In re Margaret L. Matthews Revocable Trust

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
09/23/2022 12:06 AM CDT
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
IN RE MARGARET L. MATTHEWS REVOCABLE TRUST
Cite as 312 Neb. 381In re Margaret L. Matthews Revocable Trust.
Wells Fargo Bank, N.A., as Trustee of the Margaret L.
Matthews Revocable Trust, appellee, v. Salvation
Army and Visiting Nurse Association of the
Midlands, doing business as Visiting Nurse
Association, appellees, and Nebraska Synod
of the Evangelical Lutheran Church in
America, substituted for Pella Evangelical
Lutheran Church, appellant.
___ N.W.2d ___
Filed September 9, 2022. No. S-21-507.
1. Trusts: Equity: Appeal and Error. Absent an equity question, an
appellate court reviews trust administration matters for error appear-
ing on the record; but where an equity question is presented, appellate
review of that issue is de novo on the record.
2. Declaratory Judgments. Whether an action for declaratory judgment is
to be treated as one at law or one in equity is to be determined by the
nature of the dispute. The test is whether, in the absence of the prayer
for declaratory judgment, the issues presented should properly be dis-
posed of in an equitable action, as opposed to a legal action.
3. Evidence: Appeal and Error. In a review de novo on the record, an
appellate court reappraises the evidence as presented by the record and
reaches its own independent conclusions concerning the matters at issue.
However, the court may give weight to the fact that the trial court heard
and observed the witnesses and their manner of testifying, and accepted
one version of the facts rather than the other.
4. Jurisdiction: Appeal and Error. Before reaching the legal issues pre-
sented for review, it is an appellate court’s duty to determine whether it
has jurisdiction to decide the issues presented.
5. ____: ____. Where a lower court lacks subject matter jurisdiction to
adjudicate the merits of a claim, issue, or question, an appellate court
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IN RE MARGARET L. MATTHEWS REVOCABLE TRUST
Cite as 312 Neb. 381also lacks the power to determine the merits of the claim, issue, or ques-
tion presented to the lower court.
6. Trusts: Declaratory Judgments. Nebraska’s declaratory judgment stat-
utes allow trustees and persons interested in the administration of a trust
to seek a declaration regarding any question arising in the administration
of a trust.
7. Trusts. A trustee or beneficiary may apply to an appropriate court for
instructions regarding the administration or distribution of the trust if
there is reasonable doubt about the powers or duties of the trusteeship
or about the proper interpretation of the trust provisions.
8. Jurisdiction: Final Orders: Appeal and Error. For an appellate court
to acquire jurisdiction of an appeal, there must be a final judgment or
final order entered by the tribunal from which the appeal is taken.
9. Final Orders: Words and Phrases. To be final, an order must dispose
of the whole merits of the case. When no further action of the court is
required to dispose of a pending cause, the order is final.
10. Declaratory Judgments: Parties. When declaratory relief is sought,
it is a statutory requirement that all persons shall be made parties who
have or claim any interest which would be affected by the declaration,
and no declaration shall prejudice the rights of persons not parties to
the proceeding.
11. Trusts: Courts: Jurisdiction. The act of registering a trust gives the
county court jurisdiction over the interests of all notified beneficiaries to
decide issues related to any matter involving the trust’s administration,
including a request for instructions or an action to declare rights.
12. Trusts: Words and Phrases. The term “beneficiary” includes per-
sons with a present or future beneficial interest in a trust, vested or
contingent.
13. Trusts: Intent. The primary rule of construction for trusts is that a court
must, if possible, ascertain the intention of the testator or creator.
14. Corporations: Charities. A gift, donation, or bequest by name, without
further restriction or limitation as to use, to a corporation organized and
conducted solely for charitable purposes, will be deemed to have been
made for the objects and purposes for which the corporation was orga-
nized, and not to the corporation itself.
15. Charities: Intent. The charitable intent of the donor is ascertained by
reference to the charitable purposes of the donee.
Appeal from the County Court for Douglas County: Derek
R. Vaughn, Judge. Affirmed.
William J. Lindsay, Jr., and Zachary W. Lutz-Priefert, of
Gross & Welch, P.C., L.L.O., for appellant.
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Nebraska Supreme Court Advance Sheets
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IN RE MARGARET L. MATTHEWS REVOCABLE TRUST
Cite as 312 Neb. 381Krista M. Eckhoff, Jesse D. Sitz, and Brian Barmettler, of
Baird Holm, L.L.P., for the Salvation Army and the Visiting
Nurse Association of the Midlands.
Heavican, C.J., Cassel, Stacy, Funke, Papik, and
Freudenberg, JJ., and Stecker, D.J.
Heavican, C.J.
The late Margaret L. Matthews established and amended
a revocable trust prior to her death wherein she made three
bequests: one each to the Salvation Army and the Visiting Nurse
Association of the Midlands, doing business as Visiting Nurse
Association (VNA), appellees, and one to Pella Evangelical
Lutheran Church (Pella). As amended, each bequest encom-
passed the named beneficiary, as well as its charitable succes-
sors and assigns. Prior to Matthews’ death, Pella had ceased
to exist. Wells Fargo Bank, N.A. (Wells Fargo), as trustee of
the trust, filed a petition for declaratory judgment concern-
ing Pella’s existence. The Nebraska Synod (Synod) of the
Evangelical Lutheran Church in America (ELCA), appellant,
a conglomerate of churches to which Pella belonged prior to
cessation, was allowed to intervene and asserted that it was
entitled to Pella’s share of the trust property.
