Ray H. DAWSON, Jr., Appellant
v.
Janelle D. STONER-SELLERS, Individually and as Trustee of R&LD Trust, R&LD Trust II, and R&LD Trust III; Jennifer Bouchillon, Individually and as Trustee of R&LD Trust and R&LD Trust III; Jennifer Bouchillon and Luetta Dawson, as Co-Trustees of JDS Trust and JDS Trust II; and Luetta Dawson, Appellees
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APPEAL
FROM THE CRITTENDEN COUNTY CIRCUIT COURT [NO. 18PR-15-77],
HONORABLE VICTOR L. HILL, JUDGE
Andrea
Brock and Rita Reed Harris, Forrest City; and Brett D.
Watson, Attorney at Law, PLLC, by: Brett D. Watson, for
appellant.
Friday,
Eldredge & Clark, LLP, Little Rock, by: William A. Waddell,
Jr., and Lindsey H. Emerson for appellees.
OPINION
ROBIN
F. WYNNE, Associate Justice
Ray
Dawson Jr. appeals from an order of the Crittenden County
Circuit Court denying his second amended petition to direct
trustee to issue trusts reports and accountings and for
removal of trustees and for other relief. At issue was the
administration of several family trusts. He raises the
following points on appeal: (1) The court lacked jurisdiction
because the chief justice had no jurisdiction to assign the
special judge; (2) The court erred when it relied on
extrinsic evidence to determine the meaning of unambiguous
trust documents; (3) If extrinsic evidence were relevant, the
court erred by disregarding the R&LD settlors
near-contemporaneous statement of intent and the intent of
the R&LD III settlor; (4) The court erred by
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not finding that Janelle breached her duties as trustee and
not removing her as trustee; (5) The court erred by not
requiring an accounting; (6) The court erred by denying the
request for a jury trial; (7) The court erred by not
appointing a master; (8) The court erred by dismissing
Jennifer and by denying the motion to set aside her dismissal
or, alternatively, to grant a new trial; and (9) The court
erred by not invalidating the 2014 trust amendments. We
reverse the denial of a jury trial on Ray Jr.s legal claims
and remand for further proceedings, and we affirm in all
other respects.
Intervenor
Luetta Dawson and her husband Ray Dawson Sr.[1] were the
initial beneficiaries of the following irrevocable trusts:
R&LD Trust (created in 1986): grantor/settlor Luetta; trustee
Ray Dawson Jr.; initial beneficiaries Luetta and Ray Sr.;
secondary beneficiaries children of Ray Sr. and
Luetta.[2]
R&LD Trust II (1994): grantor/settlor Janelle; trustee Ray
Jr.; initial beneficiaries Ray Sr. and Luetta; secondary
beneficiaries Janelle and Ray Jr.
R&LD Trust III (1996): grantor/settlor Ray Jr.; trustee
Janelle; initial beneficiaries Ray Sr. and Luetta; secondary
beneficiaries Janelle and Ray Jr.
The
major assets of the R&LD trusts are tracts of farmland, which
generate substantial rental income. All three trust
agreements directed the trustees to pay sums "reasonably
necessary for the support, maintenance, medical care, and
education" of the initial beneficiaries during their
lives, and upon the death of an initial beneficiary, to the
surviving initial beneficiary for his or her life, and then
to the secondary beneficiaries for the same purposes until
termination of the trusts. The trustees were given broad
enumerated powers, and in addition, the trust agreements
stated: "It is the GRANTORS express intention to confer
upon the TRUSTEE every power of management which might be
conferred upon him." Additional trusts were created as
follows:
JDS Trust (1986): grantor/settlor Luetta; co-trustees Ray Jr.
and Luetta; initial beneficiary Janelle; secondary
beneficiaries Janelles children.
JDS Trust II (1994): grantor/settlor Ray Jr.; trustee Luetta;
initial beneficiaries Luetta and Janelle; secondary
beneficiaries appointed by Luettas will or, if appointment
power not exercised, Janelles children.
