*1 COLLEGE, BENNETT
Foundation, Inc., and Pace Petitioners,
University, DENVER,
UNITED BANK OF NATION- ASSOCIATION, Ennis,
AL Charles W. Episcopal Cathedral,
St. John’s Dumb League Shelter,
Friends Animal Metro-
politan Opera Guild, Inc., and Marist
College, Respondents.
No. 89SC297. Colorado, Court of
En Banc.
Sept. 1990.
Rehearing Denied Nov.
Ireland, Stapleton, Pascoe, P.C., Pryor & Pascoe, Toal-Rossi, Monte Margaret L. Ostom, Denver, petitioners. Jennifer A. for Davis, Stubbs, Graham & Richard W. Morath, Daily, Denver, K. Susan re- spondents Cathedral, Episcopal St. John’s League Shelter, Dumb Friends Animal Metropolitan Guild, Opera Inc. Appearance, No respondents on behalf of Denver, Ass’n., United Bank of Nat. Ennis, Charles W. and Marist Justice VOLLACK delivered the Opinion Court. Foun-
dation, Inc., (the University and Pace *2 Cathedral, petitioned copal League for review of leges) certiorari Dumb Friends An- Shelter, appeals in and Metropolitan Opera the court of decision United imal Guild (the Charities) argued v. Episcopal Denver John’s that Bennett Bank St. Col- of Cathedral, Nos. lege’s corpus 87CA1050 & 87CA1051 interest trust should the be 23, 1989) (Colo.App. (unpublished March equally among distributed them because Denver, In opinion). United the College longer Bank Bennett existence.2 of appeals Foundation, Inc., (Bennett of affirmed the Denver College court Bennett Foundation), court’s entered summary judgment bate College, and Bennett which against Colleges. granted the certiora- We not received has students since 1977 al- appeals ri to consider whether the court of though the state New has of properly applied the charter, doctrine divested of its school estoppel.1 We affirm. University3 argued and Pace that Bennett
College was still existence at the time of I. death. Collbran’s subsequently A. The Charities filed two mo- judgment against tions for sumpiary Collbran, 1970, Margaret an alumna In Colleges, arguing that were collateral- trust, Bennett established ly estopped judicially estopped the United Bank of Denver as with asserting College that was still in Bennett (the Trustee), providing existence at Collbran’s death. motions upon her death remainder of the pre- summary judgment were based on for equal parts would be “divided into trust following vious New York court cases each of the fol- outright and distributed bankrupt- adjudication College’s at the lowing organizations” in existence cy college’s in which the entitlement Episcopal death: time of her St. John’s unrelated to trust funds the Collbran Cathedral, Animal League Dumb Friends probate granted questioned. Inc., Shelter, Guild, Metropolitan Opera summary judgment, motions Charities’ for Bennett affirmed. appeals and the court May College, an all- In Bennett college, women’s filed for court, adjudicated
federal district which B. bankrupt Bennett October nature of our re- Because limited 1978, the Bennett Col- By March bulk of case, supra in this note view see liquidated assets had and dis- lege’s been only York case we consider the New on bankruptcy estate to creditors. The bursed ap- court of court and in 1984. was closed holding relied in peals February Following death on Collbran’s asserting collaterally estopped from were petitioned the Collbran Trustee still in that Bennett instructions Denver Probate for Court time of death. at the Collbran’s it Ben- or how should distribute on whether 1937, Margaret Gage, a New York corpus. In College’s interest in the Bennett Junior Epis- resident and alumna of Col- probate proceedings, St. John’s In bankruptcy, question granted Bennett filed 3.After 1. We also certiorari applying University, City, appeals erred in New York whether the court of located in Pace judicial estoppel. we Because doctrine of agreed alia inter to assume appeals did not err in that the court conclude obligations, main- loan administration student estoppel, we applying the doctrine records, college’s funds for the raise tain not, not, and do consider whether need Foundation, a Bennett administer judi application of erred its court of fund, college’s lege scholarship permit See, estoppel. e.g., Industrial Comm'n cial university’s operate office to on alumnae County RE No. School Dist. Moffat property. 1987). (Colo. College’s one-quarter interest 2. corpus $7 million. is worth more than