After trial, the Douglas County Court determined that the
Synod was not Pella’s charitable successor and assign, and it
ordered that Pella’s share be distributed pro rata to the Salvation
Army and the VNA, the remaining named beneficiaries, pursu-
ant to the terms of the trust. The county court accordingly
denied the Synod’s complaint in intervention. We affirm.
I. FACTUAL BACKGROUND
In 2006, Matthews established a revocable trust. Pursuant to
the trust, and upon her death, property was to be distributed to
a number of charitable organizations. Wells Fargo was selected
to serve as trustee.
The provisions located within article VIII of the trust pro-
vided for the following distribution of trust property: “(a)
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IN RE MARGARET L. MATTHEWS REVOCABLE TRUST
Cite as 312 Neb. 381One-half (1/2) to the SALVATION ARMY, WESTERN
DIVISION, Omaha, Nebraska; (b) One-sixth (1/6) to the
BETHESDA LUTHERAN HOME FOUNDATION, INC.,
Watertown, Wisconsin; (c) One-sixth (1/6) to the VISITING
NURSE ASSOCIATION, Omaha, Nebraska; and (d) One-
sixth (1/6) to the PELLA LUTHERAN CHURCH, Omaha,
Nebraska.” (Emphasis omitted.) The trust also provided that in
the event any of the beneficiaries did not exist at the time of
Matthews’ death or was no longer a charity, the bequest would
instead be allocated to the remaining existing and qualified
charities, pro rata.
In 2010, Matthews amended her trust, modifying only article
VIII. Through this amendment, Matthews removed Bethesda
Lutheran Home Foundation, Inc., as a beneficiary, reallocated
shares of trust property, and added the language “its chari-
table successors and assigns” to each charitable beneficiary
as follows: “(a) One-half (1/2) to the SALVATION ARMY,
WESTERN DIVISION, Omaha, Nebraska, its charitable suc-
cessors and assigns; (b) One-fourth (1/4) to the VISITING
NURSE ASSOCIATION, Omaha, Nebraska, its charitable
successors and assigns; and (c) One-fourth (1/4) to the PELLA
LUTHERAN CHURCH, Omaha, Nebraska, its charitable suc-
cessors and assigns.” (Emphasis omitted.)
After Matthews’ death in January 2018, Wells Fargo, serv-
ing as trustee, registered the trust with the court and filed a
petition for declaratory judgment. Wells Fargo sought a dec-
laration concerning distribution of trust property pursuant to
the terms of the trust as it pertained to Pella. After receiving
notice of the declaratory judgment action, the Synod filed
a motion to intervene, asserting that it was the proper and
lawful successor of Pella and that, as such, it was entitled to
Pella’s share of trust property. The Salvation Army and the
VNA resisted this claim, arguing that Pella had no charitable
successors or assigns and, as a result, that Pella’s share should
be distributed between the two pro rata, pursuant to the terms
of the trust.
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IN RE MARGARET L. MATTHEWS REVOCABLE TRUST
Cite as 312 Neb. 381On December 28, 2018, the county court authorized inter-
vention and permitted the Synod to align as a defendant. A trial
was held on the matter in April 2021 to determine whether the
Synod was Pella’s charitable successor and assign. The follow-
ing evidence was introduced at trial.
Pella was a local Lutheran congregation in Omaha, Nebraska,
whose activities were overseen by the Synod, a regional
governing body within the ELCA. The Synod oversees 200-
plus Lutheran congregations in Nebraska that together with
the other regional synods across the nation, make up the
national ELCA.
Although incorporating under state law was not a require-
ment of the ELCA, Pella was organized as a corporation
under Nebraska law and was governed in part by its articles
of incorporation. As a member of the Synod and the ELCA,
Pella was also subject to, and governed by, the ELCA’s model
constitution in addition to its own local constitution. Whenever
required provisions are updated or added to the model constitu-
tion by the ELCA, those provisions are automatically deemed
to be implemented as part of all local constitutions in effect,
even where local constitutions do not make any changes. The
model constitution in effect at the time Pella dissolved indi-
cated that Pella’s affiliation with the ELCA could be terminated
if the congregation took action to dissolve, ceased to exist, was
removed from membership in the ELCA according to internal
discipline procedures, or followed internal procedures other-
wise set forth in the model constitution. If the congregation
ceased to exist, title to any undisposed property would pass to
the Synod.
In 2012, the Synod assigned the Reverend Juliet Focken to
assist Pella in its search for a part-time minister after it had
become clear that Pella could not support a full-time minis-
ter. In 2013 and 2014, Focken held numerous meetings with
Pella’s council members to suggest and work through their
options moving forward. Some of these options included the
continued use of a part-time minister, the merger with another
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IN RE MARGARET L. MATTHEWS REVOCABLE TRUST
Cite as 312 Neb. 381congregation of the Synod, or dissolution. As a result of wan-
ing membership and other financial and pastoral concerns,
Pella ultimately made the decision to dissolve and cease wor-
ship services. The Synod again assigned Focken to oversee and
assist Pella in this process, and it provided guidance to Pella
regarding specific steps for dissolution.
Members of Pella were provided notice of a dissolution
meeting; however, the notice did not feature a dissolution plan
and did not indicate who received copies of this notice. At the
meeting, no record was made to show that the requisite number
of voting members were in attendance, nor that the requisite
number of members voted in favor of dissolution. Matthews
herself did not receive such notice, but Pella’s then-pastor
testified that Matthews did not receive a letter because of her
mental state and that Matthews would not have understood its
contents even if she had received a copy.
