In re Ishida-Waiakamilo Legacy Trust Dated June 27, 2006.

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Electronically Filed
Supreme Court
SCWC-13-0000449
15-JUN-2017
08:28 AM
IN THE SUPREME COURT OF THE STATE OF HAWAI#I
---o0o---
IN THE MATTER OF THE ISHIDA-WAIAKAMILO
LEGACY TRUST DATED JUNE 27, 2006
AND
IN THE MATTER OF THE ISHIDA-WINANT
LEGACY TRUST DATED JUNE 27, 2006
SCWC-13-0000449
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CAAP-13-0000449, CAAP-13-0000450;
T. NOS. 12-1-0080 and 12-1-0081)
JUNE 15, 2017
RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.
OPINION OF THE COURT BY RECKTENWALD, C.J.
This case arises from the administration of two
irrevocable trusts established by Richard and Rachel Ishida: the
Ishida-Waiakamilo Legacy Trust (Waiakamilo Trust), and the
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Ishida-Winant Legacy Trust (Winant Trust) (collectively, “the
Trusts”). The Trusts name as beneficiaries the Ishidas’
daughters Jeri S. Wilson (Jeri) and Juney M. Ishida (Juney), and
their granddaughter Kauialohaokalani R. Wilson (Kaui), but they
expressly exclude the Ishidas’ third daughter, Richardeen Kimura
(Deenie). Six years after the creation of the Trusts, the
Ishidas filed petitions in Probate Court of the First Circuit
(probate court) requesting rescission of both Trusts. The
Ishidas alleged that they never intended to make the Trusts
irrevocable, and that Jeri had wrongfully transferred ownership
of property from the Waiakamilo Trust to herself. Jeri and Juney
opposed the petitions.
The probate court found that the transfer of property
to Jeri had violated the terms of the Waiakamilo Trust, ordering
the property returned to the Trust; it declined to rescind or
reform the Trusts. The Ishidas appealed to the Intermediate
Court of Appeals (ICA), which affirmed the probate court’s denial
of their petitions.
The Ishidas’ Application for Writ of Certiorari
presents two issues to this court: 1) whether that the probate
court’s failure to return the Waiakamilo Trust property to the
Ishidas was an abuse of discretion in light of alleged wrongdoing
by Jeri, and 2) whether the ICA improperly discounted the
evidentiary value of the Ishidas’ petitions, which were verified
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pursuant to Hawai#i Probate Rules (HPR) Rule 5(a).
First, we hold that the probate court did not err in
denying the Ishidas’ requested relief, as the matter was within
the court’s equitable discretion. Second, we affirm the ICA’s
holding that the probate court was not required to accept the
Ishidas’ petitions at face value, and in doing so we clarify the
status of HPR Rule 5(a) statements in relation to other types of
testimonial evidence.
I. Background
The Ishidas hired an attorney to draft documents
creating the Trusts, which they executed on June 27, 2006. The
Ishidas settled each Trust with a single residential and/or
commercial property. Jeri and Juney were named as trustee for
the Waiakamilo Trust and Winant Trust, respectively. The
Waiakamilo Trust designates Jeri as beneficiary, with full
ownership of the Trust’s property passing to Jeri’s daughter Kaui
upon Jeri’s death. The Winant Trust provides that its property
will be distributed to Juney as beneficiary upon the death of the
Ishidas, with full ownership passing to Kaui upon Juney’s death.
The Trusts are irrevocable, with both including the following
provision:
Section 3. Irrevocable Trust
Our Trust is irrevocable. Except as expressly herein
provided to the contrary, no Trustor or any other
person shall have any right or power to alter, amend,
or in any manner whatsoever modify any of the
provisions hereof.
