is consistent with the purpose of the Trust document and
the RUA-to allow the public to use land for recreational use while shielding the
owner from ordinary negligence claims. A landowner is not to be held responsible
for the decisions of one who engages in outdoor recreational activities on
undeveloped land.
Similarly, the open and obvious condition of Duncan Park defeats this
premises liability claim. Again, Duncan Park is an undeveloped heavily wooded
tract of land. Given the natural state of the land, it can hardly be claimed that
trees, living or fallen, are not open and obvious. Adults and children know that
trees are naturally growing immovable objects. That the fallen tree which Chance
struck may have been partially or completely covered by snow does not change
the open and obvious character of the land and are not special aspects that give
rise to an unreasonable risk of harm. To hold otherwise would subject
landowners/license holders to liability for a child who steps into a “hidden”
gopher hole and breaks his ankle while running in the woods because “the owner
knew that gophers dig holes and children are allowed to run by those holes in the
woods.” This is contrary to common law, case law, and common sense.·
Defendants are not liable for the tragic death of Chance Nash when
Chance struck a naturally fallen tree while sledding down a snowy, wooded,
natural hill in an undeveloped tract of land known as Duncan Park.
In Docket Nos. 331651, 331840 and 331842, plaintiff appeals as of right the opinion and
order entered, arguing that the circuit court erred in granting the Trust, the Commission, the
individual trustees, and DeHare summary disposition. In Docket Nos. 331651 and 331840, the
Trust, the Commission and the individual trustees cross-appeal from the same opinion and order,
arguing that the circuit court erred in finding that they were not entitled to summary disposition
on the basis of governmental immunity. As will be discussed in greater detail later in this
opinion, the probate court later reformed the trust and the City was named as successor trustee
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after the three trustees resigned without naming successor trustees. The probate court’s ruling
forms the basis of plaintiff’s appeal in Docket No. 331869.
II. DOCKET NOS. 331651, 331842 AND 331842
The trial court granted defendants summary disposition under MCR 2.116(C)(7) and
(C)(10). “This Court reviews de novo a circuit court’s decision whether to grant or deny
summary disposition.” Joseph v Auto Club Ins Ass’n, 491 Mich 200, 205; 815 NW2d 412
(2012).
A motion for summary disposition under MCR 2.116(C)(7) asserts that a claim is
barred by immunity granted by law and may be supported or opposed by
affidavits, depositions, admissions, or other documentary evidence; the substance
or content of the supporting proofs must be admissible in evidence. A trial court
properly grants a motion for summary disposition under MCR 2.116(C)(7) when
the undisputed facts establish that the moving party is entitled to immunity
granted by law. We review de novo a trial court’s grant of summary disposition
pursuant to MCR 2.116(C)(7). [Johnson v ACLU, ___ Mich App ___; ___ NW2d
___ (Docket No 330536, issued May 23, 2017, slip op, p 6.]
Similarly,
A motion under MCR 2.116(C)(10) tests the factual sufficiency of the
complaint. In evaluating a motion for summary disposition brought under this
subsection, a trial court considers affidavits, pleadings, depositions, admissions,
and other evidence submitted by the parties, MCR 2.116(G)(5), in the light most
favorable to the party opposing the motion. Where the proffered evidence fails to
establish a genuine issue regarding any material fact, the moving party is entitled
to judgment as a matter of law. [Maiden v Rozwood, 461 Mich 109, 120; 597
NW2d 817 (1999).]
Plaintiff raises a number of issues on appeal. However, we hold that because the RUA is
dispositive of plaintiff’s claims, we decline to address the circuit court’s alternative grounds in
granting summary disposition.
MCL 324.73301(1) provides:
Except as otherwise provided in this section, a cause of action shall not arise for
injuries to a person who is on the land of another without paying to the owner,
tenant, or lessee of the land a valuable consideration for the purpose of fishing,
hunting, trapping, camping, hiking, sightseeing, motorcycling, snowmobiling, or
any other outdoor recreational use or trail use, with or without permission, against
the owner, tenant, or lessee of the land unless the injuries were caused by the
gross negligence or willful and wanton misconduct of the owner, tenant, or lessee.
