Lookadoo v. Switzer

RITA W. GRUBER, Judge. 11 Steve Lookadoo appeals the September 1, 2009 order of Arkansas County Circuit Court, Probate Division, granting summary judgment for the trustees of the Kay McCollum Switzer Revocable Trust (Kay’s Trust) and dismissing his petition to construe the trust. After reviewing the facts in the light most favorable to the party resisting summary judgment, Acuff v. Bumgarner, 2009 Ark. App. 854, 371 S.W.3d 709, we affirm the decision of the circuit court. On November 22, 2007, Kay created Kay’s Trust and executed a pour-over will. She was trustee and successor trustees were her three adult children, who are appellees in the present case. Kay’s Trust directed that, following her death and end of the administration of her estate, the trustees retain her Arkansas County farm in a separate trust for Steve’s use and benefit (Steve’s Trust) during his lifetime, if at her death he “was in a relationship” with her. 12Under the terms of the trust, the trustees were instructed to determine in their “sole and absolute discretion,” after consulting with the children, the existence of this relationship. In January 2008 Kay died in Oklahoma. Her will was admitted to probate and her children appointed as executors. As permitted by the trust, the trustees changed the situs of the trust and the applicable law to Oklahoma. In April 2008 the children as executors of the estate filed in the Oklahoma court an application for construction and/or interpretation of testamentary documents, referring to both the will and Kay’s Trust, and requesting permission to encumber the farm for administrative expenses and estate taxes. Steve filed a response and objection, asserting that as a beneficiary of Kay’s Trust he would be directly affected by the relief the executors sought, which also would defeat the trust’s directives. The executors moved to dismiss his response and objection, stating that he was not a beneficiary but had a mere expectancy based on a condition precedent. They stated that they had no intention of creating Steve’s Trust because of their determination, which they had made after consulting with each other as Kay’s children, that at her death there was no relationship between Steve and her. In August 2008 Steve filed a petition to construe the trust in the Arkansas County Circuit Court. He asserted in the petition that jurisdiction for construction of Kay’s Trust lay in Arkansas County because the corpus was located there and that the actions of Kay’s children were as beneficiaries rather than trustees. He asked the court to determine that he had a relationship with Kay at her death and to prohibit the trustees from using the farm as Iscollateral. In February 2009, upon the trustees’ motion to dismiss Steve’s petition, the court stayed the Arkansas proceeding pending resolution of the relationship issue in the Oklahoma court. In May 2009 the trustees requested summary judgment in the Arkansas action on the basis that the Oklahoma court had granted summary judgment in their favor and confirmed their decision that there was no relationship between Steve and Kay. Steve filed a response and motion for summary judgment, asserting that Arkansas had jurisdiction because the case involved title to Arkansas real estate and that the Oklahoma order did not constitute res judicata or collateral estoppel. In its September 1, 2009 order granting the trustees’ motion for summary judgment and denying Steve’s summary-judgment motion, the circuit court found as a matter of law that his petition to construe the trust was barred by res judicata and collateral estoppel. The judgment incorporated a letter opinion rejecting Steve’s contention that the case involved a determination of title to Arkansas real estate, over which the Arkansas court had exclusive jurisdiction, and that Arkansas real estate law applied. The court noted that Kay’s Trust gave the trustees sole and absolute discretion to determine whether a relationship existed at the time of her death, a condition precedent to establishing Steve’s Trust. The court further noted that “pursuant to the trust, legal title to the farm is held by the trustees and will remain so until the assets are ultimately distributed according to the trust terms.” Steve appeals the order, asserting that the pertinent question before us is whether Kay’s |/Trust or Steve’s Trust is title holder of the farm. He argues that the Oklahoma court could not construe Kay’s Trust because “it related only to the Arkansas farm, the sole asset, which was Arkansas real estate,” and that the Arkansas circuit court should have decided whether the trustees breached their fiduciary duty in deciding that he lacked the required relationship with Kay. Steve asserts that summary judgment for the trustees was improper because res judicata does not apply to decisions of foreign courts affecting title to Arkansas real estate. Additionally, he complains that the Oklahoma decision was on appeal when the Arkansas court rendered its summary-judgment decision. In Crockett & Brown, P.A. v. Wilson, 314 Ark. 578, 582, 864 S.W.2d 244, 246 (1993), our supreme court rejected an argument that an order on appeal was not final. Noting the close relationship between finality for purposes of appeal and finality for purposes of res judicata, the Wilson court stated that res judicata was designed to prevent a party’s ability to “clog the courts and harass an adversary with suits on a claim already decided.” Id. In Reed v. Allen, 286 U.S. 191, 199, 52 S.Ct. 532, 76 L.Ed. 1054 (1932), the Supreme Court ruled that “where a judgment in one case has successfully been made the basis for a judgment in a second case, the second judgment will stand as res judicata, although the first judgment be subsequently reversed.” The Arkansas court ruled in the present case that application of Arkansas real estate law was not required, explaining as follows: Pursuant to the trust, legal title to the farm is held by the trustees and will remain so until the assets are ultimately distributed according to the trust terms. The existence of a relationship between Mr. Lookadoo and Ms. Switzer is a condition precedent to whether or not the farm will be administered as a separate trust. |fiThe Oklahoma court rightly decided this case as a matter of trust administration, not one of title to Arkansas real estate, and the Arkansas court properly rejected Steve’s argument that it must determine title to the Arkansas farm. Steve presents no convincing argument and cites no authority pertaining to the Arkansas court’s findings regarding res judicata and finality of the Oklahoma action. We find no merit to Steve’s argument regarding a lack of finality in the Oklahoma action. Affirmed. VAUGHT, C.J., and ROBBINS and GLOVER, JJ., agree. HART and BAKER, JJ., dissent.