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Additionally, both the Waiakamilo Trust and the Winant
Trust specifically exclude the Ishidas’ third daughter, Deenie,
with both Trusts including the following provision:
c. Exclusions
We hereby exclude RICHARDEEN R. KIMURA and such
person’s descendants as beneficiaries under our Trust
Agreement, including without limitation for the
purposes of intestate succession. For the purposes of
our Trust Agreement, all excluded persons shall be
treated as having died prior to the execution of our
Trust Agreement.
On March 28, 2007, Jeri and the Ishidas executed a
series of deeds, transferring ownership of the Waiakamilo Trust
property (Waiakamilo Property) from the trust to Jeri personally.
On May 4, 2012, the Ishidas filed in probate court a
Petition for Rescission of Warranty Deed, Imposition of
Constructive Trust and an Order for Disgorgement related to the
Waiakamilo Trust (Waiakamilo Petition), and a Petition for
Reformation of Trust and/or Order Setting Aside the Ishida-Winant
Trust (Winant Petition). The Ishidas alleged that, although they
had asked their attorney to make simple wills and revocable
trusts as part of their estate planning, their attorney went
against their wishes and designed the Waiakamilo and Winant
Trusts to be irrevocable. The Ishidas further claimed that Jeri
had schemed with their attorney to transfer the Waiakamilo
Property to Jeri personally in the March 28, 2007 deeds.
Accordingly, the Ishidas asked the probate court to rescind the
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deed transferring the Waiakamilo Property to Jeri, and to set
aside both Trusts and restore ownership of Trust properties to
the Ishidas. In apparent compliance with HPR Rule 5(a),1 both
petitions included the following text above the Ishidas’
signatures:
THE UNDERSIGNED UNDERSTANDS THAT THIS DOCUMENT IS
DEEMED TO INCLUDE AN OATH, AFFIRMATION, OR STATEMENT
TO THE EFFECT THAT ITS REPRESENTATIONS ARE TRUE AS FAR
AS THE UNDERSIGNED KNOWS OR IS INFORMED, AND PENALTIES
FOR PERJURY MAY FOLLOW DELIBERATE FALSIFICATION.
Jeri and Juney (Respondents) disputed the Ishidas’
account of the Trusts’ creation, claiming that the Ishidas
intentionally made the trusts irrevocable because they had
disinherited Deenie. Respondents further contended that Deenie
1
HPR Rule 5 (1999) provided:
Rule 5. SIGNING OF PLEADINGS.
(a) Verification of Pleadings; Affidavits. All
pleadings (other than those signed by a party’s
attorney) shall include a statement at the end and
before the signature of the person presenting the
pleading to the effect that the person understands
that the document is deemed to include an oath,
affirmation, or statement to the effect that its
representations are true as far as the person
executing or filing it knows or is informed, and that
penalties for perjury may follow deliberate
falsification. Such a statement shall be accepted in
lieu of an affidavit as to the facts stated in the
pleading. The signature of an applicant in informal
proceedings shall be notarized.
If a pleading requires consideration of facts
not appearing of record or verified as provided above,
it shall be supported by affidavit, signed by the
person having knowledge of the facts and competent to
testify. An attorney may submit a declaration in lieu
of an affidavit to support facts outside of the
record.
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had recently reconciled with their parents, and that she was
behind the petitions. Respondents also alleged that the transfer
of property from the Waiakamilo Trust to Jeri personally had been
done with the Ishidas’ knowledge in order to avoid “issues”
raised by the Ishidas’ accountant. Respondents concluded that
“further discovery into the Ishidas’ allegations is required as
they raise issues of material fact,” asking that both petitions
be assigned to the civil trials calendar pursuant to HPR Rule
20(a).2
The Ishidas replied to Respondents’ objections,
asserting, “[w]hile the allegations against Deenie are absolutely
untrue, they are irrelevant and the Ishidas will not address
them.” The Ishidas urged the probate court to grant their
petitions forthwith, arguing that “the equities of the case, as
well as public policy” required immediate relief. The Ishidas
opposed discovery or otherwise prolonging the proceedings in
court, asserting that “the Court has all the information it needs
to declare the transfer void and return the [Trust properties] to
[their] rightful owners, the Ishidas.”