“[T]he protections afforded by MCL 324.73301 apply only to the traditional premises possessors
identified by the Legislature in that statute: landowners, tenants, and lessees.” Duffy v Irons
Area Tourist Ass’n, 300 Mich App 542, 547; 834 NW2d 508 (2013).
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In granting summary disposition, the circuit court noted that it was peculiar for plaintiff
to argue that the RUA did not apply because Duncan Park was “a public park.” The circuit court
found such an argument “puzzling in that plaintiff successfully argued in the Court of Appeals
that Duncan Park was not publicly owned – presumably for the reason that if it was publicly
owned, then there would be governmental immunity . . ..” On appeal, plaintiff continues to
argue that, although the Trust may claim immunity under the RUA, the immunity does not
extend to the individual defendants. This argument fails in light of this Court’s prior decision in
Nash I. This Court specifically concluded that “[b]ecause Mrs. Duncan placed the land in an
express trust, the trustees own the land.” 304 Mich App at 624 (emphasis added). “[I]f an
appellate court has passed on a legal question and remanded the case for further proceedings, the
legal questions thus determined by the appellate court will not be differently determined on a
subsequent appeal in the same case where the facts remain materially the same.” Lenawee Co v
Wagley, 301 Mich App 134, 149; 836 NW2d 193 (2013), quoting New Props, Inc v George D
Newpower, Jr, Inc, 282 Mich App 120, 132; 762 NW2d 178 (2009). Therefore, to the extent
plaintiff argues that the trustees were not the “owners” of Duncan Park, such an argument must
fail.
Plaintiff further argues that Duncan Park is a “hybrid” in that it is privately owned
property that is open to the public. Plaintiff cites Ballard v Ypsilanti, 457 Mich 564; 577 NW2d
890 (1998) in support of its position. The circuit court rejected this argument:
Plaintiff, without any authority and after successfully arguing that the
Trust was a private creation to avoid the GTLA, now declares that this privately
owned land has morphed into publicly owned land so that the RUA does not
apply. Once again, we look at the plain language of the statute. “[A ]n owner of
land is not liable to a person who injures himself on the owner’s land ...” The
Trustees (DPT) own the land. The DPT was a private creation of Mrs. Duncan.
The Trustees administer the DPT. Therefore, the landowners are afforded the
protection of the RUA.
In a vain attempt to support her position, plaintiff cites Ballard which
simply says that the GTLA limits liability on government owned property and the
RUA limits liability on privately owned property. Ballard did not say, as plaintiff
advocates, that the RUA does not apply to privately owned lands when those
privately owned lands are held open to the public. The Supreme Court did not
make such a statement because that would gut the purpose of the RUA which is to
make privately owned lands available for recreational use by members of the
public while affording the landowner protection from liability. . . .
The RUA is not limited by the type of land, the status of the injured party
and does not differentiate between active and passive negligence. The RUA
applies to landowners, tenants and lessees. While discussing a previous iteration
of the statute, Thomas [v Consumer Power Co, 58 Mich App 486; 228 NW2d
786, rev’d in part 394 Mich 459 (1975)] held that the Legislature uses broad terms
in an attempt to cover “any recreational activity which might be imposed on the
lands of another.”
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The Trustees (DPT) own Duncan Park. In the case at bar it is undisputed
that plaintiff’s decedent was engaged in an outdoor recreational activity, snow
sledding, on the undeveloped lands, the res of the DPT, without paying any
remuneration when he was injured. These actions are within the scope of the RUA
and preclude plaintiff’s simple negligence claim against the Trustees (DPT) as
owners of the land. [Footnotes omitted.]
