In Re Ralph a Siddell Living Trust

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
In re RALPH A. SIDDELL LIVING TRUST.
DAVID HEILMAN, Trustee of the RALPH A. UNPUBLISHED
SIDDELL LIVING TRUST, and WOUNDED May 11, 2023
WARRIOR PROJECT,
Appellees,
v No. 359979
Allegan Probate Court
KIRK A. SIDDELL, LC No. 21-062791-TV
Appellant.
In re RALPH A. SIDDELL LIVING TRUST.
DAVID R. HEILMAN, Trustee of the RALPH A.
SIDDELL LIVING TRUST, and WOUNDED
WARRIOR PROJECT,
Appellees,
v No. 359991
Allegan Probate Court
LINDA K. SMITH, LC No. 21-062888-TV
Appellant.
LINDA K. SMITH,
Plaintiff-Appellant,
v No. 362535
-1-
Allegan Probate Court
DAVID HEILMAN, Trustee of the RALPH A. LC No. 20-062158-CZ
SIDDELL LIVING TRUST and Trustee of the
WILLIAM H. JOHNSON, JR., LIVING TRUST,
Defendant-Appellee.
Before: MARKEY, P.J., and MURRAY and FEENEY, JJ.
PER CURIAM.
These consolidated appeals arise from the administration of individual trusts created by
William (Bill) H. Johnson and his spouse, Ralph A. Siddell. In Docket No. 362535, Linda K.
Smith, Bill’s sister, appeals the probate court’s order issued after a bench trial. In addition to
challenging several of the court’s findings and rulings after the trial, Smith challenges the court’s
earlier orders dismissing her claims against David Heilman for conversion and denying her motion
for leave to amend her complaint. In Docket No. 359991, Smith appeals the probate court’s order
denying her petition for declaratory relief and to invalidate the 2017 amendment to the Ralph A.
Siddell Living Trust. In Docket No. 359979, Kirk Siddell, Ralph’s son, appeals the probate court’s
order granting summary disposition of the petition to determine the validity of the Ralph A. Siddell
Living Trust in favor of Heilman. Finding no error requiring reversal, we affirm the probate court’s
orders.
I. RELEVANT FACTS AND PROCEEDINGS
In 1998 Bill and Ralph each created a trust, and in 2012, each amended and restated his
trust agreement. Each assigned to his trust “all of [his] interest in” “[a]ll tangible and intangible
personal property of any kind or nature whatsoever and wherever located.” Article Three of each
trust addressed the distribution of the trust property. Pertinent to these appeals, Smith was to
receive $100,000 under each trust, and the survivor received the decedent’s pets, along with
$25,000 for a pet trust. If the decedent did not have any animals at the time of his death, that gift
would lapse and be added to the remainder. The remaining assets, including all tangible personal
property, were to be held in trust for the survivor’s benefit. The trustee was given the “discretion
to distribute income and/or principal” for the survivor’s “health, support and maintenance” if the
trustee determined that the income and other property available to the survivor was insufficient to
provide for his maintenance. After the survivor’s death, three named friends were to have the
opportunity to select any item from the household furnishings or outdoor items, and one of them
also received a large bronze deer that stood in the front yard of Bill and Ralph’s residence. All
remaining tangible personal property was to be distributed to Smith. The remaining financial
assets were to be evenly divided between the All Saints Episcopal Church Endowment Fund, under
certain conditions, and Smith. Bill and Ralph were co-trustees of each other’s trust, with the
survivor being named successor trustee. Both trusts were revocable.
Bill died suddenly in 2016. At the time of his death, Bill had $371,476.94 in assets in trust
accounts with Edward Jones. Ralph began serving as the sole trustee of Bill’s trust in accordance
with the terms of the trust. In February 2017, the probate court appointed Heilman as co-trustee
-2-
of Bill’s trust. According to the petition, Ralph, who was 86 years old at the time, did not wish to
resign as trustee but wanted help with administering Bill’s trust. The following month, Ralph
restated and amended his trust agreement (the 2017 Siddell Trust), substantially changing Smith’s
distribution. Under the 2017 Siddell Trust, upon Ralph’s death, the three friends were to have the
opportunity to select any items of tangible personal property from Bill’s and Ralph’s residence.