After a hearing, the probate court issued an order
rescinding the March 28, 2007 deeds and restoring the Waiakamilo
2
HPR Rule 20(a) (1995) provides:
(a) Assignment. The court by written order may retain
a contested matter on the regular probate calendar or
may assign the contested matter to the civil trials
calendar of the circuit court.
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Property to the Waiakamilo Trust, finding that the transfer had
violated the terms of the Waiakamilo Trust. However, the probate
court denied all other relief requested. The Ishidas filed
petitions for reconsideration of the orders, which the probate
court denied, and final judgment was entered for both petitions
on May 2, 2013.
The Ishidas appealed to the ICA, arguing that the
probate court erred in 1) failing to “right the injustice done to
the Ishidas” by refusing to set aside the Trusts and restore the
Properties to the Ishidas, and 2) failing to reform the Trusts
because they “were a mistake.” Accordingly, the Ishidas urged
the ICA to reform or set aside the Waiakamilo and Winant Trusts,
or in the alternative, to impose constructive trusts on the
Waiakamilo and Winant Trust properties.
In a published opinion, the ICA examined each of the
Ishidas’ arguments in turn, finding that the Ishidas had failed
to show by clear and convincing evidence circumstances warranting
the reformation of the Trusts or other equitable relief. In re
Ishida Waiakamilo Legacy Trust, 138 Hawai#i 98, 103–09, 377 P.3d
39, 44–50 (App. 2016). Regarding the evidence presented by the
Ishidas, ICA stated:
On appeal, the Ishidas refer to “compelling evidence”
and “the clear testimony of the Settlors regarding
their own intent and the mistake that was made,” in
apparent reference to the Ishidas’ signatures on the
Waiakamilo Petition following a statement that:
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THE UNDERSIGNED UNDERSTANDS THAT THIS DOCUMENT
IS DEEMED TO INCLUDE AN OATH, AFFIRMATION, OR
STATEMENT TO THE EFFECT THAT REPRESENTATIONS ARE
TRUE AS FAR AS THE UNDERSIGNED KNOWS OR IS
INFORMED, AND PENALTIES FOR PERJURY MAY FOLLOW
DELIBERATED FALSIFICATION.
. . . .
As set forth in HPR Rule 5(a), this attestation is
accepted in lieu of a sworn affidavit to the same
effect, i.e., that the information contained therein
is true as far as the affiant knows or is informed,
and thus satisfied the requirements of the rule. It is
not, however, identical in every way to testimony that
has been subject to cross-examination, or a sworn
affidavit, or a declaration made under penalty of law,
that specified factual statements are true and
correct. It is within the province of the trial court
to determine the credibility of a witness and the
weight to be given to a witness’s testimony.
See, e.g., Tamashiro v. Control Specialist, Inc., 97
Hawai#i 86, 92, 34 P.3d 16, 22 (2001). Written
testimony that could be based upon limited memory or
knowledge, or information and belief, rather than
personal knowledge, particularly testimony that
purports to reflect the joint recollection and intent
of two people, without distinction, might reasonably
be viewed as less reliable or less convincing than
other forms of evidence.
Id. at 106–07, 377 P.3d at 47–48.
The ICA also determined that the creation of the
irrevocable trusts was not “so inherently improvident and
unreasonable” that the probate court was required to infer that
it was the product of delusion or mental infirmity. Id. at 109,
377 P.3d at 50 (citing Love v. Love, 17 Haw. 206, 215 (1905)).
Accordingly, the ICA concluded that the probate court did not
abuse its discretion when it declined to impose a constructive
trust on the Trust properties or otherwise return them to the
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Ishidas. Id. The ICA thus affirmed the probate court’s
judgments. Id.