lege, September fund named established beneficiary.4 approved stipu- as its The of New York lation, and, that another charitable bene- referring after to its ficiary could be named the event that decision, “ORDERED, memorandum AD- “[i]n *3 exist, College] to whether AND that Bennett [Bennett cease[s] JUDGED DECREED dissolution, by merger, reason of consolida- College purposes ... has for the of [the Compa- or Trust tion otherwise.” Bankers Gage] „ Trust ceased to exist.” (the Trustee) ny Gage eventually was Gage named the trustee. The Trustee II. stopped disbursing moneys to Ben- trust Colleges argue the court of 1977, September in after the erroneously ap- and bankruptcy May in had filed for in plied estoppel the doctrine of collateral 1977. disagree. this case. We 1979, May Gage In the Trustee initiated proceeding Supreme Court of New estoppel, pre Collateral or issue for, alia, ruling inter that Bennett clusion, relitigation of an issue that bars by had ceased to exist virtue of the (1) prior proceeding at a if: was determined college’s bankruptcy subsequent precluded an is identical to issue assets, Gage sale of its and that the Trust- actually prior proceeding; determined in the longer obligated ee was disburse (2) party against the whom is moneys College. trust Notice sought party privity was a to or was in proceeding was served on Bennett (3) party prior proceeding; with a to a College through college’s presi- last judgment there was a final merits dent, Nystrom, J.W. trust- (4) prior proceeding; (the Bankruptcy ee for Bennett against whom the doctrine is asserted had Trustee), Attorney and the New York Gen- opportunity a full and fair eral.5 prior proceeding. E.g., City issue Trustee, Gage Comm’n, Springs v. Industrial Colorado Trustee, Bankruptcy apparently the (Colo.1988); 749 P.2d Industrial Attorney New York entered into a General County Comm’n School Dist. Moffat Gage which the Trustee (Colo.1987); 732 P.2d RE No. 619-20 $3,668.22 agreed pay to the Jesse, United States v. P.2d 503- represented Trustee.6 The amount the net (Colo.1987). preclu The issue on which moneys payable that were to Bennett Col- actually sion is asserted must have been lege paid but had not been because of the litigated necessarily adjudicated Gage Trustee’s concern over whether the Jesse, prior proceeding. 503. required by college continued to exist as trust. Also A. Supreme Court of New York issued a mem- finding orandum decision that Bennett We first consider whether issue lege permitting had “ceased to exist” and existence that was proceeding other decided in the New York Trustee substitute bene- the Denver ficiaries to the trust accordance identical issue before terms. with the trust’s Probate Court. Although Gage representative named Bennett School and deemed to be the of the state of College's beneficiaries, prede- Bennett Junior New York and charitable trust cessors, beneficiaries, as the trust we refer to proceedings and notice of such trust must be junior college the school as "Bennett Col- attorney general. served on the N.Y.Est. Pow- lege.” dispute that Bennett do 1.1(g)—(h)(McKinney ers & Trusts Law 8— is not in with Bennett School 1967); 1971 N.Y. Laws 2641-42. and Bennett Junior $465,- corpus 6.The trust in 1979 was worth law, New York in certain charitable
5. Under 983.37. proceedings attorney general that another Collbran trust does not define “existence.” disagree. beneficiary could be named We charitable “[i]n College] event that cease[s] [Bennett comparison A of the facts exist, dissolution, whether reason of trust court and the court merger, or otherwise.” In its consolidation ceedings in this case demonstrates that the Voluntary Accounting and “Petition for Supreme issue before the New York Trust,” Construction Deed was identical to the issue before the Den- specifically requested ver Probate Court: or not Bennett whether New York Court determine “for College was existence. The purposes of the administration of said deed’s definition of “exist” did not cause *4 ... ceased to exist [that] proceed- the issue in the York court New 8, August on or about 1977.” ings