Allen v. Campbell

IN THE SUPREME COURT OF THE STATE OF IDAHO
DOCKET NO. 48452
JAMES ALLEN, an individual; JESSICA )
ALLEN TCHOUKALOV, an individual; )
ADAM ALLEN, an individual; MATTHEW )
ALLEN, an individual; KIRSTEN ALLEN, )
an individual; and MICHAEL ALLEN, an )
individual, )
)
Plaintiffs-Appellants, )
)
v. )
)
NEIL CAMPBELL and TAMRA )
CAMPBELL, husband and wife; NEIL )
CAMPBELL as trustee of the BRIAN ) Boise, September 2021 Term
VILLET CAMPBELL AND DORIS )
HAMILTON CAMPBELL JOINT TRUST, ) Opinion Filed: December 2, 2021
dated May 23, 2011; VICKEY FREELAND, )
as trustee of the BRIAN VILLET ) Melanie Gagnepain, Clerk
CAMPBELL AND DORIS HAMILTON )
CAMPBELL JOINT TRUST, dated May 23, )
2011; CONNIE JO WOODS, as trustee of the )
BRIAN VILLET CAMPBELL AND DORIS )
HAMILTON CAMPBELL JOINT TRUST, )
dated May 23, 2011; and BRIAN )
CAMPBELL, JR., trustee of the BRIAN )
VILLET CAMPBELL AND DORIS )
HAMILTON CAMPBELL JOINT TRUST, )
dated May 23, 2011, )
)
Defendants-Respondents. )
_______________________________________ )
Appeal from the District Court of the Seventh Judicial District of the State of
Idaho, Bonneville County, Darren B. Simpson, District Judge.
The decision of the district court is reversed.
Parsons, Behle & Latimer, Idaho Falls, for appellants. John E. Cutler argued.
Cooper & Larsen, Chartered, Pocatello, and Turner Law Firm, Dunnellon,
Florida, for respondents. J.D. Oborn of Cooper & Larsen, Chartered, argued.
_____________________
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BRODY, Justice.
This is a case about proper venue in a trust dispute. Appellants sued Respondents over
alleged self-dealing and other purported breaches of fiduciary duty in the administration of a
trust. Respondents argued that proceedings in Idaho were improper under the provisions of Title
15, chapter 7 of the Idaho Code (the “trust code”) because they alleged that the principal place of
the Trust’s administration was in Indiana. The district court agreed and dismissed Appellants’
complaint. We reverse.
I. FACTUAL AND PROCEDURAL BACKGROUND
A. Factual background.
Brian Campbell, Sr., and Doris Campbell were the settlors and original trustees of the
Brian Villet Campbell and Doris Hamilton Campbell Joint Trust (“the Trust”), which they
established to distribute their assets upon the latter of their deaths. Respondents are the settlors’
four living children, as well as Tamra Campbell, wife of respondent Neil Campbell; Appellants
are the settlors’ grandchildren from a daughter who predeceased them.
Brian Sr. passed away in 2014 and Doris passed away in 2015. When Doris died, the four
surviving children (Respondents Neil Campbell, Vickey Freeland, Brian Campbell, Jr., and
Connie Jo Woods) became successor co-trustees of the Trust. One of the grandchildren
(Appellant Kirsten Allen) was also a successor co-trustee, but resigned from that position before
this lawsuit was commenced. For simplicity, Appellants are hereinafter referred to as
“Beneficiaries” (although most of the Respondents are also beneficiaries of the Trust), and
Respondents are hereinafter referred to as “Trustees” (although Tamra is not a trustee).
When Doris died, her home in Bonneville County was among the Trust’s assets. The
underlying dispute between Beneficiaries and Trustees stems, in part, from the Trust’s sale of
Doris’ home to Neil and Tamra, allegedly based on an outdated appraisal and after Neil and
Tamra had occupied the home for a period without paying rent.
B. Procedural background.
In November 2019, Beneficiaries sued Trustees in Bonneville County seeking rescission
of the sale of Doris’ home to Neil and Tamra, an accounting of the Trust, damages from alleged
breaches of fiduciary duty, removal of the co-trustees, distribution of Trust assets, and
termination of the Trust. In February 2020, Trustees moved to dismiss Beneficiaries’ complaint
under Idaho Rule of Civil Procedure 12(b), citing several bases for dismissal. Relevant here is
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their argument that dismissal was warranted for lack of subject matter jurisdiction under Rule
12(b)(1).
