In re Beatrice Rottenberg Living Trust
300 Mich. App. 339
| Mich. Ct. App. | 2013Background
- Joan Lipsitz, Mark Rottenberg, and Lisa Friedman are siblings and cotrustees of the ENR Trust; the ranch entities were owned by the ranch entities group and filed for Chapter 11 in 2008.
- Dr. Everett Rottenberg loaned more than $2 million to the ranch entities in the 1990s–early 2000s; some repayments occurred, but many loans remained unpaid.
- Dr. Rottenberg died in 2005 testate; his will and the ENR Trust governed the disposition of his estate and trust assets, with Joan and Mark initially as cotrustees; the BR Trust was established by Mrs. Rottenberg’s will and joint administration of other subtrusts involved Marital and Residuary subtrusts.
- Joan purchased her mother’s stock in the ranch entities in 2005 and agreed to assume liability for the $400,000 Mrs. Rottenberg loan; it is disputed whether any other Dr. Rottenberg loans were gifts to Joan or to the BR/ENR trusts.
- Lauren Underwood became successor trustee of the ENR Trust in 2009; the probate court later permitted a dispute over the ownership of the right to demand repayment of the loans, and Mark sought to surcharge Joan for alleged fiduciary breaches.
- The probate court granted partial summary disposition (April 29, 2010) finding the loans were loans, not gifts, but the order was vacated on appeal and remanded to address proper real-party-in-interest and trust-proceeding issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who may sue for repayment of the loans? | Mark argues he can pursue restitution as a BR Trust beneficiary. | Joan contends the ENR Trust trustee owns the right to demand repayment. | Real party in interest belongs to ENR Trust trustee; Mark lacks proper party status. |
| Whether the right to demand repayment was gifted to Joan and thus belongs to BR Trust | Mark asserts no gift occurred; the right remained with the ENR Trust. | Joan contends she received the right as a gift from Dr. Rottenberg. | Questions about ownership and gift belong in ENR Trust proceedings; not properly in BR Trust proceeding. |
| Whether the BR Trust proceedings were the proper forum for resolving these ownership questions | Mark argues BR Trust can pursue these claims as cotrustee/beneficiary. | These issues pertain to ENR Trust administration. | Issues should be litigated exclusively in ENR Trust proceedings; BR Trust was improper forum. |
Key Cases Cited
- In re Miller Estate, 106 Mich App 222, 307 NW2d 450 (1981) (1981) (finality test for probate orders; case-by-case assessment of finality)
- In re Investigative Subpoena, 258 Mich App 507, 671 NW2d 570 (2003) (2003) (recognizes discretionary appellate review and procedural nuance)
- Guzowski v Detroit Racing Ass’n, Inc., 130 Mich App 322, 343 NW2d 536 (1983) (1983) (finality and appealability considerations in probate matters)
- Rite-Way Refuse Disposal, Inc. v. VanderPloeg, 161 Mich App 274, 409 NW2d 804 (1987) (1987) (real-party-in-interest concepts and prosecution in the proper party)
- Kent v Northern California Regional Office of American Friends Serv Comm, 497 F.2d 1325 (9th Cir. 1974) (1974) (distinction between statutory standing and real-party-in-interest; standing is jurisdictional)
- Lohm? Leite v Dow Chem Co, 439 Mich 920, 487 NW2d 880 (1992) (1992) (real-party-in-interest and standing principles in Michigan)
- In re Lager Estate, 286 Mich App 158, 779 NW2d 310 (2009) (2009) (trust proceedings and jurisdictional scope)
- In re Brown, 229 Mich App 496, 582 NW2d 530 (1998) (1998) (MCR 2.201(B) real party in interest standard)