to be different from the issue before the Denver Probate Court. The deed’s def- upon The that Collbran “dissolution, merger, inition of death the trust would be “divid- Collbran’s “exist” — or consolidation otherwise” —is too broad outright equal parts ed into and distributed differentiate the trust deed’s use organizations are in to the that [named] of “exist” from the instru- Collbran In its existence” at the time of her death. Webster’s ment’s use of “existence.” Ascertaining for Benefi- “Petition Order Cf Dictionary 796 (1986) Third International Trust,” stat- ciaries of the Collbran Trustee (“exist” means “to have actual or real be- requested had distri- ed that the Charities time”). ing” being space or to “have corpus of the trust to the Charities bution only, was not because death. existence at the time of Collbran’s B. also stated in the
The Collbran Trustee argue, The Charities it petition that it was “uncertain” whether held, that court and court of required a one-fourth to distribute privity were in with Bennett Col- because, inter share lege’s bankruptcy during the 1977- trustee alia, Trustee had learned bankruptcy proceedings of the col- 1978 adjudicated had a been agree. lege. We bankrupt, college that the had not conduct- academic ed classes or functioned as an estoppel, purposes For 1977, and that in the who, institution since fall judg rendition of privy is one after the New ment, acquired an interest the sub has that, had found judgment Court ject affected matter Trust, purposes of the parties, as through or under one of the successor, inheritance, had ceased to exist. See purchase. or Co., petition that requested through Murphy v. Northern Grain Colorado 103, determine the bene- 21, 24, Denver Probate Court Colo.App. 488 P.2d 104 30 and instruct the Coll- v. Bank Amer (1971) ficiaries of the trust Bernhard (citing Ass’n, the trust on how to distribute Trust & bran Trustee 19 Cal.2d ica Nat’l Sav. 892, (1942)), cited 807, 810, assets to the beneficiaries. 122 P.2d 894 Waitkus, Pomeroy v. approval with Colleges argue issues 344, 350, (1973). 399 183 Colo. be- proceedings are different two court is considered to re- unique, cause “[e]ach in interest debtor independent- be the successor quires that each be examined during property the bank Colleges argue that and the debtor’s ly.” Specifically, the Moore, J. Lucas & proceeding, IB proceed- ruptcy J. trust court Practice Currier, Moore’s Federal a different issue T. ing must have involved (2d ed.1988) ¶ 419[3.-1], at 634 creating the [hereinafter the document because collect, Practice], Federal Moore’s IB of existence as “dis- trust defined cessation ultimately distribute solution, liquidate, other- merger, consolidation or the creditors. Bank wise,” governing trustee’s estate to and the document 368 ruptcy ch. estoppel judgment Act of 30 Stat. on the merits in —final (1978 Bankruptcy. prior proceeding 557 re be satisfied in [hereinafter Act] —cannot case, 1979),
peal reprint this issue effective 1979 version because the ed, (West College’s actually 11 U.S.C.A.App. 180-81 1979) (current necessarily by the New at 11 101 decided York Su- version U.S.C. §§ (1979 preme trust court Supp.1990)).7 Although 1330 ceedings parties because the reached a under the Act set- a trustee con creditors, tlement. sidered representative many purposes trustee for is deemed to stipulation Under certain circumstances a be in with debtor and stands in questions between to central of fact Cowans, 2 debtor’s shoes. D. Bank questions or a and law of fact (2d ruptcy ed. Law and Practice may a judgment render not “final” as to 1978); Length, By accord In re Ahead A questions, subsequent pro those and in Inc., (Bankr.S.D.N.Y. 100 B.R. ceeding pre should not 1989); Woodruff, see also Heiser v. litigation questions vent the of those unless 853, 857, U.S. 66 S.Ct. L.Ed. parties in original lawsuit intended (1946) (holding that issue of fraud liti questions be settled to future *5 gated bankrupt, between creditor and and (Second) Judg actions. See Restatement litigated bankruptcy between creditor and (1980); 27 1B ments comment e Moore’s § trustee, bankrupt represents “who the and ¶ Federal Practice 0.444[4]. creditors,” bankrupt’s] judicata