The trial court is correct. In Ballard, the plaintiffs’ decedents drowned while wading in a
man-made lake at a township park. Ballard, 457 Mich at 565. The estates sued the township
and the Court was asked to decide whether the RUA created an exception to governmental
immunity. The Court concluded that it did not. Id. at 566. The Ballard court initially noted that
there was no conflict between the RUA and the GTLA; instead, “[t]he GTLA limits liability on
government-owned property and the RUA limits liability on privately owned property. They do
not both apply to the same property, although they share the common purpose of limiting
liability.” Id. at 573. Quite simply, Ballard noted that the RUA “does not apply to public
property.” Id. at 576. The purposes of the RUA was to encourage property owners to open their
property to others for recreation. Id. at 576-577. Because the state “already had a vast system of
parks and forests” and because the state was already immune from tort liability, Ballard
concluded that “there is little likelihood that it was intended to encourage the state to open its
own lands for recreational uses.” Id. at 577. The Court also looked to the “liability-limiting
nature” of the RUA and found that the RUA “did not create a cause of action against landowners
where none existed before. Instead, it eliminated liability for negligence, and left liability only
for gross negligence and willful and wanton misconduct.” Id. at 577-578. Ballard provides no
support to plaintiff’s theory that Duncan Park is a “hybrid” park to which the RUA does not
apply.
Plaintiff further argues that, even if the RUA applies, there was a question of fact as to
whether defendants were grossly negligent or acted with willful and wanton misconduct. The
circuit court rejected this argument:
Plaintiff’s claims of gross negligence center on defendant’s knowledge of the
dead tree in question, that defendant knew sledding in the park was dangerous,
that defendants knew the public sledded down the hill in question, and that
defendants had the ability to remove the hazard. Plaintiff argues that several
defendants did not clean up the woods to allow for “safe” sledding.
Chance was engaged in an outdoor recreational activity on undeveloped
land. It does not matter that the Trustees knew that children were sledding down a
wooded hill. The landowner did nothing to make the forest “more dangerous” and
had no duty to make the forest “safer.” Plaintiff seems to suggest that this
undisturbed forest should be culled of all dead or dying trees, fallen branches, and
any other potential hazard that could in any way cause harm to a visitor, and
failing to do so is gross negligence. Such a standard is impractical, unworkable,
devoid of common sense, and contrary to law.
“[E]vidence of ordinary negligence does not create a material question of fact concerning
gross negligence. Rather, a plaintiff must adduce proof of conduct so reckless as to demonstrate
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a substantial lack of concern for whether an injury results.” Maiden v Rozwood, 461 Mich 109,
122–23; 597 NW2d 817 (1999) (internal quotation marks and footnoted omitted). In the context
of the GTLA, our Court has explained that gross negligence is:
almost a willful disregard of precautions or measures to attend to safety and a
singular disregard for substantial risks. It is as though, if an objective observer
watched the actor, he could conclude, reasonably, that the actor simply did not
care about the safety or welfare of those in his charge. [Tarlea v Crabtree, 263
Mich App 80, 90; 687 NW2d 333 (2004).]
“[W]illful and wanton misconduct is made out only if the conduct alleged shows an intent to
harm or, if not that, such indifference to whether harm will result as to be the equivalent of a
willingness that it does.” Jennings v Southwood, 446 Mich 125, 140; 521 NW2d 230 (1994),
quoting Burnett v City of Adrian, 414 Mich 448, 455; 326 NW2d 810. Whether a defendant has
acted grossly negligent is generally a question of fact. Id. at 88. However, “if, on the basis of
the evidence presented, reasonable minds could not differ, then the motion for summary
disposition should be granted.” Jackson v Co of Saginaw, 458 Mich 141, 146; 580 NW2d 870
(1998). The circuit court concluded that defendants could not be considered grossly negligent by
simply “failing to remove a naturally fallen tree in a forest.”
The circuit court cited Boaldin v Univ of Kansas, 747 P 2d 811 (Kan 1987), in support of
its decision. In Boaldin, a college student sued the University of Kansas after he was injured in a
sledding accident. The student used a cafeteria tray to sled. After successfully sledding down a
path on at least two occasions, the student lost control and struck a tree at the bottom of the hill.