As an exhibit to their motion to dismiss, Trustees attached a power of attorney executed
in the spring of 2015. The power of attorney designated Respondent Vickey Freeland as
attorney-in-fact for the Trust, empowering her “to do all financial acts pertaining to the needs
and requirements of the Trust which [the Trust’s co-trustees] could do jointly by majority if
present.” According to Trustees, the power of attorney proved that the Trust had its principal
place of administration at Vickey’s residence in Indiana. Thus, Trustees argued that subject
matter jurisdiction was not proper in Idaho under the provisions of the trust code.
Beneficiaries disputed that the district court could consider the power of attorney.
However, if the district court chose to do so, Beneficiaries maintained that the court was
obligated to convert Trustees’ motion to dismiss into a motion for summary judgment under Rule
12(d) of the Idaho Rules of Civil Procedure. If converted into a motion for summary judgment,
Beneficiaries argued the motion failed because they disputed that the Trust’s principal place of
administration was in Indiana rather than Idaho, where Brian Sr. and Doris had administered the
Trust during their lives. Beneficiaries also challenged the legal effect and validity of the power of
attorney itself, but this issue has not been argued on appeal nor considered by this Court.
In April 2020, Beneficiaries filed their own motion for summary judgment as to most
counts in their complaint.
The district court held a hearing in May 2020, at which the parties presented oral
argument on Trustees’ motion to dismiss. The district court issued an order granting Trustees’
motion in June 2020. In its order, the district court considered the power of attorney, but it did
not convert Trustees’ motion to dismiss into a motion for summary judgment and, therefore, did
not draw all reasonable inferences in favor of Beneficiaries as the non-moving party. See Tech
Landing, LLC v. JLH Ventures, LLC, 168 Idaho 482, 483 P.3d 1025, 1029 (2021) (articulating
the standard of review applicable to a motion for summary judgment). Instead, it construed
Trustees’ motion to dismiss and attachment of the power of attorney as a factual attack on
subject matter jurisdiction. The district court held that in a factual challenge to subject matter
jurisdiction, it was required to go beyond the pleadings and weigh evidence submitted by the
parties without affording Beneficiaries a presumption in their favor. See Owsley v. Idaho Indus.
Comm’n, 141 Idaho 129, 133, 106 P.3d 455, 459 (2005) (noting that challenges to subject matter
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jurisdiction may be facial or factual and articulating the appropriate standard of review for each).
The district court also concluded that Beneficiaries bore the burden to establish a factual basis
for subject matter jurisdiction. Applying this standard, the district court considered the power of
attorney and various declarations submitted by the parties in connection with Trustees’ motion to
dismiss and Beneficiaries’ motion for summary judgment. The district court determined that (1)
the principal place of the Trust’s administration was in Indiana; (2) Indiana could exercise
personal jurisdiction over the parties; (3) and that the interests of justice would not be impaired
by litigating in Indiana rather than Idaho. The district court then dismissed Beneficiaries’
complaint pursuant to section 15-7-203 of the trust code.
Beneficiaries moved for reconsideration and the district court held a hearing in August
2020. The district court denied the motion for reconsideration in October 2020. Beneficiaries
timely appealed to this Court.
II. STANDARD OF REVIEW
The Court has free review over questions of law, including issues of jurisdiction and
statutory interpretation. Tucker v. State, 162 Idaho 11, 17, 394 P.3d 54, 60 (2017) (citing In re
Jerome Cnty. Bd. of Comm’rs, 153 Idaho 298, 308, 281 P.3d 1076, 1086 (2012)); Kelly v. TRC
Fabrication, LLC, 168 Idaho 788, 487 P.3d 723, 726 (2021) (citing Robison v. Bateman-Hall,
Inc., 139 Idaho 207, 209, 76 P.3d 951, 953 (2003)).
III. ANALYSIS
The trust code governs the administration of trusts in Idaho, including provisions
regarding jurisdiction and venue in actions between beneficiaries and trustees. Section 15-7-101
imposes a duty on the trustees of a trust administered in Idaho to register the trust “in the court of
this state at the principal place of administration.” The operation of several provisions in the trust
code depends on whether a trustee has complied with this duty. See, e.g., I.C. §§ 15-7-103, -104,
-201, -202. Relevant here, when a trust has been registered, “[t]he court of registration has
exclusive jurisdiction of proceedings initiated by interested parties concerning the internal affairs
of trusts.” I.C. § 15-7-201(a). However, when a trust has not been registered, a trustee is subject
to the personal jurisdiction of, and venue is proper in, any court where the trust could have been
registered. I.C. §§ 15-7-104, -202.