After the three men selected everything they wanted, Smith could choose 10 items from the
remaining personal property. Any items remaining after that were to be sold by the trustee. The
trustee was to create a pet trust in accordance with Ralph’s instructions and give $50,000 to Kirk
and a total of $12,000 to five specified charities. The remainder of the trust principal was to be
given to All Saints Episcopal Church Endowment Fund (50%), Christian Neighbors (25%), and
Wounded Warriors Project (25%). Smith had no share of the remainder.
Ralph died in August 2019, and the trustee notified the beneficiaries of the existence of
Ralph’s trust and of their interests therein. On January 6, 2020, Smith presented Heilman with a
statement and proof of claim in the amount of $500,000, alleging that assets transferred to Bill’s
trust had been mismanaged, thereby depriving her of tangible personal property. Heilman denied
the claim. Four days later, Smith filed a civil action against Heilman, in his capacity as trustee of
Bill’s trust and the Siddell Trust, alleging breaches of fiduciary duties regarding Bill’s trust’s
tangible personal property and financial assets, common-law conversion, statutory conversion
under MCL 600.2919a, and sought treble damages under MCL 700.7813(4).
After the close of discovery in the civil case, Heilman moved for partial summary
disposition of Smith’s complaint. Heilman argued that Smith’s claims for conversion failed
because Bill and Ralph owned the tangible personal property jointly, with rights of survivorship,
and, therefore, the property passed to Ralph’s sole ownership after Bill’s death. In addition, even
if Smith had an ownership interest in the personal property, she had no right of immediate
possession of any of the property during Ralph’s lifetime, and the dispute about the ownership of
the property that arose after Ralph’s death justified Heilman’s not distributing the property until
the dispute was resolved. Further, Smith could not show that she suffered any damages because
all the tangible personal property was currently stored in Bill and Ralph’s marital home, awaiting
distribution. Smith did not respond to Heilman’s motion.
After an attempt at mediation failed, Heilman petitioned the probate court to determine the
validity of the 2017 Siddell Trust and then moved for summary disposition on his petition.
Heilman argued that the beneficiaries of the 2017 Siddell Trust had received notice that complied
with MCL 700.7604(1)(b), which meant that anyone who wanted to challenge the validity of the
2017 Siddell Trust had six months to do so. No one had petitioned to set aside the trust during the
limitations period, and now all such challenges were time-barred.
While Heilman’s motions for summary disposition on Smith’s conversion claims and on
his petition for validation were pending, Smith moved for leave to amend her complaint to add a
challenge to the validity of the 2017 Siddell Trust. Smith asserted that Ralph lacked the capacity
to execute the trust and that the trust resulted from the “misrepresentation, coercion, deceit, and
undue influence” exerted by Heilman and others. Before the probate court ruled on Smith’s
motion, she petitioned for declaratory relief and to set aside the 2017 Siddell Trust. Smith
contended that the notice she received after Ralph’s death did not comply with MCL 700.7604
because it did not include the relevant portion of the Ralph’s 2012 trust (2012 Siddell Trust) that
-3-
would have shown that the 2017 Siddell Trust disinherited her and because the notice did not
clearly inform her that if she did not challenge the validity of the 2017 Siddell Trust during the
six-month limitations period, she would be forever barred from doing so.
After a period of additional briefing, the probate court granted Heilman’s motion for
summary disposition of his petition to validate the 2017 Siddell Trust. The probate court
determined that Kirk did not have standing to challenge the validity of the 2017 Siddell Trust
because he did not experience any property loss under the trust. Instead, he received a beneficial
increase of $15,000. The court found that Smith was the real party in interest for purposes of
challenging the trust because the trust significantly affected her interests. The probate court further
concluded that neither Smith’s nor Kirk’s claims survived the six-month limitations period
provided by MCL 700.7604(1)(b), as the trustee’s notices to Kirk and Smith complied with MCL
700.7604(1)(b). For the same reason, the probate court denied Smith’s petition for declaratory
relief. As to Ralph’s alleged incapacity, the court concluded that the 2017 Siddell Trust was
revocable while Ralph was alive and that Ralph was never deemed incapacitated in any of the
ways provided for in the trust: he was never pronounced incapacitated by a court, and he was not
declared incapacitated by a physician who had examined him within the last three months.
