Rickey L. Ayers, as administrator of the estate of James L. Cleveland, deceased v. Carol Clark et al.

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REL: 09/07/2012 Notice: T h i s o p i n i o n i s s u b j e c t t o formal r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e R e p o r t e r o f D e c i s i o n s , Alabama A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . ALABAMA COURT OF CIVIL APPEALS SPECIAL TERM, 2012 2110503 Rickey L. Ayers, as a d m i n i s t r a t o r o f the e s t a t e o f James L. C l e v e l a n d , deceased v. Carol Clark e t a l . Appeal from F r a n k l i n C i r c u i t (CV-11-21) Court MOORE, J u d g e . Rickey L. A y e r s , as a d m i n i s t r a t o r o f t h e e s t a t e o f James L. C l e v e l a n d , d e c e a s e d ("the e s t a t e " ) , a p p e a l s f r o m a j u d g m e n t of t h e F r a n k l i n C i r c u i t Court ("the t r i a l court") granting a 2110503 m o t i o n t o d i s m i s s f i l e d b y C a r o l C l a r k and R o b e r t J . C l e v e l a n d for lack of j u r i s d i c t i o n . We reverse. On F e b r u a r y 15, 2011, A y e r s petition to terminate Cleveland had d i e d a trust, e s t a t e on J a n u a r y 6, 2011. Robert alleged that "James Cleveland i n the t r i a l asserting i n t e s t a t e on November A y e r s had been g r a n t e d l e t t e r s Cleveland, filed J. 21, 2010, and L. that A y e r s named as d e f e n d a n t s E s s i e V. and the s e t t l o r Living James a o f a d m i n i s t r a t i o n o f James's Cleveland, James was that court Trust" Carol Clark. and s o l e ("the Ayers trustee trust"), of the which, he a l l e g e d , had i t s p r i n c i p a l p l a c e of a d m i n i s t r a t i o n i n F r a n k l i n County. A y e r s a s s e r t e d t h a t " [ n ] e i t h e r t h e o r i g i n a l n o r any c o p y o f t h e document c r e a t i n g t h e [ t r u s t ] r e m a i n s i n e x i s t e n c e and no l i v i n g contents of p e r s o n has p e r s o n a l the original knowledge of putative existence of the t r u s t . " i s s u e an o r d e r assets trust knowledge o f t h e document, b e n e f i c i a r i e s or terminating statutes. heirs Ayers requested the t r i a l court to i n accordance Although Ayers any f o r the and d i r e c t i n g t h a t t h e o f t h e t r u s t be p a i d i n t o t h e e s t a t e among James's including purpose the t r u s t a complete asserted 2 with for distribution Alabama's in his petition intestacy that he 2110503 seeking the termination p e t i t i o n as s e e k i n g Carol the Clark 1 the trust, we interpret a d e c l a r a t i o n t h a t no v a l i d t r u s t and Robert denying petition, 2011. of the A l s o on J u l y 15, J. Cleveland filed an a l l e g a t i o n s t h e r e i n , on 2011, his exists. answer to July 15, C a r o l and R o b e r t f i l e d a m o t i o n t o d i s m i s s , a s s e r t i n g t h a t t h e document c r e a t i n g t h e t r u s t had b e e n l o c a t e d a f t e r A y e r s had Carol and that the a s s e t s h e l d by t h e t r u s t a r e n o t a s s e t s o f t h e e s t a t e b u t are Robert t o be also asserted in filed their motion d i s t r i b u t e d pursuant to the r e a l p a r t y i n i n t e r e s t and that the C a r o l and trial lacked Robert f i l e d a brief November 20, trust, to dismiss t h a t Ayers i s not does n o t have s t a n d i n g , court dismiss; attached his