BETHANY LUTHERAN CHURCH V JOHN W SWENSON TRUST
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
BETHANY LUTHERAN CHURCH a/k/a
NORTHPORT LUTHERAN CHURCH,
UNPUBLISHED
September 28, 2010
Plaintiff-Appellee,
v
ALBERT PORTER and MARIE PORTER,
Individually and Former Trustees of the JOHN W.
SWENSON TRUST; NORTHWESTERN
SAVINGS BANK, Successor Trustee; and
CLINTON N. SWENSON,
No. 291742
Leelanau Probate Court
LC No. 06-010776-CZ
Defendants-Appellees,
and
ALBERT PORTER, BRIAN PORTER, DOUG
PORTER, GREG PORTER, JEFFREY PORTER
and JEROME PORTER,
Intervening Defendants-Appellants.
BETHANY LUTHERAN CHURCH a/k/a
NORTHPORT LUTHERAN CHURCH,
Plaintiff-Appellee,
v
ALBERT PORTER and MARIE PORTER,
Individually and Former Trustees of the JOHN W.
SWENSON TRUST,
Defendants-Appellants,
and
-1-
No. 291762
Leelanau Circuit Court
LC No. 06-010776-CZ
NORTHWESTERN SAVINGS BANK, Successor
Trustee, and CLINTON N. SWENSON,
Defendants-Appellees,
and
ALBERT PORTER,
Intervening Defendant-Appellee,
and
BRIAN PORTER, DOUG PORTER, GREG
PORTER, JEFFREY PORTER and JEROME
PORTER,
Intervening Defendants.
Before: MURPHY, C.J., and HOEKSTRA and STEPHENS, JJ.
PER CURIAM.
These consolidated appeals involve challenges to the trial court’s order enforcing a
settlement agreement between the parties and denying a motion to intervene, as well as the trial
court’s subsequent denial of a motion to set aside the settlement agreement under a theory of
frustration of purpose or impossibility. We affirm in part and reverse in part.
This case involves a dispute related to the John W. Swenson trust. The trust was
originally created in 1986, was subsequently amended in 1991, and then amended for a final time
in 1994. Each version of the trust contained different instructions regarding final disbursement
of the trust assets. The grantor passed away on August 9, 1997, rendering the provisions of the
trust irrevocable.
Under the original provisions of the trust, the entire amount remaining in the trust was to
be distributed to Mildred E. Swenson (hereinafter Mildred) upon the death of the grantor if she
was then surviving. If Mildred did not survive the death of the grantor, the entire amount
remaining in the trust was to be held for the benefit of Clinton N. Swenson1 (hereinafter Clinton)
during his lifetime. Upon the death of Clinton, the remaining trust assets were to be disposed of
1
Clinton passed away while this appeal was pending.
-2-
by dividing and distributing 50% of the remaining assets to the then-surviving grandchildren of
Wesley G. Holton and distributing the balance to plaintiff.
The first amendment to the trust also called for the entire amount remaining in the trust to
be distributed to Mildred upon the death of the grantor, if she was then surviving, or alternatively
held for the benefit of Clinton during his lifetime. However, under this version of the trust,
plaintiff was to receive the entire trust assets remaining upon the death of Clinton.
The second, and final, amendment of the trust eliminated any mention of Mildred, who
had predeceased the grantor, and ordered that the trust assets be held for the benefit of Clinton
during his lifetime upon the death of the grantor. Then, upon the death of Clinton, or in the event
that he predeceased the grantor, the entire remaining trust assets were to be distributed to “Albert
Porter and Marie Porter, husband and wife or to the survivor thereof.”2 The second amendment
of the trust also included the following provision: “In the event neither Albert Porter or Marie
Porter shall survive me then to their issue by right of representation.”
Plaintiff eventually filed suit challenging the validity of the second amendment to the
trust agreement. On the day the matter was scheduled for trial, the parties engaged in lengthy
settlement discussions and reached an agreement. Under the terms of the settlement, which were
placed on the record, defendant parents would remain beneficiaries of the trust, but would
execute an irrevocable assignment of their beneficial interest to the Leelanau Township
Foundation (foundation) for the benefit of the Leelanau Commission on Aging, which would
result in any funds remaining in the trust upon Clinton’s death being immediately passed directly
to the foundation. The settlement agreement called for an amendment to the Trust to facilitate
the above-described irrevocable assignment. The recitation of the agreement on the record also
included reference to defendant sons. Specifically, a statement was made that the settlement was
contingent on the six Porter sons signing waivers and consents to the proposed settlement terms.
Three of the sons were present at the hearing and indicated their assent to the agreement. Later,
the sons as a group indicated that they were not in agreement with the proposed settlement.
Thus, waivers and consents were not procured from each and every one of the defendant sons.