That said, even where proceedings are otherwise proper in an Idaho court, section 15-7-
203 provides that a court should decline to hear cases in certain circumstances:
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The court will not, over the objection of a party, entertain proceedings under
section 15-7-201 of this Part involving a trust registered or having its principal
place of administration in another state, unless (1) when all appropriate parties
could not be bound by litigation in the courts of the state where the trust is
registered or has its principal place of administration or (2) when the interests of
justice otherwise would seriously be impaired. The court may condition a stay or
dismissal of a proceeding under this section on the consent of any party to
jurisdiction of the state in which the trust is registered or has its principal place of
business, or the court may grant a continuance or enter any other appropriate
order.
I.C. § 15-7-203. Stated differently, an Idaho court should dismiss a case involving the
administration of a trust where four conditions are met: (1) a party objects to proceeding in
Idaho; (2) the court finds either (a) the trust has been registered in another state or that (b) its
principal place of administration is in another state; (3) the court finds that all appropriate parties
can be bound in the courts of the other state; and (4) the court finds that the interests of justice
will not be seriously impaired by dismissing the case. Id.
Here, the district court dismissed Beneficiaries’ complaint because it found it lacked
subject matter jurisdiction under section 15-7-203. Beneficiaries argue that the district court
made several errors in its application of this section, and that applied correctly, their complaint
should not have been dismissed. Before addressing Beneficiaries’ arguments, however, we must
reframe the central issue in this case. Despite the way the issues were characterized below and
have been argued on appeal, this is not a case about subject matter jurisdiction.
A. Idaho Code section 15-7-203 pertains to venue, not subject matter jurisdiction.
“While the general concept of jurisdiction . . . is very broad and has many facets,
jurisdiction over the subject matter is a narrow and well-defined aspect of the broader concept.”
Sierra Life Ins. Co. v. Granata, 99 Idaho 624, 628, 586 P.2d 1068, 1072 (1978) (citations
omitted). Subject matter jurisdiction concerns only the inherent authority of the court to exercise
judicial power:
Jurisdiction over the subject matter is the right of the court to exercise judicial
power over that class of cases; not the particular case before it, but rather the
abstract power to try a case of the kind or character of the one pending; and not
whether the particular case is one that presents a cause of action, or under the
particular facts is triable before the court in which it is pending . . . .
Id. (quoting Richardson v. Ruddy, 15 Idaho 488, 494, 98 P. 842, 844 (1908)). In other words,
subject matter jurisdiction is an incident of the creation of a court (either by constitution or
statute), which is untouched by the parties’ positions, arguments, and preferences, and unaffected
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by a court’s discretion. See id. (quoting Boughton v. Price, 70 Idaho 243, 215 P.2d 286 (1950)
(“Such jurisdiction the court acquires by the act of its creation, and possesses inherently by its
constitution; and it is not dependent upon the sufficiency of the bill or complaint, the validity of
the demand set forth in the complaint, or plaintiff’s right to the relief demanded, the regularity of
the proceedings, or the correctness of the decision rendered.”). Because the application of section
15-7-203 turns on a party’s objection and involves a determination by the court about the relative
interests of justice in dismissing versus proceeding with the action, it is plain that the statute does
not pertain to subject matter jurisdiction.
That said, it is understandable that the parties and the district court treated section 15-7-
203 as bearing on subject matter jurisdiction because this Court essentially said so forty years
ago. In Rasmuson v. Walker Bank & Trust Company, 102 Idaho 95, 625 P.2d 1098 (1981), we
held that “[i]n order to determine the district court’s subject matter jurisdiction, [Idaho Code
sections] 15-7-201, 15-7-202, and 15-7-203 must all be reviewed.” Id. at 98–99, 625 P.2d 1101–
02. But a close reading of Rasmuson reveals that we misspoke because, shortly after the remark
about subject matter jurisdiction, we recognized that section 15-7-203 is a statutory embodiment
of the equitable doctrine of forum non conveniens. Id.at 99, 625 P.2d at 1102. This conclusion is
borne out by the uniform law comment to section 15-7-203, which states in pertinent part, “the
issue is essentially only one of forum non conveniens in having litigation proceed in the most
appropriate forum. This is the function of this section.” However, forum non conveniens is a
doctrine involving venue, not jurisdiction. 20 Am. Jur. 2d Courts § 109 (“Forum non conveniens
is a discretionary doctrine which vests in the courts the power to abstain from the exercise of
jurisdiction even where authorized by statute if the litigation can more appropriately be
conducted in a foreign tribunal.”). In other words, section 15-7-203 pertains to the proper
exercise of judicial power, not to its existence.
