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Clark v. Summers

Court of Appeals of Arkansas, Division II

April 4, 2018

KENNETH J. CLARK, AS TRUSTEE OF THE CLARK REVOCABLE TRUST APPELLANT
v.
MELVA JEAN SUMMERS APPELLEE

          APPEAL FROM THE CARROLL COUNTY CIRCUIT COURT, EASTERN DISTRICT [NO. 08ECV-15-34] HONORABLE SCOTT JACKSON, JUDGE

          Taylor & Taylor Law Firm, P.A., by: Andrew M. Taylor and Tasha C. Taylor, for appellant.

          Richard F. Hatfield, P.A., by: Richard F. Hatfield, for appellee.

          BART F. VIRDEN, JUDGE

          DISMISSED WITHOUT PREJUDICE

          Abramson and Whiteaker, JJ., agree.

         Kenneth J. Clark appeals the Carroll County Circuit Court's order that two trust assets must be reappraised and the assets of the trust redistributed accordingly. We dismiss without prejudice for lack of a final order.

         In 1997, Kenneth B. Clark and Melva Clark, husband and wife, executed a trust and named their four children, Kenneth J. Clark (Kenneth J.), Melva Jean Summers, Cora A. Clark, and Barbara R. McClenathan, as beneficiaries. The trust named Kenneth J. as the successor trustee upon the death of both parents. The trust owned a one-half interest in a 360-acre tract of land (parcel 1) and full interest in a 100-acre tract of land (parcel 2). The value of these assets is the crux of the parties' dispute.

         In 2012 Melva Clark died, and pursuant to the language of the trust, the decedent's share of parcel 1 was transferred into the surviving grantor's "survivor's trust." Kenneth J. and his father drew up an agreement that, for the purpose of transferring the asset to the survivor's trust, set the value of parcel 1 at $180, 000.

         In 2013, Kenneth B. Clark passed away. The trust directs that on the death of both grantors, Kenneth J. shall distribute the interest in parcel 1 to himself and his wife, Peggy Clark. The trust also sets forth that

[t]he Trustee shall determine the value of the property being distributed to KENNETH J. CLARK and PEGGY CLARK as set forth in paragraph C above [parcel 1]. The Trustee shall then pay an equal sum to MELVA JEAN SUMMERS, CORA A. CLARK, and BARBARA R. McCLENATHAN. Any remaining assets shall be divided into four (4) equal shares and distributed in equal shares to each of the four (4) children per stirpes. It is the intention of the Grantors to make equal gifts to their children except that Kenneth Jay Clark is to receive specific property.

         Upon his father's death, Kenneth J. paid the trust $180, 000 for parcel 1 and distributed the proceeds of the transfer to himself and each of his siblings. Each of the four beneficiaries received $45, 000. Kenneth J. decided to purchase parcel 2 from the trust as well, and he had it appraised. The value of parcel 2 was estimated to be $240, 000. Kenneth J. sold the parcel to himself and distributed a one-quarter share of the proceeds-$60, 000- to each of his siblings and to himself.

         Summers filed a motion for declaratory judgment in which she alleged that Kenneth J. undervalued parcel 1 and parcel 2, which resulted in distribution of a larger portion of the trust assets to himself. Summers requested that the circuit court require a new appraisal of parcel 1 by a mutually agreed-upon appraiser, that the circuit court order Kenneth J. to repay the trust for the unequal distribution of assets from the sale of parcel 1 to himself, that the circuit court cancel the sale of parcel 2 and refund Kenneth J. the money, and that the circuit court require Kenneth J. to distribute the trust property equally to all four beneficiaries.

         On April 7, 2017, after a hearing in which the parties presented evidence regarding the value of the land and argument regarding the language of the trust, the circuit court entered an order. The circuit court found that the intent of the trust was to equally divide the assets of the trust to the grantors' four children and that Kenneth J. breached his fiduciary duty as trustee by not properly valuing parcel 1. The circuit court also found that it was impossible to determine the value of the parcels based on the testimony, and it ordered new appraisals performed by an agreed-upon appraiser.

         On appeal, Kenneth J. asserts that the circuit court erred by ruling that he breached the terms of the trust and breached his fiduciary duty by valuing parcel 1 at $180, 000 and that the circuit court erred by ordering new appraisals of the property. Kenneth J. argues that the trust allows him to determine the value ...


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