Woodham, Denise v. Geary Wallce, Independent Estate of Dewey K. Wallace

AFFI RM; Opinion issued .Januarv 2. 2013.
In The
(!tiiirt uf TpIjlL5
FiftI Hi;1rict i,if rxai at JaUwa
No. 05-1 1-01 121-CV
[WIlSK WOODHAM, Appellant
V.
GEARY WALLACE, ESTATE OF I)EWKV K. WALLACE, KEVIN WALLACE,
DEBRA ( URINGION, ESTAIE OF EDA P WALLACE, MICHAF I IAYLOR,
INDEPENDEN1 EXECU FOR OF FilE ES I IL OF EDA P WALLACE, DALLAS
WHIRLPOOLS, LTD, AMERICAN WHIRLPOOLS, INC., U.S. WHIRLPOOLS, INC.,
Appellecs
On Appeal from the Probate Court
Collin County, Texas
Trial Court Cause No. PB-00i-949-06
MEMORANDUM OPINION
Before Justices Francis and Murphy’
Opinion By Justice Murphy
Denise Woodham, formerly known as Denise Sue Murphy, appeals from a final judgment
denying her claims under The Wallace Revocable Trust established by her parents and under the Last
Will and Testament of her father, Dewey Wallace. in seven issues, Woodham argues that the
Trust is invalid due to certain ambiguities and the Will should be construed to convey a lake house
that was owned by a limited partnership in which her parents were the only general and limited
Justice Joseph Moms was on the panel and participated at the submission oithis case, but due to his retirement on December31, 2012, from
this Court, he did not participate in the issuance of this Opinion. See Thx. R. At’t’, P. 41.1(a). (b),
partners We aifion.
BACKCROIJNI)
1)ewcv and his tie. Fda \‘Vallace. had three children that survived them: Woodham. Kevin
Wallace. and I)ehra Curinton. On June 1 3. I )94. Dewey and Fda established the Trust and listed
themselves as rantors. Article I of the Trust stated that “It jhe Trust shall have as its beneficiaries
the Grantors, and the descendants of the Grantors from time to time living.” The Trust specifically
provided that Dewey and Eda had three surviving children and listed them as “Kevin Wayne
Wallace, Denise Sue Murphy, and Debra Louise Curington.” Article VIII, which provided for
administration of a portion of the Trust known as the “Family Trust,” specified that Woodham would
receive “24( 1/21%” of’ the common stock ol’ American Molds, Inc. and that any remaining
undistributed portions of the Family Trust would he distributed “in equal shares to Kevin Wayne
Wallace. Denise Sue Murphy and Debra Louise Curington.”
Dewey and Eda amended the Trust three limes before they (lied. The first amendment kept
the language listed above stating that the beneficiaries of the Trust were the grantors and their
descendants and listing “Denise Sue Murphy” as one of the surviving children. But the following
sentence—written in all capital letters—was added to the end of that same paragraph: “THE
GRANTORS HAVE INTENTIONALLY MADE NO PROVISION IN THIS TRUST
AGREEMENT FOR THE USE OR BENEFIT OF DENISE SUE MURPHY, FOR REASONS
BEST KNOWN TO THE GRANTORS.” Article VIH was also amended to remove Woodham from
the list of individuals receiving special stock distributions, and the clause regarding any undistrihuted
portions of the Family Trust was modified to provide that any remaining undistributed portions
would now be distributed “in equal shares to Kevin Wayne Wallace and Debra Louise Curington.”
Thus, Woodham was excluded by the amendment.
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Approxmiately two years after the first amendment, Dewey and Fda amended the Trust again.
Like the hrst amendment. the second amendment kept the language stating that the descendants of
i)ewev and Fda were henehciaries ol the Trust and specifically listed l)enise Sue Murphy as one ot
the surviving children. But the lanuuage quoted above that excluded Woodham was amended fun her
to exclude \\‘oodham s descendants, as lollows:
FOR REASONS BEST KNOWN To THE GRANTORS, THE GRANTORS HAVE
IN1ENTION \I LYMADENOPROVISION INTHISTRUS1 AGRLEMENTIHOR
FIlE USE OR BENEFIT OF DENISE SUE MURPHY ANY OF 1 HE
DESCENDANTS OF DENISE SUE MURPHY OR ANYONE ClAIMING ANY
INTEREST HEREIN BY VIRTUE OF RELATIONSHIP OF (ONSINGUINITY
jsic OR \FFINITY WITH DENISE SUE MURPHY OR \NY OF THE
DESCENDANTS OF DENISE SUE MURPHY.