This is a fine distinction, but an important one. A lack of subject matter jurisdiction
cannot be waived, no matter the stage of litigation, and orders entered without subject matter
jurisdiction are void and subject to collateral attack. State v. Lute, 150 Idaho 837, 840, 252 P.3d
1255, 1258 (2011) (quoting State v. Urrabazo, 150 Idaho 158, 162, 244 P.3d 1244, 1248 (2010),
abrogated on other grounds by Verska v. Saint Alphonsus Reg’l Med. Ctr., 151 Idaho 889, 265
P.3d 502 (2011)). On the other hand, issues of venue may be irrevocably waived, and an order
entered despite improper venue is valid and enforceable. See I.R.C.P. 12(h)(4). As such, “it may
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work considerable mischief to confuse lack of jurisdiction over the subject matter with questions
of venue . . . .” Sierra Life Ins. Co., 99 Idaho at 626–27, 586 P.2d at 1070–71. To avoid such
mischief, we take this opportunity to correct the misstatement in Rasmuson; inasmuch as that
case suggested that section 15-7-203 pertains to subject matter jurisdiction, it is disavowed.
We also take this opportunity to note that a lack of subject matter jurisdiction only occurs
in our district courts in very limited circumstances. As established by the Idaho Constitution,
Idaho’s district courts are courts of general jurisdiction. Idaho Const. art. V, § 20 (“The district
court shall have original jurisdiction in all cases, both at law and in equity, and such appellate
jurisdiction as may be conferred by law.” (Emphasis added).) Thus, the only limitation of a
district court’s subject matter jurisdiction likely to arise with any frequency is preemption by
federal law. See e.g., Stevenson v. Prairie Power Co-op., Inc., 118 Idaho 52, 56–57, 794 P.2d
641, 645–46 (Ct. App. 1989), aff’d, 118 Idaho 31, 794 P.2d 620 (1990) (discussing federal
preemption of state court subject matter jurisdiction in certain matters relating to bankruptcy).
We have frequently encountered cases like this one where an issue is incorrectly couched as
bearing on subject matter jurisdiction. Cognizant that we have not always been precise in
distinguishing between jurisdiction as a general concept and the narrow concept of subject matter
jurisdiction, we note (as this case demonstrates) that we must all be mindful of this important
distinction whenever questions of jurisdiction arise.
B. The district court erred in granting Trustees’ motion to dismiss.
Beneficiaries argue that the district court erred in its interpretation and application of
section 15-7-203, including misallocating the burden of proof to Beneficiaries and erroneously
determining that all appropriate parties could be bound by litigation in Indiana. Because we
agree with these contentions, and these errors alone warrant reversal of the district court’s
decision, we need not consider Beneficiaries’ remaining arguments.
1. The burden of proof under section 15-7-203 rested with Trustees.
Construing section 15-7-203 as a statute pertaining to subject matter jurisdiction, the
district court held that Beneficiaries “bear the burden of showing that jurisdiction does in fact
exist.” Beneficiaries argue that the district court erred in allocating the burden of proof to them
because section 15-7-203 functions as an exception to the exercise of jurisdiction and the burden
to show an exception applies generally rests with the party invoking it. We agree with
Beneficiaries; the burden of proof rested with Trustees.
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Section 15-7-203 clearly contemplates proceedings remaining in Idaho unless a party
objects and the statute’s conditions are met. As we noted in Matter of Bowman’s Estate, 101
Idaho 131, 309 P.2d 663 (1980), an objector generally bears the burden of proving a statutory
exception applies. Id. at 135, 309 P.2d at 667. This comports with the elementary legal principle
that parties requesting a court to take an action “must provide adequate factual and legal support
for their positions . . . .” 56 Am. Jur. 2d Motions, Rules, and Orders § 23.
Trustees’ arguments to the contrary are not well taken. First, Trustees contend that “the
[d]istrict [c]ourt did not assign the beneficiaries the burden of proof” and that Beneficiaries “cite
to no legal authority” in advancing their argument. These assertions are contradicted by the order
granting the Trustees’ motion to dismiss and a cursory review of Beneficiaries’ brief, which
provided ample authority and analysis on this issue. Trustees’ next argument fares little better.