Id. at 289-290. One of the issues to be determined by the Kansas court was whether the student
demonstrated “gross or wanton negligence.” Id. at 292. The court explained the proper
standard:
“Proof of a willingness to injure is not necessary in establishing gross and wanton
negligence. This is true because a wanton act is something more than ordinary
negligence but less than willful injury. To constitute wantonness the act must
indicate a realization of the imminence of danger and a reckless disregard or a
complete indifference or an unconcern for the probable consequences of the
wrongful act.” [Id. at 293, quoting Lee v City of Fort Scott, 238 Kan 421; 710
P2d 689 (1985).]
The student had argued gross and wanton negligence based on the fact that the defendant was
aware: (1) students were sledding and, in fact, encouraged them to do so by allowing them to use
cafeteria trays; (2) there were obstacles and trees where the sledding took place; (3) a student had
been injured in the same area before; but (4) the defendant did nothing to warn or make safe the
area. Boaldin, 242 Kan at 293-294. The Boaldin disagreed and concluded:
The fact that defendants were aware of sledding on campus and that prior
accidents had occurred is not evidence of gross and wanton conduct. Almost
every recreational activity has risks of injury, and that is the reason for adopting
[the governmental immunity statute]. If permitting recreational activity to occur
knowing that injury may result is to be considered gross and wanton conduct, then
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every governmental entity in this state would be guilty of gross and wanton
conduct. To adopt plaintiff’s argument would render meaningless the exception
from liability as contained in [the immunity statute]. The recognition of the
danger occasioned by sledding between two trees was best articulated by the
University Director of Housing: “Any time you attempt to sled close to an
immovable object, that is bad judgment. The hill is not dangerous. The tree is not
dangerous. The judgment is what’s dangerous.” We find the evidence failed to
establish gross and wanton negligence by the defendants, and therefore the
defendants are immune from liability . . . [Id. at 294–295.]
Here, the circuit court borrowed heavily from Boaldin and made the following
conclusions:
This Court agrees with the Kansas Supreme Court. At most, plaintiff may
have stated a claim of ordinary negligence in claiming that defendants knew of
downed trees and tree branches that posed hazards to those sledding down hills,
could have removed the hazards, and failed to do so. These facts do not
demonstrate a substantial lack of concern for whether an injury results. In a
heavily wooded park that was generally maintained in its natural state, pursuant to
the directive of the Trust grantor, it is responsible management, not gross
negligence, to leave tree limbs where they lay in wooded ravines. Knowledge that
some sledding children would venture beyond the open sledding slope to other,
more challenging, natural areas of the park, cannot be deemed gross negligence.
Plaintiff also claims that the fallen tree was trimmed so as to make the tree
more dangerous. Even if true, it cannot be said that trimming the branches of a
fallen tree in a forest amounts to conduct so reckless as to demonstrate a
substantial lack of concern for whether injury results.
***
Evidence that defendants knew that children used slopes ending in a
ravine in which trees and fallen branches were left to lie for sledding does not
establish that any of the defendants acted intentionally or with wanton disregard
for the safety of Chance. Plaintiff’s evidence also fails to demonstrate “such
indifference to whether harm will result as to be the equivalent of a willingness
that it does.’’
The trial court’s reasoning is sound. The inquiry was not what defendants should have done to
make the activity safer, but whether they willfully disregarded Chance’s safety. Again, this
requires something more than mere negligence. No juror could reasonably find that defendants
engaged in conduct so reckless as to demonstrate a substantial lack of concern for whether an
injury would result. Therefore, even accepting as true plaintiff’s allegations that the tree had
been down for a number of years and that a sledding accident was foreseeable, the evidence did
not create a genuine issue of material fact that defendants were grossly negligent.