petition. subject-matter and, a thus, jurisdiction. i n support of t h e i r motion to t o t h a t b r i e f i s a c o p y o f a document d a t e d 1991, entitled "Love A g r e e m e n t . " Ayers f i l e d a r e s p o n s e t o t h e m o t i o n t o d i s m i s s , a s s e r t i n g t h a t t h e document submitted by C a r o l and R o b e r t was e s t a b l i s h e d the n o t t h e t r u s t document t h a t trust. A l t h o u g h E s s i e V. C l e v e l a n d was s e r v e d as a d e f e n d a n t , she f a i l e d t o f i l e an answer t o A y e r s ' s p e t i t i o n . B e c a u s e t h e t r i a l c o u r t u l t i m a t e l y d i s m i s s e d the p e t i t i o n f o r l a c k of s u b j e c t - m a t t e r j u r i s d i c t i o n , we c o n c l u d e t h a t t h a t j u d g m e n t d i s p o s e d o f A y e r s ' s c l a i m s a g a i n s t a l l t h e named d e f e n d a n t s . 1 3 2110503 On November 30, 2 0 1 1 , t h e t r i a l granting stated: Civ. Carol and R o b e r t ' s motion to dismiss. "MOTION TO DISMISS PURSUANT TO RULE That order 1 2 ( B ) [ , A l a . R. P.,] f i l e d by [ C a r o l C l a r k ] a n d [ R o b e r t J . C l e v e l a n d ] i s hereby GRANTED. dismissed." motion Court lacks (Capitalization to alter, jurisdiction. i n original.) Ayers filed F e b r u a r y 22, 2012. h i s notice Case Ayers amend, o r v a c a t e t h e t r i a l on December 29, 2 0 1 1 ; t h a t m o t i o n 2012. c o u r t e n t e r e d an o r d e r filed a c o u r t ' s judgment was d e n i e d on J a n u a r y of appeal is to this 12, c o u r t on This court t r a n s f e r r e d the appeal t o the A l a b a m a Supreme C o u r t f o r l a c k o f s u b j e c t - m a t t e r j u r i s d i c t i o n ; that court subsequently transferred the appeal back t o t h i s c o u r t , p u r s u a n t t o § 1 2 - 2 - 7 ( 6 ) , A l a . Code 1975. Ayers dismissing argues on a p p e a l his petition jurisdiction. that based the t r i a l on lack of court erred i n subject-matter E a c h o f A y e r s ' s a r g u m e n t s on a p p e a l t e n d i n g t o show t h a t t h e t r i a l c o u r t h a s j u r i s d i c t i o n t o h e a r t h i s are based on Ayers's continued assertion that the action "Love A g r e e m e n t " i s n o t t h e document t h a t c r e a t e d t h e t r u s t . I n S m i t h v. N e i l , 20 So. 3d 1 2 7 1 , 1273 ( A l a . 2 0 0 9 ) , f i l e d a complaint against N e i l and o t h e r d e f e n d a n t s , 4 Smith alleging 2110503 a number o f c l a i m s stemming f r o m N e i l ' s p u r p o r t e d failure to t r a n s f e r an o w n e r s h i p i n t e r e s t i n a company t o S m i t h . Smith, b o t h i n h e r i n d i v i d u a l c a p a c i t y a n d on b e h a l f o f t h e company, filed the complaint against, among c u r r e n t owner o f t h e company. the company filed lacked standing did motions others, the to dismiss alleging asserted, trial that Smith she d i d n o t . court's that Smith t o sue on b e h a l f o f t h e company b e c a u s e she capacity against premise and t h e N e i l a n d t h e c u r r e n t owner o f n o t own t h e company a n d t h a t t h e c l a i m s individual Neil the current owned the owner w e r e b a s e d on company, 20 So. 3d a t 1274. d i s m i s s a l o f Smith's asserted i n her claims which, they In a f f i r m i n g the on b e h a l f of the company a n d h e r c l a i m s a g a i n s t t h e c u r r e n t owner, t h e supreme court stated, i n pertinent part: " I n Newman v. S a v a s , 878 So. 2d 1147 ( A l a . 