The probate court also granted partial summary disposition of Smith’s complaint in favor
of Heilman. As to common-law conversion, the court found that Smith had not shown that she
had a property right in, or a right to immediate possession of, the personal property being held by
Heilman. The probate court further determined that because there was no indication that the
tangible personal property was not still located within Bill and Ralph’s common home and ready
for distribution upon settlement of the 2017 Siddell Trust, Smith had not suffered any actual
damages. Smith’s claim for common-law and statutory conversion therefore failed. Lastly, the
probate court denied Smith’s motion for leave to amend her complaint, explaining that a petition
to set aside a trust must be filed as a new matter and could not arise out of an amendment to a civil
action.
After a bench trial on Smith’s claims for breach of fiduciary duty, the probate court agreed
that the trustees of Bill’s trust had breached their fiduciary duties and ordered the return of
$120,000 to Bill’s trust. The probate court also ordered Heilman to sell the tangible personal
property and to split the proceeds equally between Bill’s trust and Ralph’s trust. Kirk and Smith
appealed the court’s orders, and their appeals were consolidated.1
II. ANALYSIS
A. DOCKET NO. 359979
As an initial matter, Heilman urges this Court to dismiss Kirk’s appeal for lack of appellate
standing.
1
In re Ralph A Siddell Living Trust, unpublished order of the Court of Appeals, entered December
8, 2022 (Docket Nos. 359979, 359991, and 362535).
-4-
Whether a party has standing is a question of law that this Court reviews de novo. Newman
v Real Time Resolutions, Inc, ___ Mich App ___, ___; ___ NW2d ___ (2022) (Docket
No. 357279); slip op at 3. To have appellate standing, a person must be an “aggrieved party.”
MCR 7.203(A); Federated Ins Co v Oakland Co Rd Comm, 475 Mich 286, 291; 715 NW2d 846(2006).
This requirement stems from the fact that this Court’s judicial power, established
by Const 1963, art 6, § 1, extends only to a genuine case or controversy between
the parties, one in which there is a real, not a hypothetical, dispute, and one in which
the plaintiff has suffered a particularized or personal injury. [Manuel v Gill, 481
Mich 637, 643; 753 NW2d 48 (2008) (quotation marks and citation omitted).]
“To be aggrieved, one must have some interest of a pecuniary nature in the outcome of the case,
and not a mere possibility arising from some unknown and future contingency.” Id. (quotation
marks and citation omitted). Further,
to have standing on appeal, a litigant must have suffered a concrete and
particularized injury, as would a party plaintiff initially invoking the court’s power.
The only difference is a litigant on appeal must demonstrate an injury arising from
either the actions of the trial court or the appellate court judgment rather than an
injury arising from the underlying facts of the case. [Federated Ins Co, 475 Mich
at 291-292.]
Kirk has not identified any “concrete or particularized injury” that he suffered from the probate
court’s conclusion that Kirk was time-barred from challenging the 2017 Siddell Trust, nor has he
shown how he would benefit if this Court reversed the probate court’s decision.
Kirk received $50,000 under the 2017 Siddell Trust. Had the probate court invalidated that
trust and reinstated the 2012 Siddell Trust, Kirk would have received $35,000 and had a contingent
interest in 25% of the gift designated for the All Saints Episcopal Church Endowment Fund if that
gift lapsed on the basis that the church was no longer active or had merged with another church or
organization. The 2017 Siddell Trust made a gift to the church’s Endowment Fund with similar
conditions attached. The record shows that an attorney appeared on behalf of the church’s
Endowment Fund in Docket No. 362535, and that Kirk and Smith served their claims of appeal on
the Endowment Fund. These facts tend toward the conclusion that the church is active,
independent, and able to receive the designated distribution. Accordingly, Kirk would not benefit
from the invalidation of the 2017 Siddell Trust and reinstatement of the 2012 Siddell Trust. “A
party who could not benefit from a change in the judgment has no appealable interest.” Ford
Motor Co v Jackson, 399 Mich 213, 226; 249 NW2d 29 (1976) (quotation marks and citation
omitted).