is res [the case, “stipulated this the fact” doc- litigated and cannot in bank be further inapplicable. trine is Because the trustee ruptcy proceeding); 4 Bank Collier on placed for the in through issue— ¶ (L. 1979) ruptcy n. 2 King 704.02 15th ed. accounting petition its and construction (“Rights arising upon of con action of College’s of deed trust —Bennett exist- debtor, property yet tracts or of the not ence, because of college’s and trustee, suit, pass resolved into to the existence was crucial to trustee’s deci- should assert them [the trustee] how it sion on would disburse the trust proper necessary tribunal whenever for the corpus, Supreme the New York Court could estate.”) preservation collection or of the entering deciding not an avoid order (citing Co., Bowling Milling In re Green issue. 785, F.Supp. (W.D.Ky.1941)).8 36 786 question, then, par- is whether the purposes application For of collat- of proceedings ties to reached eral on the issue of Ben- whether stipulation question a of fact on
nett in existence time was at the College’s existence. We conclude death, Collbran’s we conclude that parties that the did reach such stipu- not Bankruptcy privy was a Supreme lation. New York Court or- parties der indicates that the to the proceedings stipulated only
C. payable owed and amount Bennett Col- argue Colleges lege during period September 6, the third re- 1977, quirement application 14, for the to October Additional 1977.9 evi- States, 5, (D.Ariz.1976), bankruptcy proceedings, F.Supp. aff’d, 7. The Bennett 407 7 585 1977, (9th May governed by Cir.1978), initiated in were F.2d that a states Bankruptcy Bankruptcy "duty represent Act Act. See Reform trustee has a the creditors 1978, 95-598, 403(a), profit § Pub.L. 92 Stat. and to realize the maximum on the bank- (1978). ruptcy estate.” suspended payments 8. To the extent that are relevant to this 9.The to Ben- case, 6, 1977, Colleges September the cases cited are consist- on nett because of recognition Bankruptcy ent with our that the concerns about whether the continued exist, College, privity required. Trustee was with in as the trust deed Ben- bankruptcy, adjudicated bankrupt debtor in trust court on Octo- proceedings. example, For v. United 1977. DePinto ber proceeding, in the first or the procedures had not indicating that the dence itself, substantially question is different stipulation proceeding reached es- par- proceeding from the which collateral existence is that asserted, preceded Dist. toppel see Salida School ties’ Morrison, Supreme New York Court’s R-32-J v. by the Decision,” (Colo.1987); party which whether the “Memorandum proceeding has sufficient incentive part: the first vided relevant position vigorously assert or defend the being Upon foregoing papers there against estop- which collateral application to settle objection, this asserted, id.; the extent to pel is see trustee’s account and for construction identical, are 18 C. which the issues permission to substi- granting petitioner Cooper, Miller & E. Federal Wright, A. beneficiary place and stead of tute as Practice and Procedure § has ceased to (1981). Wright, generally Miller & See exist, organizations one or more ... ... Cooper, supra, granted. ... factors, we can find noth- Applying The New York these (Emphasis supplied). suggesting that the Col- Judgment ing on Intermediate the record court’s “Final opportuni- leges Memoran- denied a full and fair Accounting” incorporated the were “ORDERED, through Decision, ty AD- dum The New York that Bennett Trustee. JUDGED AND DECREED similar, substantially purposes said were College ... has for the argued that the New have Trust ceased to exist.” substantially dif- procedures trial are stipulation does We hold that the 1979 *6 procedures. trial ferent from Colorado’s application of collateral es- prevent $465,000 at stake in the With more than College’s to the issue of Bennett toppel conclude that the Bank- corpus, we existence. Trustee, obligated pre- to ruptcy who was assets, College’s had ade- serve Bennett’s D. in the New York quate incentives to assert Colleges’ argument final is that College. Fi- the existence of Bennett court opportunity deprived of a full and fair were proceed- nally, the