As part of the dissolution process, Pella evaluated its real
and personal property and Focken compiled a list of Pella’s
assets, which were transferred to fellow congregations or given
away to church members. In March 2014, nearly 4 years prior
to Matthews’ death, Pella held its last worship service. Any
property or assets that remained at that time were transferred to
the Synod through warranty deeds, including Pella’s building.
Focken then transferred Pella’s members to other congrega-
tions; some members voluntarily transferred, and others, such
as Matthews, were administratively transferred to a receiving
congregation at Augustana Lutheran Church (Augustana) in
Omaha. The remaining assets that had been transferred to the
Synod were sold or disposed of shortly thereafter, including
transfers of property to other congregations across Nebraska.
Pella’s building was sold that same month.
Brian Maas, the bishop and administrative leader of the
Synod, testified to the hallmarks that indicate the existence of
a congregation: It gathers regularly for worship, is served by
a ministry leader, has an active identification number within
the ELCA, and is recognized by the Synod and internally as
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IN RE MARGARET L. MATTHEWS REVOCABLE TRUST
Cite as 312 Neb. 381a congregation. According to Maas, even if there was never a
formal vote to dissolve Pella, the fact that Pella lacked all of
the hallmarks of a congregation meant that “within the eyes”
of the Synod Pella had “ceased to exist.” Maas also testified
that after Pella closed, all of the usual hallmarks of a closure
had occurred. The Synod had given notification to its council;
distributed assets (including the church building, the parson-
age, and some financial accounts); and archived all the records
it had for Pella.
Maas discussed the nature of individual churches which
were also corporate entities. Maas stated that a congregation’s
existence as a church was not contingent or dependent upon
the entity’s corporate structure and that there are congregations
within the Synod which are not formally incorporated. The
Synod does not formally require congregations to dissolve with
the Secretary of State’s office. A congregation which lacked
the requisite hallmarks would be deemed to no longer exist
regardless of whether it was still incorporated under the laws
of its home state, and, alternatively, congregations which had
all the hallmarks of existence would be deemed to exist even
if that congregation was not incorporated under the laws of its
home state.
The VNA vice president of development and communica-
tions, along with a Salvation Army major, who was also a
minister and divisional secretary of business for the Salvation
Army’s division located in Iowa, Nebraska, and South Dakota,
both testified for appellees. The VNA vice president detailed
the long-term relationship between the VNA and Matthews,
including that the VNA had cared for Matthews’ husband in
its hospice services and that a number of its hospice nurses
had established close personal relationships with Matthews
that lasted long after care for her husband had ceased. The
Salvation Army major detailed a similar relationship between
Matthews and the Salvation Army. According to the major,
Matthews provided the Salvation Army with over 70 gifts
during her lifetime, amounting to over $125,000 in support
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IN RE MARGARET L. MATTHEWS REVOCABLE TRUST
Cite as 312 Neb. 381for its charitable mission. Matthews was often in attendance
at special events hosted by the Salvation Army, and some
of its employees developed close personal relationships with
Matthews that included visits to Matthews’ home on a regular
basis to watch movies and spend time with Matthews.
After considering the evidence, the county court concluded
that the Synod failed to prove that it was Pella’s charitable
successor and assign, as such terms were used in the trust.
The county court found that (1) Pella had failed to properly
dissolve according to the Nebraska Nonprofit Corporation
Act (NNCA) and its own internal governance documents, (2)
Pella did not establish any separate foundation or charitable
entity to remain associated with the ELCA following dissolu-
tion, (3) the Synod did not support the charitable functions
of Pella in the same manner as Pella had prior to its dissolu-
tion, and (4) Matthews had not intended to make a distribu-
tion to the Synod. Accordingly, the county court denied the
Synod’s complaint in intervention and ordered that Pella’s
share of the trust be distributed to appellees pro rata pursu-
ant to the alternative distribution provisions of the trust. The
Synod appealed.
II. ASSIGNMENTS OF ERROR
The Synod assigns that the county court erred in (1) con-
cluding that the Synod was not an appropriate successor to
Pella, (2) concluding that the Synod was not entitled to receipt
of Pella’s share of Matthews’ assets and that such assets should
not have been distributed to the Synod, (3) finding that Pella
failed to follow its own requirements for dissolution, (4) mak-
ing a resolution of a doctrinal dispute, and (5) failing to prop-
erly follow the religious associations statutes.
III. STANDARD OF REVIEW
We begin by clarifying our standard of review. Beginning
in 1982 with In re Zoellner Trust, 1 this court stated that all
1
In re Zoellner Trust, 212 Neb. 674, 678, 325 N.W.2d 138, 141 (1982).
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IN RE MARGARET L. MATTHEWS REVOCABLE TRUST
Cite as 312 Neb. 381“[a]ppeals involving the administration of a trust are equity
matters and are reviewable in this court de novo on the record.”
A de novo on the record standard was thereafter applied to most
appeals involving trust administration issues. However, an
error on the record standard has also been utilized in a smaller
number of appeals regarding trust administration issues. We
recognized both standards of review in In re R.B. Plummer
Memorial Loan Fund Trust 2 and focused on the specific issues
presented to determine whether de novo review applied.