Because Kirk failed to identify a particularized or concrete injury from the probate court’s
action or how it would improve his position if this Court granted the requested relief, we dismiss
his appeal for lack of jurisdiction. See Manuel, 481 Mich at 643.
-5-
B. DOCKET NO. 359991
1. SUFFICIENCY OF NOTIFICATION
Turning to Smith’s challenges to the probate court orders, Smith first argues that the court
erred by denying her petition for declaratory relief and to set aside the 2017 Siddell Trust on the
basis that the trustee’s notification met the requirements of MCL 700.7604.
This Court reviews de novo whether a probate court properly interpreted and applied the
relevant statutes. In re Estate of Carlsen, 339 Mich App 483, 489; 984 NW2d 788 (2021). This
Court reviews the probate court’s dispositional rulings for an abuse of discretion. In re Lundy
Estate, 291 Mich App 347, 352; 804 NW2d 773 (2011). An abuse of discretion occurs when the
probate court’s decision is outside the range of principled outcomes. See In re Kostin, 278 Mich
App 47, 51; 748 NW2d 583 (2008).
MCL 700.7604 provides in relevant part:
(1) A person may commence a judicial proceeding to contest the validity of
a trust that was revocable at the settlor’s death within the earlier of the following:
(a) Two years after the settlor’s death.
(b) Six months after the trustee sent the person a notice informing the person
of all of the following:
(i) The trust’s existence.
(ii) The date of the trust instrument.
(iii) The date of any amendments known to the trustee.
(iv) A copy of relevant portions of the terms of the trust that describe or
affect the person’s interest in the trust, if any.
(v) The settlor’s name.
(vi) The trustee’s name and address.
(vii) The time allowed for commencing a proceeding.
Smith argues that because the notice she received regarding her interest in the 2017 Siddell
Trust lacked information material to her ability to protect her interest under the 2012 Siddell Trust,
the notice did not fulfill the requirements of MCL 700.7604(1)(b)(iv) and therefore did not trigger
the six-month period limitations period. Smith’s argument fails because the 2012 Siddell Trust
was not relevant to her interest under the 2017 Siddell Trust.
MCL 700.7604(1)(b)(iv) requires the trustee to send only the “relevant portions” of the
terms of a trust that describe or affect the beneficiary’s interest in the trust. The 2012 Siddell Trust
-6-
specifically allowed Ralph to amend or revoke the trust at any time. The trust stated that it was
intended to be revocable and would be irrevocable when Ralph died or was declared incapacitated
in the manner described in the trust. If a trust is in writing, it may be revoked or amended with a
writing that clearly manifests the settlor’s intent to do so. MCL 700.7602(3)(b)(i). The
2017 Siddell Trust clearly manifested Ralph’s intent to amend the 2012 Siddell Trust, and he
believed that the extensive amendments he wanted to make to his trust would be “better
understood” if he restated his entire trust. To that end, Ralph replaced the 2012 Siddell Trust with
the 2017 Siddell Trust, which set forth the terms of the distribution of Ralph’s property going
forward. Having been replaced by the 2017 Siddell Trust, the 2012 version of Ralph’s trust was
no longer relevant to the distribution of Ralph’s property. The trustee’s notice under MCL
700.7604(1)(b) was not insufficient because it lacked portions of the 2012 Siddell Trust.2
We also reject Smith’s argument that the notice was inadequate because it did not plainly
advise her that challenges to the validity of the 2017 Siddell Trust would be time-barred if not
raised within six months of the date of the notice. MCL 700.7604(1)(b)(vii) requires the trustee’s
notice to include “[t]he time allowed for commencing a proceeding.” The notice provided to Smith
stated, “If you wish to commence a judicial proceeding to contest the validity of the Trust, you
must do so prior to six months from the date of the mailing of this letter.” “Must” is commonly
understood to mean to “be commanded or requested to”; in a legal context, “must” means to be
“required by law, custom, or moral conscience.” Merriam-Webster’s Collegiate Dictionary (11th
ed). The notice sent to Smith clearly advised her that if she wanted to contest the validity of the
2017 Siddell Trust in a judicial proceeding, the law required her to do so within six months from
the date of the letter, October 24, 2019. MCL 700.7604 requires trustees to provide notice
informing recipients that they may challenge the validity of a trust and the period allowed for
bringing such a challenge. Nothing in the statute requires a trustee to inform the recipients of the
specific legal consequences of not acting during the time allowed.