2003), t h i s C o u r t s e t out the standard o f review o f a r u l i n g on a m o t i o n t o d i s m i s s f o r l a c k o f subject-matter j u r i s d i c t i o n : "'"A r u l i n g on a m o t i o n t o dismiss i s reviewed without a p r e s u m p t i o n o f c o r r e c t n e s s . Nance v. M a t t h e w s , 622 So. 2d 297, 299 (Ala. 1993). This Court must accept the a l l e g a t i o n s of the complaint as t r u e . C r e o l a L a n d Dev., I n c . v. B e n t b r o o k e H o u s i n g , L.L.C., 828 So. 2d 285, 288 ( A l a . 5 2110503 2002). Furthermore, i n r e v i e w i n g a r u l i n g on a m o t i o n t o d i s m i s s we w i l l n o t c o n s i d e r w h e t h e r t h e pleader w i l l u l t i m a t e l y p r e v a i l but whether the pleader may p o s s i b l y p r e v a i l . Nance, 622 So. 2d a t 299."' "'878 So.2d a t 1148-49.' " P o n t i u s v. S t a t e Farm Mut. A u t o . I n s . Co., 915 So. 2d 557, 563 ( A l a . 2 0 0 5 ) . See a l s o Ex p a r t e A l a b a m a Dep't o f T r a n s p . , 978 So. 2d 17, 21 ( A l a . 2 0 0 7 ) . "III. Analysis "[The c u r r e n t owner o f t h e company] p o s t u r e s h e r c h a l l e n g e t o Smith's c o m p l a i n t under Rule 1 2 ( b ) ( 1 ) , A l a . R. C i v . P., as a f a c t u a l c h a l l e n g e r a t h e r t h a n a f a c i a l challenge. This Court r e c e n t l y discussed t h e d i f f e r e n c e b e t w e e n a f a c i a l c h a l l e n g e and a f a c t u a l c h a l l e n g e i n Ex p a r t e Safeway I n s u r a n c e Co. o f A l a b a m a , I n c . , 990 So. 2d 344 ( A l a . 2008) . Q u o t i n g L i n d s e y v. U n i t e d S t a t e s , 448 F. Supp. 2d 37, 42-43 (D.D.C. 2 0 0 6 ) , t h i s C o u r t e x p l a i n e d : "'"Once a d e f e n d a n t has moved t o d i s m i s s a case p u r s u a n t t o Rule 1 2 ( b ) ( 1 ) , 'the plaintiff bears the burden of establishing the f a c t u a l p r e d i c a t e s of j u r i s d i c t i o n by a p r e p o n d e r a n c e of the e v i d e n c e . ' E r b y v. U n i t e d S t a t e s , 424 F. Supp. 2d 180, 182 (D.D.C. 2006) (citing L u j a n v. D e f e n d e r s o f W i l d l i f e , 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L. Ed. 2d 351 (1992)) 'The [ C ] o u r t , i n t u r n , has an a f f i r m a t i v e o b l i g a t i o n to ensure t h a t i t i s acting within the scope of its jurisdictional a u t h o r i t y . ' Abu A l i v. G o n z a l e s , 387 F. Supp. 2d 16, 17 (D.D.C. 2005) ( i n t e r n a l q u o t a t i o n s o m i t t e d ) . 6 2110503 II I II " ' " F a c i a l c h a l l e n g e s , s u c h as m o t i o n s to dismiss f o r l a c k of standing at the pleading stage, 'attack[] the factual allegations of the complaint that are c o n t a i n e d on t h e f a c e o f t h e c o m p l a i n t . ' Al-Owhali [ v . A s h c r o f t ] , 279 F. Supp. 2d [13,] 20 [(D.D.C. 2003)] (internal q u o t a t i o n marks and c i t a t i o n o m i t t e d ) . ' I f a d e f e n d a n t mounts a " f a c i a l " c h a l l e n g e t o the l e g a l s u f f i c i e n c y of the p l a i n t i f f ' s j u r i s d i c t i o n a l a l l e g a t i o n s , t h e c o u r t must accept as t r u e t h e a l l e g a t i o n s i n t h e complaint and consider the factual a l l e g a t i o n s of the complaint i n the l i g h t most f a v o r a b l e t o t h e n o n - m o v i n g