[1] In In re Margaret Mastny Revocable Trust, 3 we con-
cluded that this issue-specific approach was preferable and
more consistent with our standard for appellate review under
the Nebraska Probate Code. Accordingly, we held that “absent
an equity question, an appellate court reviews trust administra-
tion matters for error appearing on the record; but where an
equity question is presented, appellate review of that issue is
de novo on the record.” 4
[2] Pursuant to these holdings, whether this court reviews
the issues de novo on the record or for error on the record
requires examination of the issue underlying the claim. While
this case began as a declaratory judgment action, similar to a
trust administration issue, we have held that whether an action
for declaratory judgment is to be treated as one at law or one
in equity is to be determined by the nature of the dispute. 5 The
test is whether, in the absence of the prayer for declaratory
judgment, the issues presented should properly be disposed of
in an equitable action, as opposed to a legal action. 6
2
In re R.B. Plummer Memorial Loan Fund Trust, 266 Neb. 1, 661 N.W.2d
307 (2003).
3
In re Margaret Mastny Revocable Trust, 281 Neb. 188, 794 N.W.2d 700(2011).
4
Id. at 198, 794 N.W.2d at 710.
5
See Homestead Estates Homeowners Assn. v. Jones, 278 Neb. 149, 768
N.W.2d 436 (2009).
6
Boyles v. Hausmann, 246 Neb. 181, 517 N.W.2d 610 (1994).
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IN RE MARGARET L. MATTHEWS REVOCABLE TRUST
Cite as 312 Neb. 381Utilizing that test in the present case, the issues resemble
injunctive relief, an equitable remedy. The purpose of an
injunction is to restrain actions that have not yet been taken. 7
Similarly, the Synod has requested, through its complaint in
intervention and answer to Wells Fargo’s petition, that the
court find the Synod to be Pella’s charitable successor and
assign, and the Synod asks the court to order Wells Fargo to
either do or refrain from doing a specified act, i.e., to distrib-
ute Pella’s share to the Synod rather than to the other named
beneficiaries.
[3] Accordingly, we review this case de novo on the record. 8
In a review de novo on the record, an appellate court reap-
praises the evidence as presented by the record and reaches its
own independent conclusions concerning the matters at issue. 9
However, the court may give weight to the fact that the trial
court heard and observed the witnesses and their manner of
testifying, and accepted one version of the facts rather than
the other. 10
IV. ANALYSIS
1. Jurisdiction
[4] Before reaching the legal issues presented for review, it
is our duty to determine whether we have jurisdiction to decide
them. 11 This case presents multiple jurisdictional questions, so
we find it necessary to exercise that duty here.
(a) Subject Matter Jurisdiction
of County Court
[5] Where a lower court lacks subject matter jurisdiction
to adjudicate the merits of a claim, issue, or question, an
7
Stewart v. Heineman, 296 Neb. 262, 892 N.W.2d 542 (2017).
8
See In re Margaret Mastny Revocable Trust, supra note 3.
9
Id.
10
Siedlik v. Nissen, 303 Neb. 784, 931 N.W.2d 439 (2019).
11
Green v. Seiffert, 304 Neb. 212, 933 N.W.2d 590 (2019).
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IN RE MARGARET L. MATTHEWS REVOCABLE TRUST
Cite as 312 Neb. 381appellate court also lacks the power to determine the merits
of the claim, issue, or question presented to the lower court. 12
Thus, we begin with a review of the county court’s jurisdiction
in this matter.
According to Neb. Rev. Stat. § 30-3814(a) (Reissue 2016),
to the full extent permitted by the Nebraska Constitution, the
county court has jurisdiction over all subject matter relating to
trusts. Neb. Rev. Stat. § 30-3819 (Reissue 2016) states that by
registering a trust or accepting the trusteeship of a trust, the
trustee submits to the jurisdiction of the court of registration
in any proceeding under Neb. Rev. Stat. § 30-3812 (Reissue
2016). Section 30-3812(c) specifically states that a judicial
proceeding involving a trust may relate to any matter involving
the trust’s administration, including a request for instructions
and an action to declare rights.
[6,7] We have said that Nebraska’s declaratory judgment
statutes allow trustees and persons interested in the admin-
istration of a trust to seek a declaration regarding any ques-
tion arising in the administration of a trust. 13 A trustee or
beneficiary may apply to an appropriate court for instruc-
tions regarding the administration or distribution of the trust
if there is reasonable doubt about the powers or duties of
the trusteeship or about the proper interpretation of the trust
provisions. 14
Wells Fargo requested that the county court declare that
Pella did not exist, declare that Pella was not a beneficiary,
and order Wells Fargo to distribute the trust’s assets to the
Salvation Army and to the VNA. Wells Fargo also requested
that the county court find that such actions would not vio-
late Wells Fargo’s duties as trustee and to find that the trust
shall terminate upon payment of expenses, taxes, and dis-
tribution of remaining trust assets. Essentially, Wells Fargo
12
See In re Estate of Evertson, 295 Neb. 301, 889 N.W.2d 73 (2016).
13
In re Trust Created by Hansen, 274 Neb. 199, 739 N.W.2d 170 (2007).
14
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IN RE MARGARET L. MATTHEWS REVOCABLE TRUST
Cite as 312 Neb. 381requested that the county court instruct it, as trustee, on its
duties and powers related to payment of charitable bequests
within Matthews’ trust. This action is thus authorized pursu-
ant to §§ 30-3812(c), 30-3814(a), and 30-3819, as well as
the Nebraska Uniform Declaratory Judgments Act, 15 and the
county court had jurisdiction to adjudicate Wells Fargo’s peti-
tion for declaratory judgment.