II. Standards of Review
A. Equitable Relief
“The relief granted by a court in equity is
discretionary and will not be overturned on review unless the
circuit court abused its discretion by issuing a decision that
clearly exceeds the bounds of reason or disregarded rules or
principles of law or practice to the substantial detriment of the
appellant.” Aickin v. Ocean View Invs. Co., Inc., 84 Hawai#i
447, 453, 935 P.2d 992, 998 (1997) (internal quotation marks,
citation, and brackets omitted).
B. Interpretation of Court Rules
The interpretation of a court rule is reviewed de novo.
Sierra Club v. Dep’t of Transp., 120 Hawai#i 181, 197, 202 P.3d
1226, 1242 (2009).
III. Discussion
In their Application for Writ of Certiorari, the
Ishidas argue that the ICA erred in 1) holding that the probate
court did not abuse its discretion when it declined to impose a
constructive trust on the Waiakamilo Property or otherwise return
it to the Ishidas; and 2) concluding that the Ishidas’ statements
in their petitions were “less reliable and less convincing,” even
though those statements were verified pursuant to HPR Rule 5(a).
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A. Denial of Equitable Relief
The ICA did not err in finding that the Ishidas failed
to produce clear and convincing evidence that the Trusts were the
result of mistake or other grounds justifying equitable relief.
“A constructive trust arises where a person holding
title to property is subject to an equitable duty to convey it to
another on the ground that he would be unjustly enriched if he
were permitted to retain it.” Kam Oi Lee v. Fong Wong, 57 Haw.
137, 139, 552 P.2d 635, 637 (1976) (citation omitted). Hawai#i
courts will impose a constructive trust “where the evidence is
clear and convincing” that the grantee will be unjustly enriched
if allowed to retain the entire property. Maria v. Freitas, 73
Haw. 266, 274, 832 P.2d 259, 264 (citation omitted). The
Restatement (Third) of Property explains the rationale for this
high standard:
When a donative document is unambiguous, evidence
suggesting that the terms of the document vary from
intention is inherently suspect but possibly
correct. . . . Only high-safeguard allowance of
extrinsic evidence achieves the primary objective of
giving effect to the donor’s intention.
Restatement (Third) of Property § 12.1 cmt. b (Am. Law Inst.
2003) (emphasis added).
Here, the Waiakamilo Trust is unambiguous, stating in
bold type that it is an irrevocable trust. The Ishidas thus had
to offer clear and convincing evidence that Jeri would be
unjustly enriched if the Waiakamilo Trust remained unaltered.
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They failed to do so. The Waiakamilo Petition made a colorable
argument that the Ishidas did not intend to make the Waiakamilo
Trust irrevocable, but Respondents made an equally plausible
argument that the Ishidas simply changed their minds regarding
the Trusts as a result of their alleged reconciliation with
Deenie. Moreover, the Ishidas provided little evidence to
support their arguments beyond the bare assertions in the
Waiakamilo Petition, and they opposed discovery or assignment of
their case to the civil trials calendar–-steps which might have
allowed them to adduce additional evidence in support of their
position. Faced with two competing stories and scant evidence,
it was well within the probate court’s discretion to deny
equitable relief. See, e.g., Aickin 84 Hawai#i at 449 n.1, 935
P.2d at 994 n.1 (“Equity is a discretionary remedy; the trial
court was not obligated to grant it.”). Thus, the ICA did not
err in affirming the probate court’s denial of the Ishidas’
request to impose a constructive trust upon the Waiakamilo
Property.
B. Verification
The Ishidas argue that the ICA erred “because it should
have treated the Ishidas’ account of their intent and experiences
as personal, and thus constituted personal knowledge.” In
support of this contention, the Ishidas cite HPR Rule 5(a),
arguing that pursuant to this rule their petitions “had the
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effect of an affidavit.” The Ishidas also assert that the ICA
displayed “uncritical reliance” on similarly verified statements
from Respondents’ briefs, arguing that there is “no principled
reason to treat the Ishidas’ and Jeri/Juney’s Rule 5(a)
statements differently, as the ICA did.”3 Lastly, the Ishidas
argue that the ICA’s position “will undermine the Rule 5(a)
verification” routinely relied upon in probate filings.