p a r t y . ' E r b y , 424 F. Supp. 2d a t 181 .... The c o u r t may l o o k b e y o n d t h e a l l e g a t i o n s c o n t a i n e d in the complaint to decide a facial c h a l l e n g e , 'as l o n g as i t s t i l l a c c e p t s t h e f a c t u a l a l l e g a t i o n s i n the complaint as t r u e . ' Abu A l i , 387 F. Supp. 2d a t 18 .... " ' " F a c t u a l c h a l l e n g e s , by c o n t r a s t , are 'addressed t o the u n d e r l y i n g f a c t s c o n t a i n e d i n t h e c o m p l a i n t . ' A l - O w h a l i , 279 F. Supp. 2d a t 20.... [A] c o u r t d e c i d i n g a Rule 12(b)(1) motion a s s e r t i n g a f a c t u a l c h a l l e n g e 'must go b e y o n d t h e p l e a d i n g s and r e s o l v e any d i s p u t e d i s s u e s o f f a c t t h e r e s o l u t i o n of which i s necessary to a ruling upon the motion to dismiss.' [ P h o e n i x C o n s u l t i n g , I n c . v. R e p u b l i c o f Angola, 216 F.3d 36, 40 (D.C. C i r . 200 0).]"' " S a f e w a y , 990 So. 2d a t 349-50. I n S a f e w a y , t h i s Court concluded that the complaint was facially s u f f i c i e n t , and i t r e v i e w e d t h e d e f e n d a n t ' s f a c t u a l challenge to the t r i a l court's subject-matter jurisdiction." 20 So. 3d a t 1274-75 (footnote 7 omitted). 2110503 In t h e i r b r i e f on appeal, C a r o l and Robert s t a t e i n the s e c t i o n e n t i t l e d "Summary o f t h e A r g u m e n t , " i n p e r t i n e n t p a r t : " I t i s the r e s p o n s i b i l i t y of the Trustees of the T r u s t , C a r o l C l a r k and R o b e r t J . C l e v e l a n d , to e n f o r c e t h e p r o v i s i o n s o f t h e a g r e e m e n t and o n l y i f a C o u r t d e t e r m i n e s t h e 'Love A g r e e m e n t ' i s n o t t h e same document r e f e r e n c e d as t h e James L. C l e v e l a n d L i v i n g T r u s t by E d w a r d J o n e s w o u l d t h e a s s e t s o f t h e T r u s t p o s s i b l y pass through the E s t a t e . " It not i s clear have trial the that Carol standing court trial lacked court Agreement" i s the the trial based on to and bring of the action subject-matter and on appeal, on created C a r o l and jurisdiction, and, thus, jurisdiction, turns document t h a t court granted lack R o b e r t ' s argument t h a t A y e r s both whether the that that "Love Because Robert's motion to i t i s clear the before the trust. did dismiss the trial c o u r t i n t e r p r e t e d C a r o l and R o b e r t ' s a s s e r t i o n t h a t t h e "Love A g r e e m e n t " c r e a t e d t h e t r u s t as a f a c t u a l c h a l l e n g e , w h i c h i t apparently In r e s o l v e d i n f a v o r o f C a r o l and response Ayers f i l e d to Carol and Robert's Robert. motion a response that s t a t e d , i n p e r t i n e n t to dismiss, part: "1. [Ayers] p l a n s t o p r e s e n t e v i d e n c e i n t h i s case t h a t the document p r o c u r e d by [Carol and Robert], titled 'Love A g r e e m e n t ' and d a t e d b o t h November 20, 1991, and May 15, 1990, did not e s t a b l i s h t h e James C l e v e l a n d L i v i n g T r u s t . 