The second amendment also added the following language prohibiting Woodham and her
descendants from serving as trustees tinder the Trust:
NOTWITHSTANDING ANYTHiNG CONTAINED IN THIS TRUST
AGREEMENT TO TI-IF CONTRARY. IN NO EVENT SHALL DENISE SUE
MURPHY OR ANY OF THE DEASCENDANTS [sic I OF DENISE SUE MURPHY
EVER BE PERMITTED TO SERVE AS TRUSTEE OR CO-TRUSTEE
HEREUNDFR AND THE SAME ARF hEREBY EXPRESSLY DISQUALIFIED
FROM NOMINATION, DESIGNATION, APPOINTMENT OR SERVICE AS
TRUSTEE HEREUNDER.
Finally, the Trust was amended a third lime, but only as to Article VIII. Woodham again was
excluded from the list of individuals receiving specific stock distributions. The amendment kept the
conveyance of any undistrihuted portion of the Family Trust to Kevin and Curington, but added that
if Dewey and Eda had no descendants then living. “then one-half (1/2) of the trust estate of the Trust
then remaining undistrihuted shall be distributed to the heirs-at-law of Dewey K. Wallace (other than
Denice Isicl Sue Murphy and her descendants) and one-half (½) to the heirs-at-law of Fda P.
Wallace (other than Denise Sue Murphy and her descendants).”
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Dewey passed away on February 7, 2006. Eda died approximately tour years later, on March
3 I 2() 10. Dewey’s Will was filed on December 70. 2006 and
. admitted to probate on January 10.
2007. The inventory For his estate was approved on May 14. 2010.
Woodham sued. eIial1ening the inventory and petitioning br construction of both l)ewey’ s
\Vill and the Trust. Regarding the Trust, the trial court concluded as a matter of law that the Trust
was unambiguous. valid, and effective and that Woodharn and her descendants were ‘excluded from
any ownership, right, or interest in the corpus of the trust.” Regarding the Will, the trial court
concluded that Dewey did not convey the lake house to Eda. This appeal followed.
On appeal, Woodham argues that the Trust as originally created was valid, but the
amendments introduced so many contradictions that they ren(lered the Trust uncertain and void.
Woo(lham focuses on three uncertainties in the document. First, she argues that the Trust’s
beneficiaries cannot he identified with reasonable certainty. According to her, the Trust continues
to designate her as a beneficiary even though it also states, with the amendments, that the Trust has
no provisions for her use or benefit. She contends this language is uncertain and because a trust must
identify its beneficiaries with certainty, the failure to do so in this case renders the Trust void.
Woodham also argues on appeal that the purpose of the Trust is now vague. She contends
that the purpose of the Trust is clearly stated to he the financial well-being of Dewey and Eda along
with their descendants. But the amended versions conflict with this purpose by providing for the
special distribution of stocks at the death of both Dewey and Eda to individuals that are not their
descendants. Finally, Woodham argues that the language designating who can become a trustee is
vague and therefore it is impossible to determine “how the trusteeship would pass to Appellees
I Kevin] and Curington who are claiming to be the culTent co-trustees.”
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IMSCUSSH)N
The l4/allace Revocable Trust
The rules of construction of trusts are well settled. Harley v. Moody Nat ‘I Bank of Galveston.
98 S.W.3d 307, 310 (Tex, App.—Houston 1st DisLi 2003, no pet.). Construction of a trust is a
question of law that we review de novo. Soefje v. Jones, 270 S.W.3d 617, 625 (Tex, App.—San
Antonio 2008, no pet.). The court’s primary objective in construing a trust is to determine the intent
of the maker. See Harley, 98 S.W.3d at 310. If a trust is stisceptibleto a certain or definite meaning
or interpretation, we will conclude it is unambiguous and construe it as a matter of law. C’oker v.
Coker, 650 S.W.2d 391, 393 (Tex.1983): Wright v. Greenberg. 2 S.W.3d 666, 671 (Tex.
App.—Houston I 14th DisLj 1999, pet. denied). On the other hand, if a trust’s meaning is uncertain
or reasonably susceptible to more than one meaning, we will conclude it is ambiguous. Coker, 650
S.W.2d at 393—94. ln interpreting an unambiguous trust instrument, we examine the four corners
of the instrument to determine the settlor’s intent. Pose/iou v. Bank of Am., NA., 260 S.W.3d 707,
710 (Tex, App.—Dallas 2008, no pet.). We harmonize all provisions and construe the instrument
to give effect to all provisions so that no provision is rendered meaningless. Eckels v. Davis, 111
S.W.3d 687, 694 (Tex. App.—Fort Worth 2003, pet. denied).