issue litigate College’s Bennett existence to in the Collbran trust ings and the issue proceeding.10 disagree. We were identical. stated, Bankruptcy As we have with Bennett Col- Trustee was III. Bankruptcy Trustee is under lege, and the and court that the We hold fiduciary duty preserve to the debtor’s a applied the doctrine of appeals properly Cowans, p. supra 2 D. estate. See Bennett estoppel on the issue of 604; Bankruptcy, on see also Collier College’s existence. n. 2. Thus the issue p. supra 11704.02 Judgment affirmed. whether the we must resolve is opportuni- full fair given was a and dissents, and Justice Justice LOHR College’s Bennett ty to the issue of joins in the dissent. KIRSHBAUM proceeding. existence dissenting: Justice LOHR of whether Factors determinative the distribution This case involves opportunity to given full and fair has been by a trust established pursuant funds the remedies and litigate include whether that, determination of acknowledge, not make a court should 10. We note as College College to exist. with notice that the had ceased Bennett was served whether Bennett Supreme However, issued an order representative Court had personal from New to show cause College, directing Bennett and proceeding show college appeared trust, interested in other appear cause. why cause the court to show before Margaret 1970. Under the The court held that Bennett trust, upon terms of the Collbran’s death collaterally estopped litigating equally remainder was to be divided College’s issue of Bennett following organiza- and distributed to “the litigation, Trust which occurred tions that are in existence at the time of Court, before a New York a trial Episcopal death”: St. John’s [Collbran’s] Cathedral, Margaret Gage court. created a trust with League Dumb Friends Animal College Bennett beneficiary. named as the Shelter, Guild, Inc., Metropolitan Opera pertinent part: Trust and Bennett Collbran’s alma ma- In the event the beneficiary herein- ter. above any named shall at time cease to exist,
On October College dissolution, Bennett whether reason of adjudicated bankrupt. During the sev- merger, otherwise, consolidation or I re- followed, eral months that most of Bennett lifetime, myself during my serve to and College’s liquidated assets were my decease, my trustees after proceeds distributed to its creditors. Pace right privilege substituting University subsequently many assumed beneficiary in place and stead of the administrative obli- named, beneficiary hereinabove one or gations, including administering student charitable, religious, more eleemosynary, funds, scholarship loans and maintaining organizations educational or benevolent College raising records and funds wholly or institutions charitable in nature for the Bennett Foundation. Pace purpose operated profit. and not accepted all of the Bennett stu- May 1979, trustee of the many faculty dents and hired Trust filed in Supreme an action Court of formerly staff employed by Bennett. Pace York, seeking ruling New that Bennett also allowed Bennett’s alumnae office to exist, College had ceased to that the trust- operate grounds. on its The Bennett Col- disbursing ee need not continue trust funds lege relinquished charter was never or re- College and that the trustee voked, and in 1986 Bennett could beneficiary substitute a new for Ben- University Pace formally were consolidated The trial court issued an by the Regents. New York State Board of order why to show cause February Collbran died on 1986. The *7 2, 1979, had not ceased to exist. On petitioned the Denver Probate the trial court issued a opin- memorandum Court for regarding instructions Bennett granting ion Gage application trustee’s College’s interest in the trust. The share permit to construe the trust to the trustee $7,000,000. at issue is valued at more than beneficiary substitute a new for Bennett The other three trust beneficiaries contend- College, “which has ceased to exist.” On College ed that Bennett longer was no 13, 1979, the trustee and the Bennett existence. The three beneficiaries filed College bankruptcy trustee entered into a summary judgment two motions for seek- agreed which that Ben- ing dismissal of the claim of Bennett Col- nett College’s