In
1998, Ray Jr. resigned as trustee of the R&LD Trust and the
R&LD Trust II, and Janelle became successor trustee. In June
2014, Ray Jr. sent Janelle, as trustee of the three R&LD
trusts, a formal request for a report and accounting
regarding the property of the trusts. In September 2014,
Janelle executed amendments to the R&LD Trust and the R&LD
Trust III naming her daughter Jennifer Bouchillon, who is a
certified public accountant, as co-trustee and limiting the
duty of a trustee to provide an accounting. Luetta likewise
executed an amendment to the JDS Trust II to add Jennifer as
co-trustee.
Ray Jr.
filed suit in April 2015, seeking trust reports and
accountings and also the removal of Janelle and Jennifer as
the trustees of the three R&LD Trusts. Luetta was permitted
to intervene in the action as an interested party. In
February 2016, the court granted partial summary judgment
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to Ray Jr. and ordered Janelle and Jennifer to provide Ray
Jr. with trust accounting information that he had requested.
In April 2017, Ray Jr. filed the operative pleading in this
matter— the second amended petition to direct trustee
to issue trusts reports and accountings and for removal of
trustees and for other relief.[3] In the second amended
petition, Ray Jr. alleged the following: failure to provide
an accounting (Count I); breach of fiduciary duty (Count II);
conversion (Count III); removal of trustees (Count IV);
injunctive relief (Count V); fraud and concealment (Count
VI); and conspiracy (Count VII). The gist of his complaint
was that Janelle had used the R&LD trusts to benefit herself,
and that she and Jennifer had breached their duties as
trustees. Janelle and Jennifer answered and asserted the
following affirmative defenses: failure to state facts upon
which relief can be granted under Ark. R. Civ. P. 12(b)(6);
dismissal pursuant to Ark. Code Ann. § 28-73-1006 (Repl.
2012); unclean hands; and estoppel and waiver. Luetta filed
an answer that included the same affirmative defenses. In
addition, Janelle and Jennifer, in their capacities as
trustees, filed a counterclaim and an amended counterclaim
against Ray Jr. In the amended counterclaim, they alleged
that Ray Jr. had approached Luetta in January 2014 when she
was ill and about to have brain surgery. At that time, he
obtained lease extensions with the trusts for cash rent that
was below market value. The trustees alleged undue influence,
self-dealing, unjust enrichment, and breach of his duties to
his co-beneficiaries; they demanded a trial by jury.
The
circuit court held a bench trial on October 10-13 and
December 19-21, 2017. The parties presented extensive
testimony and documentary evidence during the trial. At the
conclusion of Ray Jr.s case in chief, the court dismissed
the fraud and conspiracy causes of action and dismissed the
petition in its entirety as to Jennifer.[4] The parties filed
post-trial briefs, and on April 9, 2018, the court denied Ray
Jr.s petition and dismissed the action with prejudice. The
court also denied and dismissed the counterclaim and denied
all outstanding motions, including Ray Jr.s motion for new
trial or to set aside order on motion for judgment as a
matter of law. Ray Jr. appealed.
Jurisdiction of the Chief Justice to Appoint a Special
Judge
Ray
Jr. argues that the chief justice lacked jurisdiction to
assign the special judge in this case, Victor Hill, who thus
also lacked jurisdiction. He contends that the chief justice
lacked jurisdiction because not all judges in the circuit had
recused. Jurisdiction is the power of the court to hear and
determine the subject matter in controversy between the
parties.
Ulmer
v. Circuit Court of Polk Cty., 366 Ark. 212, 215, 234
S.W.3d 290, 293 (2006).
Here,
a special judge was requested because the newly elected
circuit judge would not have a "civil term" in
Crittenden County in 2018. With the agreement of the assigned
circuit judge, the administrative judge of the Second
Judicial District wrote a letter to Chief Justice Kemp
requesting appointment of recently retired Judge Victor Hill
"for the sake of judicial economy"; Judge Hill had
presided over the case before his retirement. On July 25,
...