Rex v. Rex

Citation: 2016 Ohio 5788Docket: 2016 CA 00088

Court: Ohio Court of Appeals; September 12, 2016; Ohio; State Appellate Court

Original Court Document: View Document

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Thomas Rex appealed the Stark County Probate Court's decision granting Colleen Rex's Motion for Summary Judgment and awarding her attorney fees. The case revolves around The Rex Family Revocable Intervivos Trust, established by Dominick T. Rex and Colleen E. Rex on October 13, 1997. The Trust was designed to manage property solely for the benefit of both Settlors, identified as 'Beneficiaries'. Dominick Rex transferred a specific real estate property into the Trust via a Quit-Claim Deed on October 23, 1997, with no other properties included.

The Trust's provisions allowed the Settlors to revoke or amend the Trust through mutual consent while both were alive and competent. Upon the death or judicial incompetence of one Settlor, the surviving Settlor could exercise these rights individually. Article V outlines the disposition of the Trust estate upon the death of either Settlor, granting Colleen Rex the right to reside in the trust property for as long as she wishes. Upon her departure, the property would be sold, with 60% of the proceeds allocated to her and 40% to Ricardo F. Rex or his descendants. After both Settlors' deaths, remaining Trust assets would be distributed to Ricardo F. Rex or his descendants.

On December 16, 1999, Dominick and Colleen Rex amended the Rex Family Revocable Trust, specifically altering Article VI regarding the disposition of trust assets upon the death of either settlor. The amendment granted the surviving beneficiary the use and enjoyment of all trust property at the Trustee's discretion, with the trust terminating upon the death of the surviving beneficiary. Upon termination, assets would be distributed to the issue of the Settlors per stirpes, with provisions for any minor beneficiaries until they reach twenty-one.

On May 26, 2005, a second amendment revised Article V, outlining the distribution of Dominick T. Rex's personal property upon his death. It specified that firearms and certain items would go to Thomas and Frederick Rex, while Colleen E. Rex could select remaining items from the trust property. Colleen would have the right to reside in the trust real property until her death, and upon her departure, the Trustee would sell the property. Proceeds would go to distribute $5,000 each to grandchildren Eric Rex and Jamie Ferretti, with remaining funds used to purchase a condominium for Colleen. After her death, the condominium would be transferred to Thomas and Frederick Rex, with specific provisions for distribution if either predeceased Dominick. Additionally, if Colleen required nursing home care, the condominium would be sold to cover her expenses.

The second amendment also appointed the surviving settlor as Successor Trustee upon the death, resignation, or incompetence of either settlor, granting them the same rights and powers as the original Trustee.

Dominick T. Rex passed away on May 6, 2013. On May 1, 2014, Colleen E. Rex executed a Third Amendment to their Trust, revoking prior amendments and stating that upon the death of either Settlor, the surviving Settlor would receive all remaining trust assets, leading to the Trust's termination. On May 19, 2014, Colleen Rex filed an Affidavit of Successor Trustee, identifying herself as the current trustee and noting the Trust's ownership of real property in North Canton, Ohio. Subsequently, on May 20, 2014, she transferred ownership of the property to Philip and Rachael Chiarappa via a Survivorship Deed.

On June 10, 2015, Thomas Rex filed a Complaint in Stark County Probate Court, questioning his status as a beneficiary of the Trust and Colleen's authority to terminate it post-Dominick's death. Colleen Rex responded and filed for Summary Judgment on July 13, 2015, to which Thomas Rex replied on July 27. A non-oral hearing occurred on October 15, 2015, and on November 2, 2015, the court granted Colleen's Motion for Summary Judgment, affirming her authority to terminate the Trust after Dominick's death and awarding her attorney fees and costs.

Thomas Rex's subsequent appeal was dismissed due to the lack of a final appealable order. An evidentiary hearing on attorney fees was held on December 2, 2015, resulting in a Judgment Entry on April 1, 2016, awarding Colleen $8,939.08 in attorney fees. In his appeal, Thomas Rex raised three Assignments of Error, arguing that the Probate Court incorrectly applied the law regarding the termination of the Trust and the granting of attorney fees. The court determined to address the first two Assignments of Error together, as they were interrelated, ultimately disagreeing with Thomas Rex’s claims regarding the trial court's decisions.

Summary judgment proceedings allow appellate courts to review evidence similarly to trial courts, as established in Smiddy v. The Wedding Party, Inc. Civ.R. 56(C) stipulates that summary judgment is appropriate when the filed evidence shows no genuine issue of material fact, entitling the moving party to judgment as a matter of law. A trial court cannot grant summary judgment if a material fact is genuinely disputed. The moving party must provide a basis for the motion, pinpoint specific evidence demonstrating the absence of a genuine issue, rather than making general assertions. If successful, the burden then shifts to the non-moving party to present specific facts showing a genuine issue exists for trial.

In the case at hand, the Appellant argues that the Probate Court incorrectly applied R.C. 5806.02(B)(2) regarding the Appellee's right to terminate the Rex Trust. R.C. 5806.02 outlines that a settlor may revoke or amend a trust unless it is expressly made irrevocable. If a trust has multiple settlors, specific rules apply concerning revocation and amendment, particularly regarding community property. The original trust was executed in 1997, prior to the effective date of R.C. 5806.02, and even the Second Amendment in 2005 predated this statute. Additionally, R.C. 5801.04 indicates that the terms of a trust take precedence over the provisions of R.C. 5806.02, asserting that the regulations in Chapters 5801 to 5811 govern trustee duties and beneficiary rights unless specified otherwise in the trust document.

The terms of a trust take precedence over provisions in Chapters 5801 to 5811 of the Revised Code, except for specific exceptions. A settlor can retain or grant the power to modify or revoke the trust, and if such power is unrestricted, it includes the ability to revoke or terminate the trust. If a settlor has a restricted power to amend or revoke the trust, it must occur before their death to be valid. The trust in question indicates that the initial contribution, a piece of real estate, was jointly owned by the Settlors, Dominick and Colleen Rex, and its purpose was to benefit them exclusively. The trust explicitly reserves the right for the Settlors to revoke, modify, or terminate the trust with mutual consent while both are competent. Upon the death or incompetence of one Settlor, the remaining Settlor can exercise these rights individually. The court concluded that the trust provisions were clear, granting Colleen Rex the authority to terminate the trust after Dominick Rex's death. The trial court's summary judgment was upheld, rejecting the Appellant’s first and second assignments of error. In the third assignment, the Appellant contested the award of attorney fees to the Appellee under R.C. 5810.04, arguing that since he had no interest in the trust, he should not be liable for fees. The court disagreed, stating that under Ohio law, attorney fees are typically not recoverable unless specified by statute or contract, or if bad faith is demonstrated.

Attorney fees, costs, and expenses were awarded under R.C. 5810.04, which allows courts to grant such awards in trust administration cases. The statute permits courts to require one party to pay another party's costs and fees from the trust involved in the dispute. The official comment on R.C. 5810.04 emphasizes the court's historical authority to award these costs in equitable proceedings and outlines that litigation expenses were traditionally charged against another party only in cases of egregious conduct, such as bad faith or fraud. Additionally, trustees can recover reasonable expenditures incurred while administering the trust.

The review of the award under R.C. 5810.04 is based on an abuse of discretion standard, defined as a decision that is unreasonable, arbitrary, or unconscionable. After reviewing the case, it was determined that the trial court's decision to charge one party's costs against another was well-supported by the statute, and no abuse of discretion was found. Consequently, the Court of Common Pleas' judgment was affirmed.