(b) Appellate Jurisdiction
[8,9] For an appellate court to acquire jurisdiction of an
appeal, there must be a final judgment or final order entered by
the tribunal from which the appeal is taken. 16 To be final, an
order must dispose of the whole merits of the case. When no
further action of the court is required to dispose of a pending
cause, the order is final. 17
In this case, Wells Fargo registered the Matthews trust and
filed a petition with the court seeking a declaratory judgment
regarding distribution of trust funds. Wells Fargo requested
that the county court declare that Pella either did not exist or
was not a charity at the time of Matthews’ death, declare that
Pella was not entitled to a share of trust assets, and order Wells
Fargo to distribute the trust’s assets to the Salvation Army and
to the VNA.
After hearing from Wells Fargo and from the Synod, the
county court entered an order denying the Synod’s com-
plaint in intervention. It held that pursuant to the terms of
the trust, “Pella[’s] share of the Trust shall be distributed pro
rata to the Salvation Army and [the VNA].” The order also
stated that any additional motions or matters pending that
were not decided in accordance with the order were denied
as moot. This order disposed of the whole merits of the case
by granting the relief sought by Wells Fargo in its petition
15
Neb. Rev. Stat. § 25-21,149 et seq. (Reissue 2016).
16
In re Estate of Severson, 310 Neb. 982, 970 N.W.2d 94 (2022).
17
Olsen v. Olsen, 248 Neb. 393, 534 N.W.2d 762 (1995).
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IN RE MARGARET L. MATTHEWS REVOCABLE TRUST
Cite as 312 Neb. 381for declaratory judgment. Pursuant to this order, Wells Fargo
would have the authority to disburse funds to the Salvation
Army and to the VNA, and there were no remaining issues
which would require further action by the court. Accordingly,
this was a final, appealable order.
(c) Notice to Augustana
In its petition for declaratory judgment, Wells Fargo named
the three charitable beneficiaries listed in the trust—the
Salvation Army, the VNA, and Pella—but did not name either
the Synod or Augustana. The record indicates that the Synod
and Augustana each obtained property, assets, or congregation
members from Pella when it dissolved, and this raises a ques-
tion of whether either entity is a necessary party to this action.
While the Synod intervened in the matter, Augustana did not
intervene and took no action in this case. Thus, we must con-
sider whether Augustana’s absence deprived the county court,
and this court, of jurisdiction over this matter.
[10] When declaratory relief is sought, we have said that it
is a statutory requirement that all persons shall be made par-
ties who have or claim any interest which would be affected
by the declaration, and no declaration shall prejudice the
rights of persons not parties to the proceeding. 18 However, the
declaratory relief sought by Wells Fargo in this case relates to
its duties as trustee, and thus, in addition to our rules regard-
ing declaratory judgments, it also implicates the Nebraska
Uniform Trust Code.
By registering a trust, the trustee submits personally to
the jurisdiction of the court of registration in any proceeding
under § 30-3812 relating to the trust while the trust remains
registered, and to the extent of their interests in the trust, all
beneficiaries of a trust properly registered in this state are
subject to the jurisdiction of the court of registration for the
purposes of proceedings under § 30-3812, provided notice is
18
SID No. 2 of Knox Cty. v. Fischer, 308 Neb. 791, 957 N.W.2d 154 (2021).
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IN RE MARGARET L. MATTHEWS REVOCABLE TRUST
Cite as 312 Neb. 381given pursuant to Neb. Rev. Stat. § 30-2220 (Reissue 2016). 19
Section 30-2220(a)(2) states that notice by publication can be
accomplished by publishing at least once a week for three con-
secutive weeks a copy thereof in a legal newspaper having gen-
eral circulation in the county where the hearing is to be held,
the last publication of which is to be at least 3 days before the
time set for the hearing.
After Matthews’ death in January 2018, Wells Fargo regis-
tered Matthews’ trust with the Douglas County Court on July
16. In September, Wells Fargo filed a petition for declara-
tory judgment regarding the distribution of a trust under the
Nebraska Uniform Trust Code and the Nebraska Uniform
Declaratory Judgments Act. 20 The county court set a hearing
date for November 5. A notice of the hearing was forwarded
by the court registrar to The Daily Record, a legal news­paper,
with instructions for publication of the notice as required
by statute. 21
Wells Fargo thereafter filed an affidavit of mailing in accord­
ance with statute, 22 affirming to the court that notice of the
proceeding was first published in Douglas County, Nebraska,
and that on September 20, 2018, Wells Fargo sent copies of
the notice of hearing and petition for declaratory judgment
by certified mail to 26 parties. Of the 26 notices mailed, 12
were directed to the registered agent and former directors
of Pella, 2 were directed to the Salvation Army’s registered
agent and legal department, 1 was directed to the Nebraska
Attorney General, and 11 were directed to the registered
agent and directors of Augustana. As a result of this notice,
the Synod sought, and was allowed, to intervene in the action
and align as a defendant. A copy of the Synod’s complaint in
19
See § 30-3819(a) and (b).
20
See §§ 30-3812(c), 30-3814(a), 30-3819, and 25-21,149 et seq.
21
§ 30-2220(a)(2).
22
§ 30-2220(c) (“[p]roof of the giving of notice shall be made on or before
the hearing and filed in the proceeding”).
