Peterson v. Peck
2013 Ark. App. 666
| Ark. Ct. App. | 2013Background
- Alexander Calder mobile (“Autumn Leaves”) was acquired by Peterson’s grandparents and came into Robert Peck’s possession; Peck died in 2006 married to Hannah Peck.
- Robert Peck executed revocable family trusts in May and June 2001, a Declaration of Trust Ownership (conveying tangible personal property to the trust), and later amended/restated the trust in Jan. 2005 and executed a will leaving artwork to Hannah if she survived him.
- Peterson (daughter) sued after Hannah (widow/trustee) sold the Calder for $3.7 million, claiming ownership by (1) inter vivos gift from Robert or (2) disposition under the June 15, 2001 trust via a 2004 letter; she also sought accounting and damages for alleged mismanagement by Hannah.
- Trial court found no valid inter vivos gift, no effective transfer under the trust, and that Peterson triggered the trust’s share-cancellation (no-contest) clause by challenging the trustee’s actions, forfeiting her beneficiary interest and standing.
- Circuit court also found no bad faith or reckless indifference by Hannah in administering the trust; Peterson was ordered to pay attorney’s fees on remand but did not contest that award on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Robert Peck made a valid inter vivos gift of the Calder to Peterson | Peterson: April 2001 letter and conversations show present intent to give Calder to Peterson | Hannah: Peck retained possession and display rights; no delivery or unconditional relinquishment of dominion | Court: No — gift elements not met (no present/final intent and no unconditional release of control) |
| Whether the Calder passed to Peterson under the June 15, 2001 trust via the July 2004 letter | Peterson: July 2004 letter postdates trust and designates Calder to Peterson under trust §3.3 authority to dispose of tangible personalty by written list | Hannah: Letter was not attached to or expressly associated with the June 15, 2001 trust; prior documents and trust terms control | Court: No need to decide definitively given other holdings, but circuit court found letter was not attached/referenced to the June 15 trust and did not effect transfer to Peterson |
| Whether Peterson forfeited her beneficiary interest by filing suit that questions trustee’s actions (share-cancellation/no-contest clause) | Peterson: Suit did not attack validity of the trust; challenging trustee's acts should not trigger forfeiture | Hannah: Trust expressly cancels shares if a child questions trustee’s actions; Peterson’s complaint alleged improper accounting, personal use of trust funds, and Ponzi losses | Court: Yes — trust’s share-cancellation provision was triggered because the complaint questioned trustee actions; Peterson forfeited her interest and lacked standing to claim trust assets |
Key Cases Cited
- O’Fallon v. O’Fallon, 341 Ark. 138 (describing elements required for valid inter vivos gift)
- Chalmers v. Chalmers, 327 Ark. 141 (delivery rule relaxed among family but delivery still required)
- Carlson v. Carlson, 224 Ark. 284 (constructive delivery recognized)
- Gross v. Hoback, 187 Ark. 20 (constructive delivery precedent)
- Bellis v. Bellis, 75 Ark. App. 213 (distinguishes donor vs. donee retention of possession in family gifts)
- Gruen v. Gruen, 496 N.E.2d 869 (New York case on present gift with retained life use; not followed under Arkansas law)
- Jackson v. Braden, 290 Ark. 117 (no-contest clauses and their interpretation)
- Seymour v. Biehslich, 371 Ark. 359 (recognition and treatment of no-contest clauses)