IN RE: THE ROBERT AND IRENE REDLAND FAMILY TRUST, dated August 10, 1989, and the MARITAL TRUST FOR THE BENEFIT OF THE SURVIVOR OF ROBERT REDLAND AND IRENE REDLAND, ROLLY REDLAND, individually and as Trustee, Appellant (Defendant)
ROBERT REDLAND, individually and as former Trustee, and LISA KIMSEY, as Trustee and individually, Appellees (Plaintiffs). IN RE: THE ROBERT AND IRENE REDLAND FAMILY TRUST, dated August 10, 1989, and the MARITAL TRUST FOR THE BENEFIT OF THE SURVIVOR OF ROBERT REDLAND AND IRENE REDLAND, KENDRICK REDLAND, ROALENE REDLAND-MCCARTHY, and TERESA SHELTON, individually, Appellants (Defendants),
ROBERT REDLAND, individually and as former Trustee, and LISA KIMSEY, as Trustee and individually, Appellees (Plaintiffs). IN RE: THE ROBERT AND IRENE REDLAND FAMILY TRUST, dated August 10, 1989, and the MARITAL TRUST FOR THE BENEFIT OF THE SURVIVOR OF ROBERT REDLAND AND IRENE REDLAND, LISA KIMSEY, as Trustee and individually, Appellant (Plaintiff),
ROLLY REDLAND, individually and as Trustee; KENDRICK REDLAND, ROALENE REDLAND-MCCARTHY, and TERESA SHELTON, individually, Appellees (Defendants).
from the District Court of Washakie County The Honorable
Robert E. Skar, Judge
Representing Rolly and Kendrick Redland, Roalene
Redland-McCarthy, and Teresa Shelton: Steve Aron, Aron and
Henning, LLP, Laramie, Wyoming; S. Joseph Darrah, Darrah Law
Office, P.C., Powell, Wyoming. Argument by Mr. Aron.
Representing Robert Redland and Lisa Kimsey: Scott W. Meier
& M. Greg Weisz, Pence and MacMillan, LLC., Cheyenne,
Wyoming. Argument by Mr. Meier.
DAVIS, C.J., and BURKE [*] , FOX, BOOMGAARDEN, and HILL (RET.)
These consolidated appeals involve the ongoing disputes with
the Redland family's irrevocable trust. Appeals S-18-0091
and S-18-0092 relate to Rolly Redland's counterclaim to
remove his sister, Lisa Kimsey, as co-trustee for allegedly
breaching her fiduciary duties and interfering with trust
administration. Appeal S-18-0093 concerns Ms. Kimsey's
request to terminate the trust because she claims it is
invalid and otherwise fails to achieve the settlors'
intended purposes. After a five-day trial, the district court
decided not to remove Ms. Kimsey as co-trustee or terminate
the trust. Finding no error, we affirm.
We state the issues as:
I. Did the district court err when it did not terminate the
A. Does res judicata bar Lisa's claim that the trust is
B. Does the trust fail to achieve any material purpose?
the district court err when it retained Lisa Kimsey as
We detailed the history of the Redland family's trust in
Redland v. Redland, 2012 WY 148, 288 P.3d 1173 (Wyo.
2012) (Redland I) and Redland v. Redland,
2015 WY 31, 346 P.3d 857 (Wyo. 2015) (Redland II).
We restate it here to the extent necessary to put the current
appellate issues into context.
Robert Redland (Robert) and his wife, Irene Redland (Irene),
created the Robert Redland and Irene Redland Family Trust
dated August 10, 1989 (Redland Family Trust) to hold and
manage ranch properties acquired from Robert's father and
brother, along with the family's future ranch property
acquisitions. Redland I, ¶ 21, 288 P.3d at
1180. Robert, Irene, and their five children each made
contributions to acquire the trust property; each were named
as beneficial owners; and, Robert and Irene served as the
original trustees. Id. In 1995, Robert, Irene, Lisa,
Kendrick, and Roalene amended the Redland Family Trust to:
provide for the appointment of a successor trustee; require
two trustees to serve at all times; create a marital trust
for the survivor of Robert or Irene; and revise the buyout
provision, inter alia (1995
Amendment). Irene passed away in 2007 and, pursuant to
the 1995 Amendment, the beneficiaries appointed Rolly as
co-trustee. Id. ¶¶ 36, 38, 288 P.3d at
Thereafter, a dispute arose between Robert and four of his
children about Robert's failure to convey additional
lands into the Redland Family Trust and about lease
agreements Robert executed without approval of his
co-trustee. Redland I, ¶¶ 35-39, 288 P.3d
at 1182-83. Contentious litigation involving all the
beneficial owners ensued with the parties asserting several
causes of action. Id. ¶¶ 39-40, 288 P.3d
at 1183. Among those claims, Rolly sought to recover
additional trust lands and Robert sought to invalidate the
trust for violating the rule against perpetuities.