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IN RE MARGARET L. MATTHEWS REVOCABLE TRUST
Cite as 312 Neb. 381intervention was mailed to all interested parties, including at
least 11 directors of Augustana. Hence, we find that Augustana
was properly notified of these proceedings.
[11,12] We have said that “[t]he act of registering a trust
gives the county court jurisdiction over the interests of all
notified beneficiaries to decide issues related to any matter
involving the trust’s administration, including a request for
instructions or an action to declare rights.” 23 The term “ben-
eficiary” includes persons with a present or future beneficial
interest in a trust, vested or contingent. 24 We have also held
that Nebraska’s declaratory judgment statutes allow trustees
and persons interested in the administration of a trust to seek
a declaration regarding any question arising in the administra-
tion of a trust, including a request for the court to instruct the
trustee of its duties and powers. 25
In this action, the county court had jurisdiction to make a
declaration of rights of the beneficiaries of the trust and to
accordingly instruct Wells Fargo as to the distribution of trust
property. Because Augustana was properly notified of the trust
proceedings, Augustana’s absence did not deprive the county
court of jurisdiction and the county court’s judgment in the
matter is binding on Augustana to the extent of its interests
in the trust. Consequently, this court has jurisdiction over this
claim. We turn now to the merits of the Synod’s claim.
2. Doctrinal Issues
The Synod assigns that the county court erred in making a
resolution of a doctrinal dispute, an issue which underlies each
of the Synod’s arguments. The Synod argues that the deter-
mination of whether Pella had ceased to exist is a doctrinal
matter, which can only be made by the Synod, and that such
23
In re Trust Created by Hansen, supra note 13, 274 Neb. at 206-07, 739
N.W.2d at 177 (emphasis supplied).
24
In re Trust Created by Hansen, supra note 13.
25
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Cite as 312 Neb. 381determination cannot be adjudicated by the court using neutral
principles of law.
The Synod misunderstands this court’s use of neutral prin-
ciples of law to adjudicate disputes involving religious enti-
ties. We have applied the NNCA 26 to assess church closings
and property transfers to affiliate churches and have applied
a neutral principles of law approach to adjudicate disputes
where religious organizations disagree with one another as to
the state of the law or resolution of their dispute.
For example, in Glad Tidings v. Nebraska Dist. Council, 27
this court applied the NNCA to adjudicate an intrachurch
dispute regarding property held by each entity. In Glad
Tidings, a local church wanted to dissolve and a larger
affiliate church ordered that certain property belonging to
the local church must be transferred to the larger affiliate.
The local church sought a declaration that the board of direc-
tors had exceeded its authority in transferring such property
to the larger affiliate. We applied the NNCA and the Model
Business Corporation Act to define the term “transaction”
as it related to the dispute and concluded that no transaction
had occurred between the local and larger church entities.
We did not overstep the authority of each church entity to
decide its own outcomes in regard to doctrinal matters, but
instead looked to the rules governing corporations to resolve
a nondoctrinal question between the entities concerning the
property dispute.
And in Aldrich v. Nelson, 28 this court found that the dis-
trict court had jurisdiction to adjudicate the dispute, even
where the issue presented was an internal church dissolu-
tion dispute between a local Lutheran church and the larger
26
See Neb. Rev. Stat. §§ 21-1901 to 21-19,177 (Reissue 2012 & Cum. Supp.
2020).
27
Glad Tidings v. Nebraska Dist. Council, 273 Neb. 960, 734 N.W.2d 731(2007).
28
Aldrich v. Nelson, 290 Neb. 167, 859 N.W.2d 537 (2015).
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Cite as 312 Neb. 381affiliated synod. We stated the court was allowed to apply neu-
tral principles, defined as “‘secular legal rules whose applica-
tion to religious parties or disputes [do] not entail theological
or religious evaluations,’” in order to determine the outcome
of the issue from a secular, not religious, perspective. 29 Here,
the same is true: The county court was not tasked with deter-
mining the doctrinal question of whether Pella existed with
such hallmarks that it qualified as a congregation within the
ELCA and was subject to the control of the Synod. Instead,
the county court was tasked with analyzing whether Pella’s
methods of dissolution had an impact on whether the Synod
was Pella’s charitable successor and assign and thus entitled to
Pella’s portion of trust property.
The Synod agrees that Pella did not exist at the time of
Matthews’ death. The parties disagree as to whether Pella had
a charitable successor and assign for purposes of the trust. In
order to interpret the meaning of the phrase “charitable suc-
cessors and assigns,” the county court looked to the NNCA to
assess whether Pella, as a nonprofit corporation incorporated
in the State of Nebraska, had dissolved in a manner consistent
with State law such that the specific charitable activities of
Pella would be supported by the Synod moving forward, mak-
ing the Synod a charitable successor and assign of Pella. The
county court did not make a resolution of a doctrinal dispute
in determining the issues of this case. This assignment of error
is without merit.
3. Religious Associations Statutes
After arguing that this issue is a doctrinal matter, the Synod
next argues that the county court erred in analyzing the issues
under the NNCA, asserting that such statutes do not control
the issue of Pella’s existence. The Synod argues that the
county court should have looked to the statutes concerning
29
Id. at 170, 859 N.W.2d at 540.
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Cite as 312 Neb. 381religious associations and the vesting of property in religious
entities which have ceased to exist. 30
Contrary to the Synod’s position on this matter, these stat-
utes merely establish a method for church entities to obtain
good title for real and personal property owned by a church
which is abandoned or which ceased to exist. 31 These statutes
might have been applicable if Pella had dissolved without first
transferring its real and personal property to the Synod. But
here, Pella ensured that the Synod was able to obtain good
title and executed warranty deeds for its property to the Synod.