In re Pollack Trust, 309 Mich App 125, 136; 867 NW2d 884 (2015), does not alter our
conclusion, as the relevant question in that case was whether the limitations period in
MCL 700.7604 applied because the Michigan Trust Code (MTC), of which the statute is a part,
became effective after the plaintiff acquired his right to challenge the validity of the trust. Id.
at 136-137. This Court did not address the language of the notification, let alone hold that it had
2
This interpretation of MCL 700.7604(1)(b)(iv) is supported by consideration of the purpose of the
Michigan Trust Code (MTC), MCL 700.7101 et seq. MCL 700.8201(1) requires the MTC to be
construed and applied to promote its underlying purposes and policies. Among those purposes
and policies are “[t]o make more comprehensive and to clarify the law governing trusts in this
state” and to “foster certainty in the law so that settlors of trusts will have confidence that their
instructions will be carried out as expressed in the terms of the trust.” MCL 700.8201(2)(b) and
(c). Including irrelevant terms from superseded documents in the notice required by § 7604
arguably would muddy the law governing trusts and unsettle settlors with the possibility that a
beneficiary unhappy with the settlor’s instructions would commence trust-depleting litigation to
obtain the distribution reflected in a superseded document.
-7-
to include information about the legal consequences of not challenging the validity of a trust within
the limitations period.
2. MOTION FOR LEAVE TO AMEND
Smith next argues that the probate court erred by denying her motion for leave to amend
her complaint. We review a probate court’s decision on a motion for leave to amend a complaint
for an abuse of discretion. See In re Kostin, 278 Mich App at 51.
A party who wishes to amend a pleading outside the period provided in MCR 2.118(A)(1)
can only amend her pleading by leave of the court or by written consent of the opposing party,
MCR 2.118(A)(2). Leave to amend “shall be freely given when justice so requires.”
MCR 2.118(A)(2). “An amendment that adds a claim or a defense relates back to the date of the
original pleading if the claim or defense asserted in the amended pleading arose out of the conduct,
transaction, or occurrence set forth, or attempted to be set forth, in the original pleading.” MCR
2.118(D); see also Doyle v Hutzel Hosp, 241 Mich App 206, 212-213; 615 NW2d 759 (2000)
(stating that an “amended pleading can introduce new facts, new theories, or even a different cause
of action as long as the amendment arises from the same transactional setting that was set forth in
the original pleading”). “The doctrine of ‘relation back’ was devised by the courts to associate the
amended matter with the date of the original pleading, so that it would not be barred by the statute
of limitations.” LaBar v Cooper, 376 Mich 401, 405; 137 NW2d 136 (1965). “[T]he relation-
back doctrine does not extend to the addition of new parties.” Miller v Chapman Contracting, 477
Mich 102, 105; 730 NW2d 462 (2007) (quotation marks and citation omitted).
Proceedings in the probate court are governed by the general rules of civil procedure found
in MCR 2.001 through MCR 2.630, except when modified by the rules governing procedure in
probate courts, found in Chapter 5 of the Michigan Court Rules. MCR 5.101(A) provides that
there are two forms of action in the court: a “proceeding” and a “civil action.” See also In re
Brown, 229 Mich App 496, 501; 582 NW2d 530 (1998) (indicating that “the specialized court
rules pertaining to the probate court recognize a petition-initiated proceeding as a proper form of
action”). An action filed by a claimant after notice that her claim has been disallowed “must be
titled civil actions and commenced by filing a complaint and are governed by the rules applicable
to civil actions in circuit court.” MCR 5.101(C)(2). However, a proceeding concerning a trust is
commenced by filing a petition in court. MCR 5.501(C). MCL 700.7208 likewise instructs that a
proceeding in the probate court brought by a beneficiary that concerns the validity of a trust “is
initiated by filing a petition . . . .”
