holding that claim preclusion was inapplicable when the defendant met prongs one and two but could not prove prong three
How later courts described this case
- holding that claim preclusion was inapplicable when the defendant met prongs one and two but could not prove prong three
- applying the rules of interpretation for wills to the terms of a trust
Written by the judges who cited it.
The opinion
MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2016 ME 26
Docket: Ken-15-136
Argued: November 3, 2015
Decided: February 4, 2016
Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and
HUMPHREY, JJ.
FIDUCIARY TRUST CO. et al.
v.
MANCHESTER H. WHEELER JR.
MEAD, J.
[¶1] Manchester H. Wheeler Jr. appeals from a summary judgment entered
by the Superior Court (Kennebec County, Mullen, J.) in favor of Fiduciary Trust
Company on Fiduciary’s complaint to determine the proper method of distributing
the principal of a trust of which Wheeler is a beneficiary. On appeal, Wheeler
contends that the Superior Court erred in concluding that the doctrine of
res judicata did not control the construction of the disputed term of the trust. We
affirm the judgment.
I. BACKGROUND
[¶2] The relevant facts in the summary judgment record are undisputed.
Fiduciary is the acting trustee of the Elizabeth S. Haynes and Robert H. Gardner
Trust, created in 1911 and amended in 1918. Pursuant to paragraph 1 of the trust,
2
the trust’s net income was to be paid to Elizabeth S. Haynes’s two daughters,
Hope Manchester Wheeler and Muriel Sturgis Haynes, or their issue. Paragraph 1
provides:
During the continuance of the trust to pay the net income thereof as
often as quarterly to Hope Manchester Wheeler and
Muriel Sturgis Haynes in equal shares during their lives, and on the
death of either of them who shall leave issue surviving her the share
of said income which she would have received shall be paid to such of
her issue by right of representation as shall from time to time be living
at the respective times of payment and on the death of either of them
leaving no issue surviving her as well as in the case of the issue of one
of them becoming extinct, the whole of said income shall be paid to
the other if living, or if she be dead to such of her issue by right of
representation as shall from time to time be living at the respective
times of payment.
(Emphasis added.) Thus, upon the death of either of Elizabeth S. Haynes’s
daughters, the deceased daughter’s share of the income would be paid to her
“issue.”
[¶3] The death of Hope Manchester Wheeler in 1955 triggered the need to
determine to whom her share of the income should be paid. Through the
presentation of a bill in equity to the Supreme Judicial Court, Fiduciary petitioned
for the Court to determine whether the income should be paid only to Hope
Manchester Wheeler’s biological son, Manchester H. Wheeler, or whether the
income should be shared with Hope Manchester Wheeler’s adopted child, Hope
3
Wheeler Brown.1 Fiduciary Trust Co. v. Brown, 152 Me. 360, 361, 364,
131 A.2d 191 (1957). Fiduciary also asked that we make the same determination
about where the income Muriel S. Haynes was receiving should be directed after
her death, because Muriel had no biological children but did have two adopted
children, Letitia Haynes and Honora Haynes. Id. at 364. We reviewed the trust as
a whole and concluded that, by using the word “issue,” the settlor, Elizabeth
S. Haynes, intended that the trust’s income distributions be made only to children
born to her daughters, thereby excluding Hope Manchester Wheeler’s adopted
child.2 Id. at 378-79. We noted, however, that because Muriel was alive at the
time of the decision, the contingency necessary to implicate a question concerning
the redirection of her share of the income distribution had not arisen. Id. at 370.
[¶4] Although paragraph 1 controls the distribution of trust income,
paragraph 2—which is at issue here—governs the distribution of principal upon
1
Fiduciary Trust Co. v. Brown, 152 Me. 360, 361, 131 A.2d 191 (1957), was presented to the
Supreme Judicial Court sitting in original jurisdiction through a bill in equity. At the time of the Court’s
decision in Brown, the Superior Court and the Supreme Judicial Court shared concurrent original
jurisdiction over equitable matters. See id. at 367 (“[T]he Supreme Judicial Court has authority to pass
upon the questions raised by the presentation of a bill in equity seeking the construction and interpretation
of the provisions of a trust indenture.” (quotation marks omitted)); Choate v. Adams, 387 A.2d 227, 228
(Me. 1978) (“A ‘bill in equity’ could only be commenced either in the Superior Court or in the Supreme
Judicial Court, which at that time shared concurrent original jurisdiction in all cases and proceedings in
equity.”); Gerrish v. Lovell, 146 Me. 92, 96, 77 A.2d 593 (1951) (“[T]here remains in the
Supreme Judicial Court jurisdiction and power to hold nisi prius sessions when occasion requires in
matters over which that court now has original jurisdiction.”).
2
Hope Manchester Wheeler adopted her grandchild, Hope Wheeler Brown. Brown, 152 Me. at 362,
131 A.2d 191. We noted, however, “[t]hat in this particular case, Hope Wheeler Brown happens to be a
blood descendant of the settlor is of no consequence as to the real issue before us for determination.” Id.
at 378.