To create a trust by a written instrument, the beneficiary, the res, and the trust purpose must
be identified. Perf’ct Union Lodge No. JO v. Jnterflrst Bank a/San Antonio, N.A., 748 S.W.2d 218,
220 (Tex. 1988). Woodham argues in her first issue that the Trust fails because its beneficiaries and
purpose cannot be identified with reasonable certainty, She also argues in her third issue that the
language specifying the means of trustee successorship is vague, and thus she questions whether
Kevin and Curington should serve as co-trustees.
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We first address whether the beneficiaries of the Trust can he reasonably identified.
Woodham argues that the Trust undisputably lists the descendants of Dewey and Eda as beneficiaries
and specifically lists her as one of those descendants. Thus, according to Woodham, she continues
to he in the class of persons to benefit from the Trust, Regarding the Trust statement that there are
no provisions for Woodham’s use or benefit, she asserts the clause fails to convey that she is not a
beneficiary. She argues the clause merely states that there are no “provisions” in the Trust for her
use or benefit. She asserts that at the least, this language creates a conflict and raises uncertainty.
In construing the Trust, we will conclude it is unambiguous if we can give it a certain or
definite legal meaning or interpretation. See Coker, 650 S,W,2d at 393. After stating that the Trust
shall have as its beneficiaries the grantors and the descendants of the grantors, the document lists the
survivmg children of Dewey and Eda, including Woodham. Then, in bold, underlined, all-
capitalized letters, the Trust states that “the Grantors have intentionally made no provision in this
trust agreement for the use or benefit of Denise Sue Murphy. . .
A beneficiary is a person for whose benefit property is held in trust. REsTATEMENT (THIRD)
OF TRusTs § 3 (2003). To say a trust agreement has no provision benefitting an individual is thus
equivalent to saying that person is not a beneficiary of the trust. The Trust paragraph must be read
in its entirety. When read in this manner, the Trust is subject to only one reasonable interpretation:
after naming Woodham as a surviving child of Dewey and Eda, the Trust explicitly and
unambiguously excludes Woodharn as a beneficiary. As suggested by appellees, this is a “carve-out”
provision affecting the entire document, thereby eliminating the need to exclude Woodham as a
descendant or beneficiary elsewhere in the Trust.
Woodham tries to create ambiguity by arguing that the language quoted above does not mean
that she is not a beneficiary of the Trust; instead, the “plain meaning of the words in [this I clause
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state that there are no pjyjsins in the trust for the use or benefit of I Woodhami.’ According to
Woodham, this language “compels a safari hunt of the trust to see whether there are provisions in
the Trust for IWoodham’sj use and/or her benefit, and there are.” She claims the language is
“advisory of what provisions are in the Trust, not definitive that Woodham is not a party of the Trust,
thereby creating the necessary conflict for uncertainty.” Except for saying that this clause “compels
a safari hunt” and is “advisory,” Woodharn does not attempt to provide this Court with an
alternative, reasonable interpretation of what this provision could otherwise mean. See Coker, 650
S.W.2d at 393—94 (trust is ambiguous when reasonably susceptible to more than one meaning). We
conclude there is none.
Our decision is buttressed by the amendments to other portions of the Trust. First, the
original document provided for a special distribution of stocks on the death of both Dewey and Eda
and specifically listed Woodham as an individual receiving a special distribution; the later
amendments modified this section, and Woodham was excluded from the list of individuals
receiving a distribution, Second, the original document provided that any undistributed remainder
of the Family Trust would be distributed in equal shares to Kevin, Woodham, and Curington; the
amendments excluded Woodham and specifically listed only Kevin and Curington. This section was
amended again to be even more specific: language was added that excluded Woodharn and her
descendants from receiving any undistributed remainder of the Family Trust in the event that both
Kevin and Curington were deceased. Finally, the original document was also amended to exclude
Woodham specifically from becoming a trustee. These provisions demonstrate an express intent to
exclude Woodham from receiving any benefits of the Trust—in other words, she is not a beneficiary
of the Trust.
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Alter reviewing the Fiust as a whole, including the amendments, we conclude the Trust
agreement is unambiguous and that it was the expressed intent ol Dewey and Eda to exclude
Woodham as a beneficiary. We therefore overrule Woodham’s first issue to the extent she argues
the Trust lacks the requisite certainty as to the beneficiaries.