Although Smith correctly initiated a civil action against Heilman by filing a complaint, see
MCR 5.101(C)(2), she did not commence a new proceeding to invalidate the 2017 Siddell Trust
by filing a petition, as required under MCL 700.7208 and MCR 5.501(C). Smith cites no authority
allowing the amendment of a complaint with a cause of action that should have been filed in a
petition. Her reliance on the definition of “proceeding” in MCL 700.1106(t) to argue that the
probate court’s distinction between a civil action and a proceeding was a distinction without a
substantive difference is unavailing, given the clear instruction in MCL 700.7208 and
MCR 5.501(C) that a proceeding concerning a trust is initiated by a petition.
-8-
In any event, even if the probate court erred by denying Smith’s motion for leave to amend,
the court’s error did not affect the outcome of the proceeding. See MCR 2.613(A); Matter of
Moriconi, 337 Mich App 515, 522; 977 NW2d 583 (2021). The amended pleading would not have
allowed Smith to avoid the consequences of MCL 700.7604’s limitations period by relating back
to the date that she filed her original complaint because the amendment did not arise out of the
“conduct, transaction, or occurrence set forth, or attempted to be set forth, in the original pleading.”
MCR 2.118(D).
The transactional setting for Smith’s original complaint was Heilman’s denial of her claim
against Ralph’s estate, the alleged mismanagement of Bill’s financial assets, and the alleged
mismanagement of tangible personal property that Smith believed belonged wholly and solely to
Bill’s trust. By contrast, the transactional setting for Count I of Smith’s proposed amended
pleading involved the creation of the 2017 Siddell Trust and inferences drawn from Heilman’s and
others’ interactions with Ralph, which Smith believed constituted “misrepresentation, coercion,
deceit, and undue influence.” Although Smith made no mention of Ralph’s capacity when she
alleged the mismanagement of Bill’s trust, she alleged in her proposed amended pleading that
Ralph lacked capacity and that Heilman and George Stoutin took advantage of Ralph’s age, frailty,
grief, and cognitive decline to overpower his freewill. Because Smith’s proposed amendment did
not arise out of the same conduct as did her allegations of breach of fiduciary duties with regard
to the management of Bill’s trust, the relation-back doctrine would not have applied and, therefore,
even if the probate court had granted her motion for leave to amend, Smith’s count for the
invalidation of the 2017 Siddell Trust would have been time-barred.
The probate court did not abuse its discretion by rejecting Smith’s motion for leave to
amend. See In re Kostin, 278 Mich App at 51.
C. DOCKET NO. 362535
1. PARTIAL SUMMARY DISPOSITION
Smith contends that the probate court erred by granting partial summary disposition of her
complaint in favor of Heilman. This Court reviews de novo a probate court’s decision on a motion
for summary disposition. See In re Leete Estate, 290 Mich App 647, 659; 803 NW2d 889 (2010).
The probate court granted summary disposition under MCR 2.116(C)(10). A motion under
MCR 2.116(C)(10) tests the factual sufficiency of the complaint. Joseph v Auto Club Ins Ass’n,
491 Mich 200, 206; 815 NW2d 412 (2012). A trial court evaluating a motion for summary
disposition under subrule (C)(10) “considers affidavits, pleadings, depositions, admissions, and
other evidence submitted by the parties . . . in the light most favorable to the party opposing the
motion.” Maiden v Rozwood, 461 Mich 109, 120; 597 NW2d 817 (1999). Summary disposition
is appropriate when, “[e]xcept as to the amount of damages, there is no genuine issue as to any
material fact, and the moving party is entitled to judgment or partial judgment as a matter of law.”
MCR 2.116(C)(10).