4
the trust’s termination. Paragraph 2 provides, in pertinent part, “[t]wenty-one
years after the death of the survivor of [Elizabeth S. Haynes’s two daughters] and
of Manchester Haynes Wheeler [Sr.] the principal . . . shall be paid over to the
persons . . . to whom and in which it would then have been distributed under the
intestate laws of Maine then in force . . . .”3 (Emphasis added.) Unlike
paragraph 1, paragraph 2 does not rely on the word “issue”; instead, it defers to
state intestacy laws to determine beneficiaries at the time of termination.
[¶5] The trust terminated on December 26, 2013. On February 21, 2014,
Fiduciary filed a complaint in the Kennebec County Probate Court asking that
court to determine whether adopted children are entitled to a share of the principal
pursuant to paragraph 2. The case was subsequently removed to the
Superior Court. On September 29, 2014, Fiduciary moved for a summary
judgment on the ground that paragraph 2 invokes Maine intestacy laws applicable
at the time of the termination, and 2013 Maine intestacy laws provided (and still
provide) that adopted children inherit from or through their adoptive parents just as
biological children inherit from or through their biological parents.
3
Paragraph 2 provides in full:
Twenty-one years after the death of the survivor of them and of
Manchester Haynes Wheeler the principal of the fund whether said Elizabeth S. Haynes
be then living or not shall be paid over to the persons and in the proportions to whom and
in which it would then have been distributed under the intestate laws of Maine then in
force if it had then been personal property and said Elizabeth S. Haynes had then owned
it in her own right and had then died intestate.
5
See 18-A M.R.S. § 2-109(1) (2013) (“An adopted person is the child of an
adopting parent . . . .”).
[¶6] Thus, pursuant to Fiduciary’s proposed distribution scheme,
Honora Haynes, the only living adopted child of Muriel S. Haynes and the only
living person in her generation, would receive one-third of the trust principal.
Wheeler, the biological great grandson of the settlor,4 objected to this distribution,
contending that our 1957 decision in Brown, through the doctrine of res judicata,
precluded the trial court from applying 2013 Maine intestacy laws because it had
already been determined that Elizabeth S. Haynes did not intend to benefit adopted
children. On February 27, 2015, the Superior Court granted Fiduciary’s motion for
summary judgment, reasoning that res judicata did not prevent it from applying
paragraph 2 of the trust because Brown only controlled paragraph 1. Wheeler
appealed.
II. DISCUSSION
[¶7] Wheeler contends that the court erred in entering a summary judgment
in favor of Fiduciary because both the claim- and issue-preclusion prongs of the
res judicata doctrine prevented the Superior Court from applying paragraph 2 of
the trust.
4
Wheeler is also the grandson of Hope Manchester Wheeler.
6
[¶8] “We review the grant of a motion for summary judgment de novo,
viewing the evidence in the light most favorable to the party against whom the
summary judgment has been granted in order to determine if there is a genuine
issue of material fact.” Brady v. Cumberland Cty., 2015 ME 143, ¶ 10,
126 A.3d 1145 (quotation marks omitted).
[¶9] “The intent of the settlor, as determined by unambiguous language in
the will, is a question of law that we review de novo.” White v. Fleet Bank of Me.,
2005 ME 72, ¶ 19, 875 A.2d 680. “The settlor’s intent is gathered from the whole
will.” In re Pike Family Trusts, 2012 ME 8, ¶ 7, 38 A.3d 329 (quotation marks
omitted). “A court must interpret the will within the four corners of the document
but may use the context of the entire will to interpret specific sections.” Id.
(quotation marks omitted).
[¶10] The two branches of the res judicata doctrine are claim preclusion and
issue preclusion. In re M.M., 2014 ME 15, ¶ 15, 86 A.3d 622. Claim preclusion
prevents “the relitigation of claims if: (1) the same parties or their privies are
involved in both actions; (2) a valid final judgment was entered in the prior action;
and (3) the matters presented for decision in the second action were, or might have
been, litigated in the first action.” Id. (quotation marks omitted). Issue preclusion,
also known as collateral estoppel, “prevents the relitigation of factual issues
already decided if the identical issue was determined by a prior final judgment, and
7
the party estopped had a fair opportunity and incentive to litigate the issue in a
prior proceeding.” Portland Water Dist. v. Town of Standish, 2008 ME 23, ¶ 9,
940 A.2d 1097 (quotation marks omitted). We address the applicability of claim
preclusion and issue preclusion in turn.
[¶11] There is no dispute that the first and second elements of claim
preclusion are satisfied here because Brown resulted in a final judgment involving
Fiduciary and the privies of Wheeler. The controversy, therefore, is whether the
meaning of paragraph 2 was, or might have been, litigated in Brown, and whether
our decision in that case resolved that issue.