Woodham also anues in her first issue that ilie purpose of the Trust is vague because of
contradictory language in dilferent provisions. Specifically, she claims that “jt jhe purpose declared
in the Trust is for the financial welfare of the settlors and for the the settlors’ descendents.” Yet “lijn
direct conflict with Ithat purposel,” the third amendment states that “shares of stock are to be
distributed to individuals who are not identified in Article I of the Trust as descendants and are
not descendants of the seuiors. She asserts that when the Trust shifts away from its purpose, its
purpose becomes uncertain,” and the Trust therefore is void.
We must interpret the Trust to give meaning to all its provisions and to enact the intent of
the grantors. See Hurlev, 98 S.W.3d at 310: Eckels. 111 S.3d at 694. The Trust provisions
designating distribution of certain stocks to individuals who were not descendants do not contradict
the more general statement that the intended beneficiaries are the grantors of the Trust and their
descendants. As appellees emphasize, this statement regarding the intended beneficiaries does not
limit the Trust’s purpose to henefitting only Dewey and Eda and their descendants. While
benefitting the grantors and their descendaHts might he a primary purpose of the Trust, it is not
exclusive. Instead. Dewey and Eda, as grantors of the Trust, chose to exclude one of their
descendants as described extensively above. They also chose to distribute specific property to named
individuals who were not their descendants, thus broadening the scope of distributions. Those
intentions are clear, and a comparison of these provisions does not render the Trust vague.
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\\oodham also ‘ugests the purpose ol the Trust is uncertain because the Trust us amended
designates her as a beneficiary hut then states that there are no provisions for her use or benefit, We
have already concluded that the Trust unambiguously excluded Woodham as a beneficiary. We thus
conclude there is no uncertainty regarding the purpose ol the Trust. We therelore ovemile
Vvoodhams first issue to the extent she argues the Trust’s purpose is vague or uncertain.
Finally, Woodham contends in her third issue that Kevin and Curington did not become cm
trustees under the Trust. Specifically, she argues that the succession ol trustees was uncertain, and
it was not clear that the trusteeship passed to Kevin and Curington. The Trust provides that:
The Trustee shall have the power to resign and designate successor Trustees.
If a vacancy in the trusteeship of a Co-Trustee shall not he filled pursuant to the
power to designate successor Trustees, then the remaining Co-Trustee shall be the
sole Trustee. If a vacancy in the Trusteeship of the Co—Trustees shall not be filled
pursuant to their power to designate successor Trustees, then GEARY WAYNE
WALLACE is nominated, designated and appointed to serve as successor Trustee.
In the event he shall be unable or unwilling to serve as Trustee, KEVIN WAYNE
WALLACE AND DEBRA LOUISE CURINGTON, or the survivor of them, are
hereby nominated, designated and appointed to serve as successor Co-Trustees.
According to the appellees. Eda became the sole trustee when Dewey died. When Eda died.
Geary ‘Wallace became the sole trustee as provided for in the Trust. (Ieary declined to serve as
trustee, so Kevin and Curington became co-trustees.
Woodham argues there is no evidence that Eda designated a successor co-trustee during her
lifetime: she was therefore sole trustee. She argues that the Trust contradicts itself by stating that
a vacancy in the trusteeship of the co-trustees “shall be filled through the appointment of Executor
Geary to serve as successor co-trustee,” and this provision “extinguish[edj Eda as the sole Trustee.”
Woodharn then argues that because this language is vague, “one cannot ascertain how the trusteeship
would pass to Appellees IKevini and Curington who are claiming to be the current co-trustees.”
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\Ve must interpret the Trust to enact the rantors intent. Ekcls. I I I S.3d at 6)4. I lere. both
the mtent of the grantors and language ol the Trust are clear. The [rust shows the grantors intent
that Geary was to serve as trustee in the event a trustee failed to designate a successor trustee, and
Kevin and Curington were to become co-trustees if Geary could not serve or retused to serve. l3oth
Woodham and appellees agree there is no evidence Eda designated a successor trustee or cotrustee.
(iearv therefore was designated as trustee. Geary refused to serve, so Kevin and (‘urington were
appointed cotrustees. The current trustee arrangement is in accord with both the language 01: the
Trust agreement and the grantors’ intent. We overrule Woodham’s third issue regarding the
trusteeship.
