in Re Albert H Callahan & Eileen Callahan Revocable Living Trust
334816
| Mich. Ct. App. | Dec 26, 2017Background
- Albert and Eileen Callahan owned a Germantown, Tennessee property held in their revocable living trust; Albert died in 2011, rendering the trust irrevocable as to certain provisions.
- The trust directs that after both settlors’ deaths the Germantown property be sold and proceeds split 50/50 between children Diane and Douglas, unless "tax savings or practical reasons" justify first deeding the property to Diane and Douglas as tenants in common.
- In 2010 Diane loaned the parents ~$141,000; a deed of trust securing that debt included a due-on-sale clause.
- In 2015 Eileen executed a quitclaim deed purporting to convey life estates and a joint tenancy interest to Douglas and Diane; Diane threatened foreclosure under the due-on-sale clause but then cancelled foreclosure.
- Diane petitioned the probate court to void the 2015 deed and reconvey the Germantown property to the trust; the probate court granted summary disposition for Diane, ordered the property returned to the trust, and assessed 3/4 of Diane’s attorney fees against Douglas.
- Eileen (through Douglas as counsel) appealed; Eileen later withdrew her appeal. Douglas remained as appellant; the Court of Appeals affirmed the probate court.
Issues
| Issue | Plaintiff's Argument (Douglas/Eileen) | Defendant's Argument (Diane) | Held |
|---|---|---|---|
| Whether 12 U.S.C. § 1701j-3(d)(6) prevented enforcement of the due-on-sale clause | §1701j-3(d)(6) protects transfers to children, so due-on-sale could not be enforced | Court never needed to decide because Diane cancelled foreclosure | Court: Not reached; no error in probate court on this point |
| Authority to assess attorney fees against Douglas under MCR 2.114 | Douglas argued trial court lacked authority to sanction him personally | Diane sought sanctions under MCR 2.114 for filings not grounded in fact or law | Court: Sanctions under MCR 2.114 were properly imposed; Douglas offered no persuasive challenge |
| Whether Article VIII "practical reasons" clause authorized the 2015 quitclaim deed | 2015 deed was allowed because Article VIII permits deeding property to Diane and Douglas if practical reasons exist | Article VIII applies only after death of both settlors and requires tenancy in common, not the life estates/joint tenancy in the 2015 deed | Court: Article VIII did not authorize the 2015 deed; deed invalid because settlor Eileen was alive and deed form violated tenants-in-common requirement |
| Whether summary disposition (MCR 2.116(C)(10)) and denial of jury trial were improper given factual disputes | Douglas asserted verbal denials and an unsigned, nonnotarized document raised factual issues and that discovery was incomplete | Diane produced documentary evidence; burden shifted to Eileen/Douglas to present admissible evidence creating a genuine issue; unsigned document was unsworn and insufficient | Court: Summary disposition proper; unsworn document not an affidavit; no showing further discovery would change outcome; no jury right violated |
Key Cases Cited
- Federated Ins Co v Oakland Co Road Comm, 475 Mich 286 (standing/aggrievement standard on appeal)
- Matthew R. Abel, PC v Grossman Investments Co, 302 Mich App 232 (attorney may have pecuniary interest to appeal fee orders)
- Edge v Edge, 299 Mich App 121 (abuse of discretion standard for attorney fees)
- Haliw v City of Sterling Heights, 471 Mich 700 (general rule each party bears own fees unless rule/statute authorizes)
- In re Estate of Stan, 301 Mich App 435 (de novo review of trust interpretation)
- Bill & Dena Brown Trust v Garcia, 312 Mich App 684 (rules for ascertaining settlor’s intent and construing trusts)
- Hoffner v Lanctoe, 492 Mich 450 (MCR 2.116(C)(10) tests factual sufficiency)
- Maiden v Rozwood, 461 Mich 109 (evidence to be viewed in light most favorable to nonmoving party on C(10))
- Quinto v Cross & Peters Co, 451 Mich 358 (burden on nonmoving party to produce documentary evidence to avoid C(10) judgment)
- Holmes v Mich Capital Med Ctr, 242 Mich App 703 (requirements for valid affidavit)
- Rataj v City Romulus, 306 Mich App 735 (unsworn, nonnotarized statements are not affidavits)
- Village of Dimondale v Grable, 240 Mich App 553 (summary disposition before discovery is acceptable when further discovery unlikely to produce needed facts)
- Bellows v Delaware McDonald’s Corp, 206 Mich App 555 (party opposing summary disposition must show discovery would uncover material facts)
- Wiley v Henry Ford Cottage Hosp, 257 Mich App 488 (appellate briefs must develop and support arguments)