To establish a claim for common-law conversion, a plaintiff must show (1) an ownership
interest, absolute or qualified, in identifiable personal property, see Hance v Tittabawassee Boom
Co, 70 Mich 227, 231; 38 NW 228 (1888); (2) that he or she had the right to immediate possession
-9-
of the property, see Thomas v Watt, 104 Mich 201, 207; 62 NW 345 (1895); (3) that the defendant
wrongfully exerted dominion over the property inconsistent with the plaintiff’s rights, Aroma
Wines & Equip, Inc v Columbian Distribution Servs, Inc, 497 Mich 337, 351-352; 871 NW2d 136(2015), and (4) actual damages. Proof of conversion is necessary to establish claims of statutory
conversion under MCL 600.2919a and MCL 700.7813.
Viewing the evidence in the light most favorable to Smith, she did not identify any tangible
personal property that Bill owned individually and to which she had a right, nor did she establish
that she ever had a right of immediate possession of any of the tangible personal property. Bill’s
trust was very clear that the tangible personal property was to be held in trust for Ralph’s benefit
until Ralph died. Because Bill’s trust instructed Ralph, as successor trustee of Bill’s trust, to hold
the tangible personal property in trust for his benefit, Smith did not have the right of immediate
possession of the property after Bill died. After Ralph died, a dispute arose over ownership of the
property and the validity of the 2017 Siddell Trust, and these disputes delayed the distribution of
property. In light of Heilman’s general duty to administer the trust in accordance with its terms
and purposes, MCL 700.7801, Heilman’s waiting to distribute the trust property until the
ownership dispute was resolved could hardly constitute an unauthorized exercise of dominion or
control over the property.3 The probate court did not err by granting summary disposition on
Smith’s claim for common-law conversion in favor of Heilman.
Nor did the probate court err by granting summary disposition of Smith’s statutory
conversion claims. To establish statutory conversion under MCL 600.2919a, a plaintiff must
satisfy the elements of a common-law conversion claim, as well as show that the defendant actually
knew that the property was converted. See Echelon Homes, LLC v Carter Lumber Co, 472 Mich
192, 197; 694 NW2d 544 (2005). Because Smith cannot establish common-law conversion, she
cannot establish statutory conversion under MCL 600.2919a or MCL 700.7813(4). Accordingly,
the trial court did not err by granting summary disposition of her statutory conversion claim in
favor of Heilman.
2. ORDER AFTER TRIAL
Lastly, Smith contends that the probate court erred by ruling after trial that the deductions
from Bill’s trust for Ralph were properly characterized as health, maintenance, and support
payments. She also argues that the probate court erred by ordering Heilman to sell the tangible
personal property and split the proceeds between Bill’s trust and Ralph’s trust.
3
As to damages, Smith asserts that all the personal property assigned by Bill to his trust is gone
from the trust. It is true that Heilman maintained that Bill’s trust did not contain any tangible
personal property, and the probate court suggested that Bill’s trust assign all of Bill’s tangible
personal property to Ralph. However, Heilman attested that all the tangible personal property was
accounted for and in storage, ready to be distributed upon resolution of the ownership dispute. The
property was available to be distributed to Smith had the probate court determined that she was
the rightful owner and had an immediate right to possess any identifiable property. Given that the
tangible personal property at issue remained in the possession of the trustee, awaiting distribution
to the rightful owner, Smith failed to show what actual damages she suffered.
-10-
Although Bill’s trust became irrevocable upon Bill’s death, it came to light after Ralph’s
death that, while acting as trustee of Bill’s trust, Ralph frequently comingled his money with the
money in Bill’s Edward Jones accounts. Ralph paid for expenses such as utilities, healthcare, and
online shopping and made charitable contributions using money from Bill’s Edward Jones
accounts. But as indicated, Bill’s trust allowed Ralph “discretion to distribute income and/or
principal” for the survivor’s “health, support and maintenance” if the trustee determined that the
income and other property available to the survivor was insufficient to provide for his maintenance.
Smith challenged whether utilities, online shopping, and other such expenses fell under health,
maintenance, or support, and whether there had been any proper determination that Ralph’s income
and property were insufficient to provide for his maintenance before funds from Bill’s trust were
used.