Id. ¶¶ 39-41, 288 P.3d at 1183. The
district court entered partial summary judgment, concluding
the statute of limitations and statute of frauds barred
Rolly's claim to recover property, and held a lengthy
trial on the parties' remaining claims. Id.
¶¶ 41, 44, 181, 288 P.3d at 1183-84, 1214. While
the matter was under advisement, the parties filed a
stipulation resolving several of their disputed claims (2010
Stipulation). Id. ¶ 44, 288 P.3d at 1184.
Pertinent to this appeal, the 2010 Stipulation requested that
the court approve a trust amendment requiring the appointment
of a third (tie-breaker) trustee in the event the court
determined the trust was valid. Id. The district
court approved the amendment after ruling the trust did not
violate the rule against perpetuities. Id.
¶ 45, 288 P.3d at 1184.
The parties appealed several of the district court's
rulings but did not further challenge the trust's
validity. Redland I, ¶¶ 4-6, 288 P.3d at
1177-78. In Redland I, we reversed the district
court's summary judgment order barring the recovery of
additional property and remanded the matter for trial.
Id. ¶ 181, 288 P.3d at 1214. Thereafter, the
district court ordered Robert to immediately transfer the
disputed property to the Redland Family Trust, except it
allowed the Manderson Place (Robert's residential parcel)
to be transferred on his death. Redland II, ¶
2, 346 P.3d at 859. Robert appealed. In Redland II,
we affirmed the district court's decision on the merits,
but we remanded the matter for an order immediately
transferring the Manderson Place to the Redland Family Trust,
subject to Robert's life estate. Id.
¶¶ 68-69, 346 P.3d at 880.
On February 13, 2013, while the second appeal was pending,
Robert filed a complaint against the other co-trustees, Rolly
and Larry Heiser (the present litigation). In his complaint,
Robert requested temporary and permanent injunctions to
preclude Mr. Heiser from acting as the third co-trustee and
to prohibit further trustee meetings pending further order of
the court. Robert also requested a declaratory judgment that
the Redland Family Trust is dysfunctional, or alternatively,
that the beneficiaries select a new trustee to replace Mr.
Heiser. Rolly filed a counterclaim to remove
Robert as co-trustee.
Robert resigned as co-trustee in September 2013, appointed
Lisa as his successor, and added Lisa as a co-plaintiff in
the litigation. Lisa moved to terminate the trust,
claiming it was impossible to administer due to dysfunction
caused by the two factions within the family-Robert and Lisa
on one side, and the remaining Redland children on the other.
Lisa further argued the trust could no longer achieve its
purposes because the family members could not work together,
and the family could not obtain preferential tax treatment
for a business trust. Rolly opposed the motion, asserting res
judicata barred Lisa's claim because the district court
previously determined the trust, as amended, was valid. The
district court reserved Lisa's motion for trial.
Later in the proceedings, Rolly moved to dismiss the
complaint as moot; the district court partially granted
Rolly's motion. With the court's permission, Robert
and Lisa filed an amended complaint on May 6, 2015, which named
the other beneficial owners as defendants and asserted the
following causes of action: (1) Dissolution of the Trust,
Injunction,  (3) Declaratory Judgment, (4) Adoption of
Operating Agreement, (5) Appointment of Third Trustee, and
(6) Enforcement of Trust Agreement Provision on Distribution.
Rolly filed a counterclaim seeking Lisa's removal as
co-trustee and attorney's fees and costs. Kendrick,
Roalene, and Teresa answered separately, but did not assert a
counterclaim to remove Lisa.
Prior to trial, Robert moved the court to compel the trustees
to create and distribute funds to a marital trust as required
by the amended trust. After a hearing on Robert's motion,
the district court ordered the trustees to create and fund
the marital trust, provide an accounting to the beneficiaries
and the court from the date of Irene's death through the
present, and provide transcripts of all future trustee
meetings. In compliance with the court's order, Robert
and Lisa filed an accounting on January 4, 2017, along with a
transcript of the most recent trustees' meeting, wherein
Lisa advocated to approve Robert's request for
distributions to the marital trust and reimbursement for
trust expenses Robert personally paid through the years. The
court took no further action on Robert's motion prior to
A five-day bench trial commenced on February 27, 2017. At the
trial's conclusion, the district court requested
additional briefing on the tax issues raised, whether Robert
and Lisa could challenge the validity of the trust
post-Redland I, and whether the Uniform Trust Code
(UTC) or common law governed the trust. The parties complied
and also submitted written closing arguments and extensive
proposed findings of fact and conclusions of law.
