Plaintiff’s father and plaintiff’s stepmother (defendant) married around 1981. In 2002, the two executed an “Agreement of Trust” prepared by their estate planning attorney. The Agreement of Trust created a Trust for which Plaintiff’s father and defendant were both the grantors and trustees. The Agreement of Trust also provided that if Plaintiff’s father passed away before defendant, the joint trust would be split into a “Survivor’s Trust,” and a “Family Trust,” with defendantserving as the sole trustee of the Survivor’s Trust, and defendant and plaintiff serving as trustees for the Family Trust. The Agreement of Trust provided for the division and distribution of the assets and income of joint trust in the event of Plaintiff’s father’s death. On the same day the Agreement of Trust was signed, Plaintiff’s father signed his last will and testament, which named defendant as his personal representative, incorporated by reference a separately executed list of gifts of personal property from his estate, and directed that the residue of his estate be added to the principal of the Trust and held, managed, and distributed in accordance with the terms of the Agreement of Trust.
Plaintiff’s father passed away in 2011. According to plaintiff, defendant invited him to take the watch promised to him after his father’s death, but she later took the watch from plaintiff’s home and gave it to another family member. Similarly, plaintiff testified that defendant invited him to take the tools promised to him after his father passed away, but that he thought it expedient to leave them at defendant’s location where he could use them to fix things. However, according to plaintiff, in time defendant gave some of the tools to another family member and plaintiff did not know what happened to the rest of them. In addition, defendant sold plaintiff’s father’s Colorado properties, but she did not allocate the proceeds of those sales to either the Survivor’s Trust or the Family Trust.
Plaintiff, who was a trustee of the Family Trust, filed a complaint raising numerous claims against Joan, both individually and in her capacity as a trustee of the Family Trust. The trial court dismissed all of plaintiff’s claims against Defendant individually, and all but two claims against her as a trustee. Ultimately, a bench trial was held on plaintiff’s claims that Defendant engaged in common law and statutory conversion when she disposed of the Rolex watch and the tools, and that she violated her fiduciary duty as a trustee of the Family Trust when she sold the Colorado properties titled exclusively in Plaintiff’s father’s name for unreasonable values and then retained the proceeds of those sales. At the close of trial, the trial court found that plaintiff failed to sustain his evidentiary burden, and dismissed plaintiff’s claims.
STANDARD OF REVIEW
This Court reviews a trial court’s findings of fact following a bench trial for clear error, and its conclusions of law de novo. “A finding is clearly erroneous if there is no evidentiary support for the finding or, after reviewing the entire record, this Court is definitely and firmly convinced that the trial court made a mistake.” “This Court gives ‘due regard to the special opportunity of the [trial] court to judge the credibility of the witnesses who appeared before it . . . .’ ”
VALUATION OF COLORADO PROPERTIES
Plaintiff contends that the trial court erred when it disregarded his valuation testimony and instead relied on its own calculations to determine the value of the subject Colorado properties. Plaintiff cites multiple treatises and articles that were not presented or discussed during trial and asks this Court take judicial notice of these treatises and texts. However, “[t]his Court’s review is limited to the record developed by the trial court,” and a “party is not permitted to enlarge the record on appeal by asserting numerous facts that were not presented at the trial court.” See also MCR 7.210(A)
During trial, plaintiff argued that Defendant breached her fiduciary duty as a trustee of the Family Trust by misappropriating assets from Plaintiff’s father’s estate by selling the subject Colorado properties below market value and retaining the proceeds of those sales instead of distributing them to the Survivor’s Trust and the Family Trust. The trial court rejected Plaintiff’s valuation testimony as having insufficient basis and, as part of its analysis, performed its own calculations to show a different possible value. Plaintiff asserts that the trial court clearly erred when it relied on an improperly calculated average as the basis for its ruling that plaintiff had failed to sustain his burden to show that Defendant sold the Colorado properties for an unreasonable price. The trial court did not simply rely on its own calculations, but instead clearly and extensively explained that it found that plaintiff had failed to sustain his burden because of his resort to using unreliable valuation methodology, given that plaintiff failed to provide sufficient explanation regarding his methods, or regarding how he selected his supposedly comparable sales.
In rendering its decision, the trial court noted that there was no explanation in plaintiff’s testimony why he did not use comparables from 2011 instead of comparables from 2017 and 2018. The trial court also explained that it had some issues with plaintiff’s comparable sales, in that plaintiff had testified that the per acre average price was $48,720 on the basis of the comparable sales plaintiff selected, but there was no information regarding “what sort of development” had been completed in connection with those properties as compared to the subject Colorado properties. The trial court also found that plaintiff’s opinion regarding the value of the Colorado properties was rebutted by the evidence that showed Plaintiff’s father had been unable to sell the 15-lot package for substantially lower prices than plaintiff’s proposed value. The trial court reasonably found it significant that Plaintiff’s father had been unable to sell the properties at issue for many years at a price far less than what plaintiff now asserts their values are.
Additionally, the trial court noted that, even if plaintiff had shown that the Colorado properties at issue had been sold for an unreasonable value, the court’s own calculation regarding their value indicated that Defendant would have been entitled to retain the proceeds of those sales under certain exemptions and reimbursements to which she was entitled under Michigan law. As a result, plaintiff has failed to show the trial court clearly erred when it determined that plaintiff had failed to sustain his burden in establishing that Defendant breached her fiduciary duty in connection with the sale prices of the subject Colorado properties.