III. DOCKET NO. 331869
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Plaintiff argues that the probate court erred in reforming the trust and naming the City as
the sole trustee. 1
“[A]ppeals from a probate court decision are on the record, not de novo.” In re Jajuga
Estate, 312 Mich App 706, 711; 881 NW2d 487 (2015), quoting In re Temple Marital Trust, 278
Mich App 122, 128; 748 NW2d 265 (2008). “We review the probate court’s factual findings for
clear error and its dispositional rulings for an abuse of discretion.” In re Jajuga Estate, 312
Mich App at 711. “[A] finding is clearly erroneous when, on review of the whole record, this
Court is left with the definite and firm conviction that a mistake has been made.” Boyd v Civil
Serv Comm’n, 220 Mich App 226, 235; 559 NW2d 342 (1996). “An abuse of discretion occurs
when the court’s decision falls outside the range of reasonable and principled outcomes.”
Ypsilanti Charter Twp v Kircher, 281 Mich App 251, 273; 761 NW2d 761 (2008).
At approximately the same time the circuit court was entering judgment in defendants’
favor, there was a separate proceeding in the Ottawa Probate Court. By July 2015, the trustees
had resigned and had not appointed any successors. On December 8, 2015, plaintiff, as “creditor
of the trust,” filed a petition for appointment of successor trustee, alleging that the Trust was a
necessary party to the underlying litigation. Plaintiff added that “the interested parties in this
matter are unclear but appear to be the citizens of Grand Haven . . .” Plaintiff further noted,
however, that it was “not aware of any specific individual that is a resident of Grand Haven who
would be willing and capable of acting as successor trustee in this case.” Plaintiff’s petition
simply requested “that this Court enter an Order appointing a successor Trustee.”
The City also filed a petition for reformation of the trust. The City claimed that it’s
citizens were the beneficiary of the trust and that in 1918 Mrs. Duncan deeded separate property
adjacent to Duncan Park directly to the City. It further added that continuation of the trust was
impracticable and that Mrs. Duncan’s intent would be better served by reforming the trust.
Specifically, the City noted that, in light of the private nature of the property, a trustee risked
personal liability exposure like the one in the underlying lawsuit. Private ownership also
impeded funding from groups like The Grand Haven Community Foundation, who could only
contribute to governmental and charitable organizations. Finally, the City argued that the current
governance structure lacked transparency and accountability. The City requested that it be
appointed as the sole trustee. It would then ordinance a governing structure to appoint five or
more members who could be removed for misfeasance, malfeasance or nonfeasance. Such an
arrangement would ensure that the governing board would enjoy governmental immunity, as
well as promote transparency by ensuring that the board is subject to the Freedom of Information
Act (FOIA).
Plaintiff responded that the City was not a named beneficiary of the trust. Additionally,
plaintiff argued that reformation was not necessary because the trust terms were not impractical.
The fact that successor trustees would be personally liable was based on “sound public policy
that a fiduciary would potentially be personally liable for his or her actions.” Trustee liability
1
Though the probate court proceedings use the terms “petitioner” and “respondent,” we will
continue to use the term “plaintiff” for uniformity.
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would be limited. Plaintiff also noted that the trust was a charitable trust and, therefore, eligible
to receive charitable donations. And, although the City argued that the trust lacked
accountability and transparency, the trust document gives the trustees the power to amend their
own rules. Nor would reformation further Mrs. Duncan’s intent, which was to specifically
exclude the City from governing Duncan Park.
At the January 11, 2016 hearing, plaintiff’s attorney indicated that “what we do agree
upon is the need for the appointment of a successor trustee under this trust.” Plaintiff’s counsel
indicated that plaintiff “did not have a specific proposed person, because at that time and also at
this time, we haven’t found somebody who we believe is suitable at this point in time to present
to the Judge as a successor trustee.” The probate court asked whether the search for successor
trustees rendered the trust terms impracticable, to which plaintiff’s counsel responded that
impracticability meant almost impossibility and “we might try to find someone who could serve
in that role.” Plaintiff’s counsel also noted a potential conflict because naming the City as
trustee would effectively mean that the City owned Duncan Park, which was inconsistent with
the trust. It also raised the issue of governmental immunity. Still, counsel noted “I cannot
honestly tell you today we have a name of an entity or the name of an individual to propose.”
