COA Affirms Trust Settlement Agreement Terms Were Both Unambiguous and Not Breached
Opinion Published July 18, 2024 (Jansen, P.J., and Redford and D.H. Sawyer, JJ.).
Docket No. 366180
Emmett County Probate Court
Holding: The trial court did not err in determining 1) the terms of the settlement agreement were unambiguous, and 2) the terms of the settlement agreement were not breached. The Court of Appeals accordingly affirmed.
Facts: Raymond T. Conley, now deceased, was the grantor of the Raymond T. Conley trust. He and his wife, Lois M. Conley, were trustees. Appellants, Wallace Conley and Kathleen Meyers, are siblings of Appellee, Maureen Conley. The trust assigned Maureen as trustee, and Appellants alleged that Maureen breached her duties as trustee. In response, the parties created a settlement agreement, which is the nexus of this litigation. The appellants then received K-1 forms due to Maureen’s alleged settlement agreement breach, and the probate court found the settlement agreement was unambiguous and “that the issuance of the K-1 forms was a ‘natural’ consequence of the implementation of the settlement agreement and, thus, each sibling was responsible for their respective tax consequences arising from the agreement’s implementation.”
Key Appellate Holdings
A provision that provides for the administration of a trust after settlement is complete is complementary, not contradictory, to a provision that sets out parties’ obligations associated with effectuating the settlement agreement.
Where the language of the contract is clear and unambiguous, it is to be construed according to its plain sense and meaning. The parties’ settlement agreement had two separate provisions. One provided for administration of the trust after settlement, and the other dealt with the obligations of settlement. These two provisions can unambiguously, simultaneously exist.
“Capital gain was a natural result of implementing the settlement agreement, and the parties were responsible for their respective obligations associated with the settlement.”
The trust set out monetary values for Wallace and Kathleen and the grantor’s home for Maureen. The conveyance of the home to Maureen was necessary for Wallace and Kathleen to receive their monetary distributions. The conveyance resulted in capital gains tax. Because the parties were responsible for their respective obligations under the settlement agreement, Maureen did not breach the settlement agreement.