CONVERSION CLAIMS AND THE ELEMENTS OF A GIFT
Plaintiff next contends that the trial court erred when it ruled that plaintiff’s claims of conversion of personal property against Defendant failed because Plaintiff’s father had not effected completed gifts of the allegedly converted Rolex watch and the tools to plaintiff before Plaintiff’s father’s death. This argument is without merit.
“ ‘[F]or a gift to be valid, three elements must be satisfied: (1) the donor must possess the intent to transfer title gratuitously to the donee, (2) there must be actual or constructive delivery of the subject matter to the donee, unless it is already in the donee’s possession, and (3) the donee must accept the gift.’ ” “ ‘A gift inter vivos is not only immediate, but absolute and irrevocable.’ ”
“Delivery must be unconditional and must place the property within the dominion and control of the donee,” and an inter vivos gift “must be fully consummated during the lifetime of the donor and must invest ownership in the donee beyond the power of recall by the donor.”
Our Supreme Court has explained that while “an actual delivery is indispensable to effect a parol gift . . . [s]ubsequent possession by the donor is not necessarily incompatible with the donee’s dominion over the property; nor is it conclusive evidence that there was no delivery, or that the dominion did not pass to the donee.” Thus, subsequent possession of a gift by the donor of the gift “would undoubtedly call for an explanation where the custody of the thing given had been retained by the donor, and such fact might be taken into consideration in determining whether a valid gift had been consummated, but it would not necessarily raise a conclusive presumption.”
The trial court found that there was no evidence offered at trial showing that Plaintiff’s father made a fully executed gift of the watch and tools to plaintiff before Plaintiff’s father passed away. It explained that plaintiff’s testimony showed at most, an intention on the part of Plaintiff’s father that plaintiff should receive those items after Plaintiff’s father’s death. The trial court also noted that there was no evidence that Plaintiff’s father took any steps to effectuate his intent by either making a completed gift of the items to plaintiff or “by providing in writing, consistent with the clause in his will that says so, that [plaintiff] should receive the items after his death.” Because Plaintiff’s father maintained both possession and control of the watch and the tools, and there was no evidence that Plaintiff’s father actually completed a gift to plaintiff of those items before his death, or otherwise effectuated an intent to give those items to plaintiff in writing in accordance with the terms of his will, the trial court did not clearly err in concluding that plaintiff had failed to sustain his burden of showing that Plaintiff’s father had effected completed gifts of those items to him.
SANCTIONS FOR FRIVOLOUS LITIGATION
After the close of evidence, the trial court permitted the parties to submit briefs before it delivered its ruling. Within the prayer for relief in Defendant’s brief, which was styled as proposed Findings of Fact and Conclusions of Law, Defendant requested that the trial court “characterize [p]laintiff’s claim as frivolous” because of “the complete lack of evidence adduced by” plaintiff during trial, and therefore award her reimbursement “for the costs of preparation and trial in this matter.”
Under Michigan law, a party that maintains a frivolous suit or asserts frivolous defenses is subject to sanctions under applicable statutes and court rules. MCR 2.625(A)(2) provides, “[i]n an action filed on or after October 1, 1986, if the court finds on motion of a party that an action or defense was frivolous, costs shall be awarded as provided by MCL 600.2591.” The trial court's finding regarding the frivolousness of an action is reviewed for clear error, but the amount of sanctions awarded is reviewed for an abuse of discretion.
In this case, the trial court did not abuse its discretion by declining to treat Defendant’s request in her final trial brief for a finding of frivolousness and an attendant award of compensation as a proper motion. On this record, the trial court did not abuse its discretion for having declined sua sponte to revive, develop, and resolve Defendant’s request for sanctions predicated on plaintiff’s frivolous litigation. There was thus properly no decision below for this Court to review. “Appellate review is limited to issues actually decided by the trial court.” In attempting to revive the issue on appeal, defendant claims an entitlement to sanctions for frivolousness without specifying whether it is asking this Court to remand this case to the trial court for appropriate determinations, or to decide the matter in the first instance.
To the extent that defendant is asking this Court to impose sanctions covering its appellate expenses, defendant repeats the mistake of failing properly to raise the issue. Because defendant has requested appellate fees and costs only by way of a passing reference to appellate proceedings in its brief on appeal, defendant has failed to place the question properly before this Court. For these reasons, we reject defendant’s arguments on those procedural grounds.
Further, Defendant asserts that plaintiff’s claims were frivolous because plaintiff supported them with only what defendant characterizes as self-serving testimony that had no objective or credible factual basis. While the trial court found plaintiff’s evidence unpersuasive, plaintiff’s claims were nonetheless not wholly lacking in evidentiary support. The trial court spent a great deal of time explaining precisely why it did not find plaintiff’s evidence to be reliable or persuasive, which militates against defendant’s suggestion that plaintiff effectively presented no evidence in support of his claims. “Not every error in legal analysis constitutes a frivolous position.” Therefore, defendant’s argument in support of its request for sanctions fails on the merits.
ASSISTANCE WITH WILLS AND TRUST ISSUES
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