We agree with the Ishidas’ argument to the extent that
a portion of the ICA’s opinion does have the potential to
“undermine Rule 5(a) verification.” Referring to the
verification language in the Ishidas’ petitions,4 the ICA stated:
It is not, however, identical in every way to
testimony that has been subject to cross-examination,
or a sworn affidavit, or a declaration made under
penalty of law, that specified factual statements are
true and correct.
In re Ishida Waiakamilo Legacy Trust, 138 Hawai#i at 107, 377
P.3d at 48 (emphasis in original).
To the extent that this sentence suggests that a
statement verified pursuant to HPR Rule 5(a) has less evidentiary
3
Although the ICA refers to claims made in Respondents’ verified
statements, it does not make findings regarding the veracity of these claims.
See, e.g., In re Ishida Waiakamilo Legacy Trust, 138 Hawai#i at 108, 377 P.3d
at 49 (“in her objection, Jeri averred that . . . .”)
4
As noted above, the following text based on HPR Rule 5(a) is
printed above the signature block on the Waiakamilo and Winant Petitions:
THE UNDERSIGNED UNDERSTANDS THAT THIS DOCUMENT IS
DEEMED TO INCLUDE AN OATH, AFFIRMATION, OR STATEMENT
TO THE EFFECT THAT ITS REPRESENTATIONS ARE TRUE AS FAR
AS THE UNDERSIGNED KNOWS OR IS INFORMED, AND PENALTIES
FOR PERJURY MAY FOLLOW DELIBERATE FALSIFICATION.
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weight than a sworn affidavit, it is in error. HPR Rule 5(a)
provides that a verified statement “shall be accepted in lieu of
an affidavit as to the facts stated in the document.”5 A court
must thus accord a statement verified pursuant to HPR 5(a) the
same evidentiary weight it would a sworn affidavit of identical
content.
However, on the whole the ICA’s analysis is correct in
its affirmance of the probate court’s judgments. The ICA did not
display “uncritical reliance” on Jeri and Juney’s verified
petitions, but rather reviewed the record in accordance with the
relevant standard. As stated in the ICA’s opinion:
We consider the Ishidas’ verification in the context
of the clear and convincing evidence standard
applicable to their request for equitable relief from
the unambiguous terms of the Waiakamilo Trust.
In re Ishida Waiakamilo Legacy Trust, 138 Hawai#i at 107, 377
P.3d at 48.
The ICA correctly noted that “it is within the province
of the trial court to determine the credibility of a witness and
the weight to be given to a witness’s testimony.” Id. Whether
or not the Ishidas’ statements in their petitions constituted
5
As noted by the commentary to HPR Rule 5:
Because the Registrar processes a large number of
informal applications filed by pro se applicants, it
is important to provide an easy mechanism for the
Registrar to determine that the applicant is who he or
she claims to be. A notarized signature gives the
Registrar this proof without adding any significant
cost to the probate process.
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clear and convincing evidence was a question clearly within the
probate court’s discretion. The ICA carefully considered the
record, and it correctly concluded that the probate court did not
abuse its discretion in declining to impose a constructive trust
or other otherwise modify the Trusts in light of the evidentiary
burden the Ishidas were required to satisfy.
IV. Conclusion
For the foregoing reasons, the ICA did not err in
affirming the probate court’s judgment. Thus, the ICA’s
September 6, 2016 judgment on appeal is affirmed.
Margery S. Bronster, /s/ Mark E. Recktenwald
Rex Y. Fujichaku, and
Angela K.H. Jacso /s/ Paula A. Nakayama
for petitioners
/s/ Sabrina S. McKenna
Michael A. Lilly and
Valerie M. Kato /s/ Richard W. Pollack
for respondents
/s/ Michael D. Wilson
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