Smith argues primarily that the money Ralph spent from Bill’s trust on shopping because
it made him feel good did not fall into the categories of health, support, or maintenance. Black’s
Law Dictionary (11th ed) defines “health” as: “1. The quality, state, or condition of being sound
or whole in body, mind, or soul; esp., freedom from pain or sickness. 2. The relative quality, state,
or condition of one’s physical or mental well-being, whether good or bad.” Similarly, Merriam-
Webster’s Collegiate Dictionary (11th ed) defines “health” as “the condition of being sound in
body, mind, or spirit; esp: freedom from physical disease or pain” or “the general condition of the
body.” “Support” and “maintenance” are synonyms and imply a level of intended support in
keeping with the “accustomed standard of living or station in life” that the beneficiary enjoyed at
the time of the settlor’s death. Restatement Trusts, 3d, § 50, comment d(2). Support and
maintenance provisions “do not normally encompass payments that are unrelated to support but
merely contribute in other ways to a beneficiary’s contentment or happiness.” Id.
The probate court considered that Michigan allowed broad discretion in the application of
a maintenance provision, the length of the couple’s relationship, Bill’s desire to provide for
Ralph’s medical needs and happiness, and evidence indicating that Ralph’s life after Bill’s death
was similar to his life with Bill, and concluded that Ralph did not abuse his discretion by using
Bill’s trust funds to pay for healthcare expenses, utilities, credit cards, insurance, other debts, and
online purchases. The record supports the probate court’s conclusion.
Although shopping did make Ralph feel good, the record suggests that shopping and
collecting were part of Ralph’s usual manner of living. Heilman affirmed that Ralph was a
“prolific shopper,” and testified that Bill said that Ralph was the reason that they began collecting
and had “all their stuff.” Heilman said that Bill wanted Ralph to be financially able to stay in the
house as long as possible, but that he should be “left to his shopping.” This record evidence
supports the probate court’s observation that Ralph’s “expenses would not have been a surprise to
Bill do [sic, due] to the circumstances and habits of the parties. The testimony showed that Ralph’s
life, while his health was failing, was similar to his life with Bill.” The court found that “Bill
unquestionably wanted to provide for Ralph’s medical needs and happiness” and that, for this
reason, Ralph’s use of Bill’s trust funds to pay for utilities, credit cards, insurance, other debts, and
online purchases was not shown to be an abuse of discretion. Under these facts, we cannot
conclude that the probate court’s factual findings were clearly erroneous or that its decision was
an abuse of discretion.
-11-
However, the probate court agreed with Smith that the trustees “committed breaches of
fiduciary duties regarding the financial assets/residue” of Bill’s trust. Consequently, the probate
court ordered the return of $120,000 to Bill’s trust, as well as half the proceeds from the sale of
the tangible personal property at issue. Smith asserts that the probate court erred by determining
that she was entitled to 50% of the proceeds from the sale of the tangible personal property rather
than all the actual personal property. And even if she was entitled to only half of the property, she
should receive the actual property rather than proceeds from the property’s sale. In arriving at the
decision to sell the property and split the proceeds, the probate court found
no easy way to assist in determining Bill’s personal property at the creation of the
Trust. The couple desired to share equally, but did not take steps to separate the
items or clean up the Trust. There were no bills of sale or joint ownerships created,
other than the house and the automobiles.
The probate court’s factual findings are supported by the record and are not clearly erroneous and,
under the circumstances presented, it cannot be said that the probate court’s decision to order the
property sold and the proceeds evenly split between Bill’s trust and Ralph’s trust fell outside the
range of reasonable outcomes.4
Affirmed.
/s/ Jane E. Markey
/s/ Christopher M. Murray
/s/ Kathleen A. Feeney
4
Heilman urges this Court to reconsider the probate court’s damages award, asserting that Ralph
did not transfer $120,000 from Bill’s trust to himself. “In the absence of a cross appeal, errors
claimed to be prejudicial to appellee ordinarily cannot be considered, nor can affirmative relief to
appellee be granted.” See McCardel v Smolen, 404 Mich 89, 95 n 6 (1978) (quotation marks and
citation omitted). Because Heilman did not file a cross-appeal, he cannot obtain a more favorable
decision from this Court.
-12-