Trustees contend that Beneficiaries’ argument regarding the burden of proof is “made-up”
because “the word ‘exception’ does not appear anywhere in . . . section [15-7-]203.” While it is
true that the word “exception” does not appear in the statute, the word “unless” does appear and
“unless” is synonymous with “except.” Unless, MERRIAM-WEBSTER, https://www.merriam-
webster.com/dictionary/unless, (last visited Oct. 7, 2021) (defining “unless” as “except on the
condition that”).
Trustees also contend that accepting Beneficiaries’ argument would “create a new
shifting burden of proof” that would “turn[] the law upside down[.]” This contention would only
merit consideration if subject matter jurisdiction were at issue. As a general rule, the burden of
proof remains with the party asserting subject matter jurisdiction, even after a factual attack. See
61A Am. Jur. 2d Pleading § 451 (“[B]y making a factual attack on subject-matter jurisdiction in
the context of a Rule 12(b)(1) motion to dismiss, the defendant shifts to the plaintiff the burden
of proving by a preponderance of the evidence, or proof to a reasonable probability that the court
has subject-matter jurisdiction”). However, as we have explained, subject matter jurisdiction is
not at issue and Trustees bore the burden to establish that dismissal was warranted.
2. Trustees failed to carry their burden under section 15-7-203.
Dismissal under section 15-7-203 is proper only if “all appropriate parties” could “be
bound by litigation in the courts of the state where the trust is registered or has its principal place
of administration.” I.C. § 15-7-203. While the district court determined that Indiana could
exercise personal jurisdiction over Neil, Vickey, Connie Jo, and Brian, Jr., based on their status
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as co-trustees of the Trust, it did not analyze whether Indiana could exercise jurisdiction over
Tamra, who is not a trustee.
Beneficiaries argue that the district court erred in granting dismissal under section 15-7-
203 because Tamra is a necessary party, yet no evidence supports that Indiana could exercise
personal jurisdiction over her. Beneficiaries contend that Tamra is a necessary party because the
Trust conveyed Doris’ home to Neil and Tamra as husband and wife and Beneficiaries seek
rescission of that sale. Trustees argue that Beneficiaries’ argument is moot because Trustees
conceded that Indiana can exercise jurisdiction over all parties.
A person “is a necessary party to . . . [a] claim[] for rescission . . . where her interest in
community property may be affected.” Moon v. Brewer, 89 Idaho 59, 64, 402 P.2d 973, 976
(1965). Because Beneficiaries sued for rescission of the sale of Doris’s home to Neil and Tamra
(among other relief), and Tamra has a community property interest in the home that would be
affected by an order granting rescission of the sale, Tamra is a necessary party to the action
under Moon. As a necessary party, it follows that Tamra is also an “appropriate part[y]” under
section 15-7-203. Therefore, the district court was required to find Tamra could be bound by
litigation in Indiana before dismissing Beneficiaries’ complaint. However, the district court made
no such finding, and we hold that it could not have done so based on the facts in the record.
At the outset, Trustees’ contention they mooted the issue by conceding Indiana could
exercise jurisdiction is belied by the record. There is no such concession anywhere in the record.
And even if there were, it would be meaningless. Personal jurisdiction is created by a person’s
conduct within or directed at a forum state. See Int’l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945) (requiring minimum contacts with the forum state to establish personal jurisdiction).
Nothing in the record suggests that Tamra had any contacts with Indiana. Moreover, no facts
suggested that Tamra had or would have voluntarily submitted to Indiana’s jurisdiction. To the
contrary, Trustees rebuffed a request from Beneficiaries that Tamra agree to do so, and counsel
for Trustees told the district court it would be “akin to malpractice” to recommend that Tamra
accept Beneficiaries’ “outrageous” request. Trustees failed to carry their burden to establish that
section 15-7-203 applied; therefore, the district court erred in granting dismissal under that
statute.
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IV. CONCLUSION
For the reasons above, the decision of the district court granting Trustees’ motion to
dismiss is reversed and the case is remanded for further proceedings. Pursuant to Idaho Appellate
Rule 40, we award costs on appeal to Beneficiaries.
Chief Justice BEVAN, and Justices STEGNER, MOELLER and ZAHN CONCUR.
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