[¶12] In Brown, we determined that “[t]he word ‘issue’ as used in wills and
in trust indentures is an ambiguous term [because] [i]t has been given various
interpretations by different courts depending upon existing statutes and varying
circumstances.” Brown, 152 Me. at 371, 131 A.2d 191. To determine the settlor’s
intent underlying paragraph 1, we reviewed the entire trust, including
paragraphs 1, 2, and 7, and the 1918 amendment to the trust. Id. at 370-71
(“Intention must be found in the language of the will read as a whole illumined in
cases of doubt by the light of circumstances surrounding its execution.”) (quotation
marks omitted).
8
[¶13] Although paragraph 2 was mentioned in Brown, the construction of
that paragraph was outside the scope of our ultimate holding. We made clear that
our decision addressed only the meaning of “issue” in paragraph 1, stating,
This conclusion is limited to a determination that Hope Wheeler
Brown is not the “issue” of her adoptive mother, within the meaning
and intent of the trust indenture we are asked to construe and interpret,
and has no bearing or effect on any of the rights of [the adopted
daughter] as a lineal descendant by blood of [the settlor].
Id. at 379. Indeed, we refused to resolve any other questions based on
contingencies that had not yet occurred, saying,
While this court may have the power to answer questions of
construction of a will or trust indenture before a contingency occurs,
we prefer to abide by the rule . . . [that] we do not think it wise . . . to
advise trustees, and to construe wills for their guidance until the time
comes when they need instructions. The fact that the question may
arise sometime in the future is ordinarily not enough. Such a question
should not be decided until the anticipated contingency arises, or at
least until it is about to arise, until it is imminent.
Id. at 370 (citations omitted) (quotation marks omitted).
[¶14] Paragraph 2 was necessarily outside the scope of our holding because
the contingency necessary for paragraph 2 to apply is the termination of the trust,
and that did not occur until more than fifty years after our decision in Brown.
Because paragraph 2 involves intestacy laws that would be in effect at the time of
termination, and because the time of termination was unknowable at the time of
9
our decision in Brown, we did not construe—and could not have construed—
paragraph 2. Claim preclusion, therefore, is inapplicable.
[¶15] Wheeler also argues that issue preclusion applies here because
“[w]hether the [s]ettlor intended to benefit just her biological descendants or
whether she intended to benefit both biological and adopted descendants also is,
once again, the principal issue in the instant case.” This argument is also not
persuasive because the determination of a settlor’s intent is a question of law,
whereas issue preclusion is predicated on the determination of factual issues. See
Portland Water Dist., 2008 ME 23, ¶ 9, 940 A.2d 1097 (“Issue preclusion, or
collateral estoppel, prevents the relitigation of factual issues already decided . . . .”
(quotation marks omitted)); White, 2005 ME 72, ¶ 19, 875 A.2d 680 (“The intent
of the settlor, as determined by unambiguous language in the will, is a question of
law . . . .”).
[¶16] Wheeler’s argument that we should review paragraph 2 through the
lens of our 1957 decision (i.e., that the settlor’s intent was to exclude adopted
children from the periodic net income payments from the trust) would require us to
(1) examine intent regarding language that is unambiguous on its face; and
(2) assume that the settlor did not wish for adopted children to share in the ultimate
distribution of trust principal. Neither requirement is supported by law. By
referring to and relying on future intestacy laws, rather than using the word
10
“issue,” paragraph 2 is unambiguous. The provision that “the principal . . . shall be
paid over to the persons . . . to whom and in which it would then have been
distributed under the intestate laws of Maine then in force” clearly provides that
the intestacy laws in effect at the time of termination govern the distribution of
trust principal. The 2013 Maine intestacy laws effective at the time of the trust’s
termination unequivocally provided that adopted children inherit from or through
their adoptive parents just as biological children do. See 18-A M.R.S. § 2-109(1)
(“An adopted person is the child of an adopting parent . . . .”). We have no basis to
question the intention of the settlor of a trust where, as here, the terms are
unambiguous.
[¶17] The Superior Court correctly entered a summary judgment in favor of
Fiduciary because (1) res judicata does not preclude the application of paragraph 2
and (2) no genuine issue of material fact exists with regard to the unambiguous
terms of paragraph 2.
The entry is:
Judgment affirmed.
On the briefs:
Michael L. Rair, Esq., Law Offices of Michael L. Rair, Bangor,
R. Howard Lake, Esq., Lake & Denison, Winthrop, and John E.
11
Nale, Esq., Nale Law Offices, Waterville, for appellant
Manchester H. Wheeler Jr.
Brendan P. Reilly, Esq., and Tudor N. Goldsmith, Esq. Jensen
Baird Gardner & Henry, Portland, for appellee Honora Haynes
At oral argument:
Michael L. Rair, Esq., for appellant Manchester H. Wheeler Jr.
Brendan P. Reilly, Esq., for appellee Honora Haynes
Kennebec County Superior Court docket number CV-2014-64
FOR CLERK REFERENCE ONLY