The religious association statutes do not resolve the issue of
whether the Synod was a charitable successor and assign of
Pella such that it is entitled to Pella’s share of the trust. This
assignment of error is without merit.
4. Pella’s Dissolution
Next, the Synod argues that the county court erred in finding
that Pella failed to follow its own requirements for dissolu-
tion. Pella, as a religious nonprofit corporation incorporated
under the laws of Nebraska, was subject to the NNCA. Under
the NNCA, steps for corporate dissolution are set forth at
§ 21-19,130. The record indicates that Pella sent notice regard-
ing a special meeting to vote on dissolution, but that no record
was made as to which members received notice, which mem-
bers were present at the meeting, or how many members voted.
This evidence is therefore insufficient to prove that Pella com-
plied with the two-thirds or majority vote provisions required
by the NNCA for dissolution.
The evidence is also insufficient to prove that Pella com-
plied with its own internal requirements for dissolution.
According to the ELCA’s model constitution, a congregation’s
affiliation with the ELCA can be terminated if the congrega-
tion takes action to dissolve, ceases to exist, is removed from
30
See Neb. Rev. Stat. §§ 21-2801 to 21-2803 (Reissue 2012).
31
See § 21-2801(3).
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Cite as 312 Neb. 381membership, or follows the procedures laid out at “*C6.05.”
for termination, which include a resolution indicating intent
to terminate, 30 days’ notice of the meeting to the bishop of
the Synod, and a special meeting and two-thirds vote of vot-
ing members present, among other provisions. These provi-
sions within the model constitution are required provisions
and were binding on Pella even in the absence of a change
to Pella’s local constitution. But again, the record does not
contain evidence that Pella gave the required notice, that the
notice was received by the correct parties, or how many mem-
bers attended the special meeting or voted in favor of dissolu-
tion. Testimony from both Maas and Focken also showed that
Pella’s council and leadership members had received a copy of
the ELCA’s suggested steps for dissolution, but that Pella did
not follow them.
In dissolving its congregation, Pella did not follow the steps
for dissolution set forth in the NNCA or the steps set forth in
Pella’s own constitution and bylaws, nor did Pella follow the
ELCA’s suggested steps for dissolution. Pella thus failed to fol-
low its own requirements for dissolution, and this assignment
of error is without merit.
5. Successors and Assigns
Finally, the Synod assigns that the county court erred in
concluding that the Synod was not “an appropriate successor”
to Pella and that as such, the Synod was not entitled to Pella’s
share of the Trust.
(a) Natural Versus Charitable Successors
The Synod argues, in part, that the Synod was Pella’s natural
successor or appropriate successor and asserts that any property
held by Pella should thus become the property of the Synod.
The trust stated that the bequest was for Pella, if in existence as
a charity, or to Pella’s “charitable successors and assigns.” Use
of the term “natural” in this context is inappropriate and does
not resolve the issues raised by either party; hence, we limit
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Cite as 312 Neb. 381our analysis here to whether the Synod is a charitable successor
and assign of Pella.
(b) Plain Meaning of Successors and Assigns
The term “successor” is defined as (1) “[s]omeone who suc-
ceeds to the office, rights, responsibilities, or place of another;
one who replaces or follows a predecessor”; or (2) a “cor-
poration that, through amalgamation, consolidation, or other
assumption of interests, is vested with the rights and duties
of an earlier corporation.” 32 The term “assignee” is defined as
“[s]omeone to whom property rights or powers are transferred
by another.” 33 However, “[u]se of the term is so widespread
that it is difficult to ascribe positive meaning to it with any
specificity.” 34 Here, both parties have focused their arguments
on whether the Synod was a successor to Pella.
In concluding that the Synod was Pella’s successor per these
plain definitions, the Synod compares this case to Crumbley v.
Solomon, 35 wherein a local church entity known as Franklin
Tabernacle attempted to withdraw from a larger church entity,
the Holiness Baptist Association, by a majority vote of its
members. The opposing members of Franklin Tabernacle and
trustees of the Holiness Baptist Association sued the with-
drawing members to establish a right of the association to
control local church property. The Crumbley court held that
the disputed property was being held in trust by Franklin
Tabernacle for the benefit of the Holiness Baptist Association.
For that reason, where the deed to property held by the local
church used the phrase “successors and assigns,” it contem-
plated that the association was such a successor.
However, the Crumbley decision was based on application
and interpretation of statutory framework that we do not share
32
Black’s Law Dictionary 1732 (11th ed. 2019).
33
Id. at 147.
34
Id.
35
Crumbley v. Solomon, 243 Ga. 343, 254 S.E.2d 330 (1979).
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Cite as 312 Neb. 381with Georgia and was the result of a very different factual cir-
cumstance wherein the two church entities were in disagree-
ment with one another as to the rightful owner of the property.
In Crumbley, the local church had vested rights in the disputed
property; here, Pella merely had a contingent interest in the
trust. The rules of the local church in Crumbley stated that
all property would be held for the larger entity, regardless of
the decisions of the local church to leave the larger entity at
a later time. Here, Pella’s property would pass to the ELCA
if the congregation was both dissolved and its property was
undisposed, but Pella otherwise retained a right to deed its
property to other Lutheran congregations or entities. Crumbley
does not resolve the issues presented here.