8 2110503 "2. [Ayers] w i l l p r o v i d e t e s t i m o n y from the appropriate authorities at every financial i n s t i t u t i o n t h a t h o l d s f u n d s on b e h a l f o f t h e James C l e v e l a n d L i v i n g T r u s t t o t h e e f f e c t t h a t t h e James Cleveland Living T r u s t was c r e a t e d by a trust document d a t e d on o r a b o u t J u l y 11, 1990, titled 'The James C l e v e l a n d L i v i n g T r u s t . ' "3. B e c a u s e t h e 'Love A g r e e m e n t ' p r o v i d e d by t h e D e f e n d a n t s d i d n o t e s t a b l i s h t h e James C l e v e l a n d L i v i n g T r u s t and no document c r e a t i n g s a i d t r u s t has been l o c a t e d t o t h i s d a t e , [Ayers] b e l i e v e s the a p p r o p r i a t e remedy r e m a i n s t o d i s s o l v e s a i d t r u s t and p l a c e t h e f u n d s i n t o t h e e s t a t e o f James L e b o r n Cleveland. As t h e A d m i n i s t r a t o r o f t h e E s t a t e o f James L e b o r n C l e v e l a n d , [ A y e r s ] i s a r e a l p a r t y i n i n t e r e s t , has s t a n d i n g b e f o r e t h i s C o u r t , and t h i s Court thus r e t a i n s s u b j e c t matter j u r i s d i c t i o n over t h i s cause." When C a r o l and R o b e r t f i l e d t h e i r m o t i o n t o d i s m i s s , challenged the factual p e t i t i o n t h a t no in existence. initiating based on existed. an the We interpret 2010), See and l a c k of a trust the face of Ayers's petition, trial document, however, court that was as to declare, no trust ever s t a n d i n g t o r e q u e s t s u c h a d e c l a r a t i o n stems c a p a c i t y as g e n e r a l l y Ex § Ayers's a c t i o n r e q u e s t i n g the Ayers's on c o p y o f t h e document c r e a t i n g t h e t r u s t from h i s f i d u c i a r y estate. assertion they parte 19-3B-103(10), the a d m i n i s t r a t o r of Byrom, Ala. Code " e s t a t e " i n the d e f i n i t i o n of a "person" 9 47 So. 1975 3d 791 James's (Ala. (including an f o r purposes of the 2110503 Alabama U n i f o r m seq.). he Trust Code, A l a . Code 1975, § 19-3B-101 et B e c a u s e A y e r s i s t h e a d m i n i s t r a t o r o f James's e s t a t e , is a fiduciary " u n d e r a d u t y t o s e t t l e and e s t a t e o f t h e d e c e d e n t ... distribute as e x p e d i t i o u s l y and e f f i c i e n t l y as i s c o n s i s t e n t w i t h the best i n t e r e s t s of the e s t a t e . " 8 3 3 ( a ) , A l a . Code 1975. the § 43-2- C a r o l and R o b e r t ' s a s s e r t i o n t h a t the "Love A g r e e m e n t " i s t h e t r u s t document does n o t a t t a c k A y e r s ' s standing either as the administrator a the estate to challenge t h e v a l i d i t y o f t h e t r u s t i t s e l f o r C a r o l and a s s e r t i o n t h a t the the of trust. genuine Agreement" regardless Robert's "Love A g r e e m e n t " i s t h e document c r e a t i n g Rather, i t merely i l l u s t r a t e s that there issue is of the material fact as document that created of whether the trial whether t h a t t r u s t i s v a l i d . court to whether the the trust Thus, t h e to Ayers's standing. We "Love and, concludes that i t d i d , trial court erred i n t e r p r e t i n g C a r o l and R o b e r t ' s m o t i o n t o d i s m i s s as a challenge remains conclude, by factual therefore, that t h e t r i a l c o u r t e r r e d i n g r a n t i n g C a r o l and R o b e r t ' s m o t i o n t o d i s m i s s , and we remand t h e c a s e t o t h e t r i a l c o u r t f o r f u r t h e r proceedings consistent with t h i s REVERSED AND Thompson, opinion. REMANDED. P.J., and Pittman, concur. 10 Bryan, and Thomas, JJ.,

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