The probate court noted:
Because of the potential – there is a potential liability hanging out there
for whoever might serve as trustee if the trust were not amended, and since you
have not been able to identify even one person, much less three, who would be
willing to serve in that capacity, I just don’t know what the Court would be able
to do to try to find someone who would be willing to do that. . . .
***
So, I don’t know how you’re going to find anybody.
Plaintiff’s attorney asked the probate court “for some direction or some time in order to come up
with a specific proposal as to who the trustee should be. We don’t have one today.”
The City’s attorney argued that plaintiff lacked standing to petition for a successor or to
oppose a reformation of the trust. He noted that plaintiff was not a resident of Grand Haven and
not a beneficiary under the trust. He further noted that if plaintiff’s motivation was to have a
successor trustee in order to proceed with the underlying litigation, “it should not matter who’s
appointed.”
THE COURT: So, making the distinction, if they want a trustee and if I
appoint the City as trustee, that end their – that ends their argument and they don’t
have standing to consider the second request, which [is] to reform the trust to
create a commission and have it being operated by commissioners?
MS. RYSBERG: Yes. Again, if – if I concede the argument for a
moment that they have standing as a creditor, they don’t have standing as a
theoretical beneficiary to be involved in the discussion of the reformation of the
trust, because their interest are limited to, again, theoretically being paid out on a
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judgment entered against a trust and a commission that was a state completely
different than what it would be moving forward.
The probate court noted that a determination of Mrs. Duncan’s intent was difficult because of the
unusual way in which she created Duncan Park – “it seems a bit of a convoluted mess.” The
City’s attorney further noted plaintiff’s petition to appoint successor trustees shows the
impracticability of continuing the trust as it was originally drafted.
The probate court issued a detailed opinion on January 21, 2016, followed by a February
29, 2016 order, which provided:
IT IS FURTHER ORDERED that (1) the City of Grand Haven is
appointed as sole successor trustee of the Duncan Park Trust; (2) the Duncan Park
Trust is reformed to allow the City to adopt an amendment to its Duncan Park
ordinance containing provisions for a governing board of five or more members
appointed by the City Council for limited terms, and removable for misfeasance,
malfeasance, or nonfeasance; and (3) that the ordinance may provide such other
terms and conditions as the City finds necessary for the effective administration of
Duncan Park.
After plaintiff voiced concerns regarding the retroactive effect of the probate court’s ruling on
issues such as governmental immunity, the order further provided: “IT IS FURTHER
ORDERED that this order is prospective only, and all previous Orders not inconsistent with the
aforementioned remain in full force and effect.”
Plaintiff’s claim that the City lacked standing to request a successor trustee warrants little
discussion. In its opinion, the probate court noted that both parties had standing to petition for
successor trustees. Plaintiff had standing by virtue of the fact that it was a potential judgment
creditor. Citing O’Leary v Bd of Fire & Water Comm’rs of Marquette, 79 Mich 281; 44 NW 608(1890), the probate court concluded that the City likewise had standing as the direct
representative of the people of Grand Haven. Both plaintiff and the City requested the same
thing – appointment of a successor trustee. Plaintiff needed a successor appointed in order to
continue its underlying action against the trust. Therefore, whether O’Leary stands for the
proposition that the City was the representative of the people of Grand Haven is of no moment.
Although the probate court technically “denied” plaintiff’s request for an appointment of a
successor trustee, plaintiff received the relief requested when, in fact, the probate court appointed
the City as the successor. Plaintiff’s issue is not really whether the City lacked standing to seek a
successor but, rather, with the probate court’s decision regarding who that successor would be.