The district court issued its decision letter on November 3,
2017. With respect to the issues on appeal, the district
court did not remove Lisa as co-trustee because it determined
Lisa did not violate any fiduciary duties and Rolly failed to
show gross and willful misconduct to justify Lisa's
removal. The district court also did not terminate the
Redland Family Trust, concluding: (1) Lisa's claims that
the trust is invalid should have been raised in the original
trust challenge; (2) "the main and most important reason
for the Trust, i.e., to keep the lands and leases together
for the Redland family, has not been frustrated"
regardless of any adverse tax consequences; (3)
"although progress is slow in light of the positions of
the Trustees, it is functional from an administration
standpoint;" and (4) the trust is not "unlawful,
contrary to public policy, or impossible." The district
court entered an order and judgment incorporating its
decision letter on December 13, 2017. This appeal followed.
After a bench trial, we review "the trial court's
findings of fact for clear error and its conclusions of law
de novo." Shriners Hosps. for Children v. First N.
Bank of Wyoming, 2016 WY 51, ¶ 27, 373 P.3d 392,
403 (Wyo. 2016) (citation omitted). Although the trial
court's factual findings are not entitled to the limited
review afforded a jury verdict, such findings are
presumptively correct subject to our examination of all
properly admissible evidence in the record. Id.
(citation omitted). We do not reweigh disputed evidence and,
instead, give due regard to the trial judge who assessed the
credibility of the witnesses. Id. (citation
omitted). We will not set aside the trial court's
findings of fact absent clear error. Id. (citation
omitted). "A finding is clearly erroneous when, although
there is evidence to support it, the reviewing court on the
entire evidence is left with the definite and firm conviction
that a mistake has been committed." Id.
(citation omitted). In our review, "[w]e assume that the
evidence of the prevailing party below is true and give that
party every reasonable inference that can fairly and
reasonably be drawn from it." Id. (citations
omitted). To the extent a specific issue raised on appeal
implicates additional standards governing our review, we
identify those below.
Did the district court err when it did not terminate the
Lisa claims the trust is invalid and must be terminated
because it is an abusive trust as defined by federal tax
regulations and, further, that the 1995 Amendment is unlawful
because it attempts to modify an irrevocable trust without
the consent of all beneficiaries and court approval. Separate
from her validity challenge, Lisa contends the trust must be
terminated because the trust fails to achieve the
settlors' key material purposes to avoid or minimize
federal inheritance tax to each settlor's estate, as well
as to provide liability protection and include anti-transfer
Validity of the Trust
The district court did not reach the merits of Lisa's
challenge to the trust's validity. On this issue, the
district court ruled:
Robert Redland and Lisa Kimsey challenged the legality and
validity of the 1989 Trust in Redland 1. The Supreme Court
held it to be a valid and binding Trust. Although
they now attack the validity of the Trust on other grounds,
it should have been done at the time of the original
challenge. Each of the beneficial owners have relied
on the efficacy of the Trust, have purchased their share of
the Trust, and some have made other improvements to Trust
added.) The district court's ruling implies it is based
on estoppel principles, though the court did not specify
whether its decision rested on res judicata (also referred to
as "claim preclusion"), collateral estoppel (also
referred to as "issue preclusion"), or judicial
estoppel grounds. Regardless, we may affirm the district
court's decision on any proper ground appearing in the
record. Redland II, ¶ 17, 346 P.3d at 866
(citations omitted). Application of res judicata, collateral
estoppel, or judicial estoppel is a question of law that we
review de novo. Ultra Res., Inc. v. Hartman, 2015 WY
40, ¶ 58, 346 P.3d 880, 900 (Wyo. 2015) (citation
Res judicata bars the relitigation of claims or causes of
action that were or could have been raised in the prior
litigation. See, e.g., Pokorny v. Salas,
2003 WY 159, ¶ 12, 81 P.3d 171, 175 (Wyo. 2003)
(citations omitted); Cermak v. Great W. Cas. Co., 2
P.3d 1047, 1054 (Wyo. 2000) (citations omitted). Res judicata
serves several purposes: to promote judicial economy and
finality, prevent repetitive litigation, avoid inconsistent
results, and increase certainty in judgments. 46 Am. Jur. 2d
Judgments § 444 (Nov. 2018 Update); Tozzi
v. Moffett, 201 ...