against claim Gage Trust lege, Foundation, Bennett Inc. and fully by payment would be satisfied of (referred University Pace collectively $3,668.22,the of up amount income accrued Bennett) to be beneficiaries of the Collbran date on which Bennett moving parties trust. The contended that adjudicated bankrupt. September 7, On collaterally judicially was both judgment, the court entered its final estopped asserting that Bennett Col- repeated rulings found in the lege inwas existence at the time of Coll- memorandum decision and referred to the bran’s death. The Denver Probate Court parties’ stipulation. granted summary judg- the motions for litigation any order for the issue Appeals ment and the Colorado majority by estoppel, affirmed. The be barred collateral judg- affirms the four condi- (1) ment of the court of ground tions must be met: the issue for which estoppel. agree litigation precluded I do not is must be identical to estoppel applicable collateral is actually this case. an prior pro- issue determined in a
371 (2) eeeding; party against preclu- whom tion that it was not in existence under the to, sought party have sion is must been controlling definition Trust liti to, prior or in with a gation. See Blue Cross Western New (3) proceeding; there must have been Bukulmez, (Colo. v. 736 P.2d prior judgment final on the merits 1987) (“[sjummary judgment should not be (4) proceeding; party against granted appears any where there to be preclusion sought whom must have had a facts”). controversy concerning material opportunity full and fair majority reasons that prior proceeding. City issue ‘dissolution, Trust’s “definition of ‘exist’— Commission, Springs v. orado Industrial merger, consolidation or otherwise’—is too (Colo.1988). broad to differentiate the deed’s issue, requirement, identity The first use of ‘exist’ from the in- Collbran trust present is not in this case. In order for ” Maj. op. strument’s use of ‘existence.’ apply, collateral “the same iden- reasoning 367. This misconstrues have been in tical matter must issue terms of the Trust. The Trust suit, precise fact deter- former broadly. does not define “exist” It defines by judgment.” Hickey mined the former and, phrase broadly “cease to exist” Assoc., Brewing Anheuser-Busch 36 Colo. therefore, by necessary implication defines (1906). 85 P. very narrowly. “exist” The Collbran Trust specified Trust that the benefi- does not define existence and it remains a ciary, could “cease to ex- disputed issue of material fact whether “dissolution, merger, ist” such means as employ intended to the narrow Collbran this ex- consolidation or otherwise.” Under concept of existence used in the definition, pansive the New York court Trust. found that after the sale of Bennett Col- Accordingly, I the court of would reverse lege’s subsequent assets and its consolida- appeals’ judgment litigation regarding University, tion with Pace exist. had ceased to estoppel. was barred Trust, however, contains no the term “existence.” It definition of joins in this Justice KIRSHBAUM merely states that in order to benefit from dissent. trust, must have been “in existence” at the time of Collbran’s meaning
death. The of the term “exist- but
ence” in this context is not self-evident ambiguous. Pepcol Mfg. Co. v. Den- Cf. Corp., P.2d ver Union FABRICATORS, FIBREGLAS (Colo.1984)(whether ambiguity an exists is INC., Petitioner, *8 law). question of Extrinsic evidence therefore, admissible, to deter- should be See, meaning. e.g., id. After a mine its KYLBERG, Edgewater Richard L. in- trial, might find that Collbran a court Authority, Redevelopment a Colorado money only if it leave tended to body Authority, a cor- Renewal Urban it when she operate had continued Respondents. porate politic, hand, the other a court was a student. On No. 89SC228. merely might determine Colorado, Court of portion leave a of her estate wanted to Banc. En closely institution that was an educational by corporate mater con- tied with her alma Sept. might a trial court Whatever solidation. 13, 1990. Rehearing Denied Nov. find, the resolution of it is evident College is in existence for whether Bennett trust is not con-
purposes of the Collbran determina- by the New York court’s
trolled