The heart of plaintiff’s appeal is the probate court’s decision to modify the terms of the
trust. The probate court concluded:
Turning to the City’s petition, a court may modify the administrative terms
of a trust if continuation of the trust on its existing terms would be impracticable.
MCL 700.7412(1). This Court holds that continuation of the Duncan Park Trust
on its current terms would be highly impracticable for several reasons.
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First, Duncan Park is one park, not two. Duncan Park would best be
administered by the City of Grand Haven, acting in the City’s role as the direct
representative of the citizens of Grand Haven. In terms of financial and physical
resources, it is the City – rather than a private individual – that is in the best
position to carry out Mrs. Duncan’s wishes. What may have been practicable in
1913 is impracticable in 2016.
Second, personal liability for the claims brought by the Nash estate may or
may not extend to the former trustees. However, personal liability for future
accidents will be borne by future trustees, yet to be named, and will have a
chilling effect on the willingness of any person to volunteer for the job of trustee.
As noted above, neither party has been able to find persons willing to assume this
thankless and risk-laden task.
Third, Duncan Park has previously received financial support from
donors, such as the Grand Haven Community Foundation, that may make
donations only to governmental or 501(c)(3) organizations. This support will now
be impossible given the ruling by the Court of [A]ppeals declaring the trust to be
completely independent of the City. How will the Park function without support
from either the City or the Foundation? The Court notes that the Community
Foundation filed a waiver and consent to the City’s petition.
Fourth, oversight by a three-person commission is problematic. If one
member is absent or one office vacant, and the other two trustees disagree, no
decision can be made. Allowing members to find their own replacement may lead
to cronyism. A private trust is not subject to the [FOIA], MCL 15.231 et seq., or
the Open Meetings Act, MCL 15261 et seq.
Fifth, Mrs. Duncan’s intent of providing a well-maintained park for the
use and enjoyment of Grand Haven area residents will be preserved in perpetuity
by reforming the trust. As it stands now, the Trust is stuck in a legal purgatory in
which it cannot fund itself, govern itself, or even respond to the Nash Estate
lawsuit. Mowing, tree-trimming, snowplowing, signage and all manner of
necessary improvements will be left unattended unless reformation is granted.
The trial court did not err in finding that the trust terms had become impracticable. MCL
700.7412(1) provides: “The court may modify the administrative terms of a trust if continuation
of the trust on its existing terms would be impracticable or wasteful or impair the trust’s
administration.” Again, this issue warrants little discussion. Plaintiff cites In re Rood’s Estate,
41 Mich App 405, 416; 200 NW2d 728 (1972), in support of its position that impractical and
impossible are interchangeable. However, whether “impracticable” or “impossible” applies the
result is the same: given that there was no one willing to act as successor trustee due to the
potential exposure to liability, the trust terms regarding the appointment of trustees had become
both impracticable and impossible. Plaintiff argues that because there was no evidentiary
hearing, the probate court lacked evidentiary support for its conclusion. However, plaintiff must
concede that there is nothing left for an evidentiary hearing to resolve. Plaintiff conceded on
numerous occasions that no successor could be found. The lack of successor trustees, on its
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own, served as a basis for the probate court’s conclusion that the trust terms had become
impracticable and, therefore, subject to modification.
Finally, plaintiff argues that the probate court erred in appointing the City as sole trustee
because MCL 700.7402(1)(e) provides that a trust is created only if “[t]he same person is not the
sole trustee and sole beneficiary.” Plaintiff did not make this argument in the probate court.
Additionally, the trust clearly provides that the beneficiaries of the trust are the citizens of Grand
Haven, not the City itself. Moreover, we echo the concerns raised by the City’s attorney – aside
from its interest in having a successor trustee appointed in order to maintain its lawsuit, plaintiff
lacks any interest in the management of the trust such that its objections to both the modification
and the appointment should be ignored.
Affirmed. As the prevailing party, defendants may tax costs. MCR 7.219.
/s/ Joel P. Hoekstra
/s/ William B. Murphy
/s/ Kirsten Frank Kelly
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