Next, the Synod compares this case to Larkin v. City of
Burlington. 36 In Larkin, the city entered into a development
agreement with Northshore concerning undeveloped property.
A later dispute between the parties was settled pursuant to a
consent judgment which allowed Northshore to apply for a
permit seeking no more than 60 residential units on the site
of the property and which was binding on the successors and
assigns of Northshore. After Northshore went into foreclo-
sure, the property was sold to the plaintiff landowner, who
filed for a permit to develop the land pursuant to the consent
judgment. The Vermont Supreme Court concluded that “[t]he
boilerplate language ‘successors and assigns,’ when refer-
ring to corporations, ordinarily applies only when another
corporation, through legal succession, assumes the rights and
obligations of the first corporation.” 37 The development agree-
ment was not binding on the plaintiff landowner because he
had not assumed the rights and obligations of Northshore
in developing the premises and was not a continuation of
Northshore’s corporate entity.
36
Larkin v. City of Burlington, 172 Vt. 566, 772 A.2d 553 (2001).
37
Id. at 569, 772 A.2d at 557.
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Cite as 312 Neb. 381While both parties have focused their arguments here on
whether the Synod has proved that it assumed any rights and
obligations of Pella such that Larkin would control the dis-
position of trust assets one way or another, both parties have
incorrectly framed the issues presented by this case: When
Matthews amended her trust, she made a bequest to Pella as
a charitable organization and specifically allowed that the
bequest could only be made to Pella, if it continued to exist
as a charity, or to its charitable successors and assigns, if such
successor organization was also a charity. The trust did not
provide rights to a mere corporate successor, and the holdings
in Larkin regarding corporate successors and assigns distracts
from the real issue.
Whether the Synod was Pella’s successor for purposes of
corporate property ownership would answer the question of
what to do with property owned by or vested in Pella. But
resolution of that question does not answer what to do where
a property interest has not yet vested in Pella, as is the case
here. 38 In order to be entitled to Pella’s share of trust property
under the terms of the trust, the Synod must prove that it is a
charitable successor or assign of Pella.
(c) Charitable Successor
[13-15] The primary rule of construction for trusts is that a
court must, if possible, ascertain the intention of the testator or
creator. 39 A gift, donation, or bequest by name, without further
restriction or limitation as to use, to a corporation organized
and conducted solely for charitable purposes, will be deemed
to have been made for the objects and purposes for which
the corporation was organized, and not to the corporation
38
See In re Trust Created by Haberman, 24 Neb. App. 359, 886 N.W.2d
829 (2016) (until testator’s death, beneficiary’s interest in trust property is
merely contingent expectancy).
39
In re Wendland-Reiner Trust, 267 Neb. 696, 677 N.W.2d 117 (2004).
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Cite as 312 Neb. 381itself. 40 The charitable intent of the donor is ascertained by
reference to the charitable purposes of the donee. 41
Membership in Pella was already waning at the time
Matthews amended her trust to add the “charitable successors
and assigns” language, apparently in an effort to avoid compli-
cations if Pella ceased to exist either as an entity or as a charity
prior to Matthews’ death. Through this amendment, Matthews
established a clear intention to leave money not just to Pella,
the Salvation Army, or the VNA as corporate entities, but as
charities which undertook specific charitable purposes. Thus,
in order to establish a right to Pella’s share of trust property,
the Synod must prove that it can and will carry on the chari-
table goals and purposes of Pella.
According to the testimony of Maas, local congregations
such as Pella are gathered to form their local worshiping
community. The Synod, on the other hand, is a “district-like
organization” that oversees as many as 233 congregations
in Nebraska. According to Maas, members and staff of the
Synod work to oversee congregations, taking care of paper-
work, as well as other legal and administrative matters. Unlike
the local congregations, the Synod typically holds services
annually, not weekly. The Synod ultimately functions differ-
ently than Pella and does not share the same specific purposes
which were previously undertaken by Pella, a local congrega-
tion of which Matthews was a member. Based on our de novo
on the record review, we find that the Synod has not proved
it was a charitable successor and assign of Pella. The Synod’s
first assignment of error is without merit.
Where the Synod has not proved that it is a charitable suc-
cessor and assign to Pella, it is not entitled to a share of trust
40
In re Estate of Harrington, 151 Neb. 81, 36 N.W.2d 577 (1949). Accord
Root v. Morning View Cemetery Assn., 174 Neb. 438, 118 N.W.2d 633(1962).
41
Dept. of Mental Health v. McMaster, 372 S.C. 175, 642 S.E.2d 552(2007).
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Cite as 312 Neb. 381property; hence, the Synod’s second assignment of error is also
without merit.
V. CONCLUSION
This court has jurisdiction to adjudicate the issues pre-
sented. Resolution of the issues does not require this court to
resolve any doctrinal matters, and the county court also did not
make a resolution of any doctrinal matters. The county court
did not err when it analyzed the issues using the NNCA, nor
when it concluded that Pella failed to follow its own proce-
dures for dissolution.
Based upon a de novo on the record review of the issues
presented, we find that the Synod did not prove it was a chari-
table successor of Pella. The Synod’s assigned errors are with-
out merit. Accordingly, we affirm the decision of the county
court, which denied the Synod’s complaint in intervention
and ordered distribution of Pella’s share of trust assets to the
Salvation Army and the VNA, pro rata, pursuant to the terms
of the trust.
Affirmed.
Miller-Lerman, J., not participating.