Having ovelTuled Woodhams first and third issues concerning the Trust, we need not
address her second, fourth, and fifth issues regarding the use of a contingent testamentary trust as
an option to maintain a valid trust or the use of extrinsic evidence to determine the intent of the
grantors. See Tizx. R. APP. P. 17.1.
flu’ Last Will and Testament (.)f Dewey K. Wallace
Woodham asks in her sixth issue that we construe Dewey’s Will, which was signed the same
day the Trust was first established. Specifically, she argues the trial court erred by using partnership
law to determine that a lake house in the name of “Dallas Whirlpools, LTD” was owned by the
partnership, not Dewey. She contends that Dewey expressed his intent in the Will to convey that
house to Eda, which would result in the house being part of the inventory, appraisement. and list of
claims in the probate court.
Dewey’s Will provided that all of his estate not otherwise provided for was bequeathed to
the Trust. Regarding his residences, the Will provided:
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I give, devise, and bequeath to my wife, if she shall survive me, for her own use in
fee simple, all my right, title and interest in and to any residences which we shall own
at my death and in which we shall then customarily reside all or any part of the
year.
Dewey and Fda used two houses: a residence in McKinney, Texas, which was owned by
Dewey and Fda with the deed in their name, and a lake house and surrounding property on Lake
Texoina in Kingston, Oklahoma with a deed in the name of Dallas Whirlpools, LTD. Dallas
Whirlpools is a limited partnership with Dewey and Eda as its only general and limited partners.
Based on the Will’s express language and the deed for the McKinney house, Dewey’s ownership in
that house was bequeathed to Eda, Conversely, the lake house was owned by the partnership and
could not be bequeathed outright to Eda under the Will,
Woodham argues that it was Dewey’s intent to convey the lake house to Eda as evidenced
by the fact that Dewey and Eda were the only owners of Dallas Whirlpools. In construing the Will,
we apply the same rules of construction used for trusts, In re Ray Ellison Grandchildren Trust, 261
S.W.3d 111, 117 (Tex. App.—San Antonio 2008, pet. denied). We must determine the intent of the
maker as evidenced in the four corners of the document. Eckels, lii S.W.3d at 694. The language
of the Will is unambigous—Dewey conveyed to Eda “all [his I right, title and interest in and to any
residences which Itheyl shall own at [hisj death and in which [theyl shall then customarily reside
all or any part of the year. . . .“ It is undisputed that Dallas Whirlpools held the deed for the lake
house. Dallas Whirlpools was a limited partnership, and partnership property is owned by the
partnership itself, not by the individual partners. Marshall r. Marshall, 735 S.W.2d 587, 594 (Tex.
App.—Dallas 1987, writ ref’d n.r.c.). Dewey and Eda therefore did not own the lake house when
Dewey died. Dewey could only convey property that he owned. Accordingly, we cannot construe
the Will as conveying the partnership property. Woodham’s sixth issue is overruled.
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Woodhams seventh issue is a conclusory request that we render judgment in her lavor.
Having overruled her issues, we deny that request and affirm the trial court’s ruling.
JUSTICE
11112lF.P05
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Qtnurt of Aprah
ftt! tIitrirt of ixzt nt Oa11u5
JUDGMENT
DENISE W0( )DI4MvI, Appellant Appeal from the Probate Court of Collin
County, Texas. (Tr.CtNo. P8-001-949-06).
No. 05-1 1-01 121-C\J V. Opinion delivered by Justice Murphy,
Justice Francis participating.
GEARY WALLACE. ESTATE OF
1)1 WE K \\ \I I A( I KL’ IN
WAL L\( I DI 13R\ ( LRI\J ION
I S I A I F 01 1 DA P \VALLAc I
Ml( HALL 1ALOR INDFPENDENF
LXECUI OR OF FHL I S FA FE 01 EDA P
WALLACI i)ALLAS \VHIRLPOOI S,
LI L) \\IF RICA
\ \‘v1IIRLPO()L S INC
1
U.S. WHIRLPOOLS, INC., Appcllees
in accordance with this Court’s opinion of this date, the judgment of the trial court is
AFFIRMED. It is ORDERED that appellec Geary Wallace, Estate of Dewey K. Wallace,
Kevin Wallace, Debra Curington, Estate of Eda P. Wallace, Michael Taylor, Independent
Executor of the Estate of Eda P. Wallace, Dallas Whirlpools, LT[), American Whirlpools, inc.,
U.S. Whirlpools, inc. recover their costs of this appeal from appellant.
Judgment entered January 2, 2013.
/7
MARY MkiRPHY / 71
JUSTICE