Defendant sons moved to intervene and filed a notice of non-settlement. The remaining
parties filed motions advancing their positions relative to defendant sons’ attempt to intervene
and set aside the settlement agreement. Defendant parents and sons all argued that the settlement
agreement was unenforceable because a condition precedent, i.e., the execution of waivers and
consents by defendant sons, failed to occur. Following a hearing, the trial court denied defendant
sons’ petition to intervene and ordered the enforcement of the settlement agreement.
Defendant parents appealed, challenging the trial court’s decision to enforce the
settlement agreement and deny defendant sons’ motion to intervene. Defendant sons filed a
separate appeal raising the same issues. The two cases were administratively consolidated by
2
For ease of reference, we refer to defendants Albert and Marie Porter collectively as “defendant
parents” and refer to their six intervening sons collectively as “defendant sons.”
-3-
order of this Court. See Bethany Lutheran Church v Porter, et al, unpublished order of the Court
of Appeals, entered May 18, 2009 (Docket Nos. 291742 and 291762). In the interim, defendant
sons, joined by defendant parents, moved for remand, asserting that the theories of frustration of
purpose and impossibility precluded enforcement of the settlement agreement. This Court
granted the motion for remand “to address impossibility and frustration of purpose relating to the
purported settlement agreement.” See Bethany Lutheran Church v Porter, et al, unpublished
order of the Court of Appeals, entered November 23, 2009 (Docket Nos. 291742 and 291762).
Following a hearing, the trial court denied the motion, finding that the settlement agreement was
not frustrated and/or rendered impossible or impracticable to perform under Michigan law.
Defendants now challenge the court’s order denying defendant sons’ motion to intervene, the
order refusing to set aside the settlement agreement, and the finding that the agreement should
not be set aside due to frustration of purpose or impossibility.
We first address the claim that the trial court erred in denying defendant sons’ motion to
intervene. This issue was preserved for review through the motion to intervene and the
subsequent denial of that motion. Detroit Leasing Co v Detroit, 269 Mich App 233, 237; 713
NW2d 269 (2005). This Court reviews a decision to deny a motion to intervene for an abuse of
discretion. Vestevich v West Bloomfield Twp, 245 Mich App 759, 761; 630 NW2d 646 (2001).
“An abuse of discretion occurs when the decision results in an outcome falling outside the
principled range of outcomes.” Radeljak v DaimlerChrysler Corp, 475 Mich 598, 603; 719
NW2d 40 (2006).
Motions to intervene are governed by MCR 2.209, which provides a right of intervention,
in pertinent part, where a petitioner “claims an interest relating to the property or transaction
which is the subject of the action and is so situated that the disposition of the action may as a
practical matter impair or impede the applicant’s ability to protect that interest, unless the
applicant’s interest is adequately represented by existing parties.” MCR 2.209(A)(3). The court
rule also provides for permissive intervention when “an applicant’s claim or defense and the
main action have a question of law or fact in common.” MCR 2.209(B)(2). However, motions
to intervene must be timely, whether intervention is sought by right or by permission, and failure
to timely request intervention is a proper ground to deny a motion for intervention. MCR 2.209
(“On timely application . . . .”); Davenport v City of Grosse Point Farms Bd of Zoning Appeals,
210 Mich App 400, 408; 534 NW2d 143 (1995).
In the instant case, the trial court denied defendant sons’ motion to intervene after
determining that defendant sons did not have an interest in the trust or its assets, and it also
concluded that the motion was untimely. On appeal, defendant sons fail to address the trial
court’s ruling that the motion to intervene was untimely, and instead limit their argument to the
issue of whether they had an interest in the trust. If a party fails to dispute a basis of the trial
court’s ruling, this Court need not consider granting the relief sought. Derderian v Genesys
Health Care Sys, 263 Mich App 364, 381; 689 NW2d 145 (2004).
In addition, the death of Clinton during the pendency of this appeal has effectively
rendered the argument of defendant sons moot and unavailing. The thrust of defendant sons’
argument on appeal in support of their position that they have an interest in the trust sufficient to
require intervention is found in the following passages in their brief:
-4-
Under EPIC, in the event Albert and Marie Porter predecease Clinton N.
Swenson, the anti-lapse provisions of MCL 700.2714 apply, creating a substitute
gift in [defendant sons]. The RPC did not have any similar language. Absent a
contrary intent in the Trust – which does not exist – the anti-lapse provision of
EPIC should apply.
***
It does not matter how unlikely or remote it would be that Albert and
Marie Porter predecease Clinton, the possibility exists and therefore, [defendant
sons] have a protectable interest in the Trust and should have been allowed to
intervene under MCR 2.209(A).
As Clinton has now died and defendant parents survive, the trust requires that any
amount remaining in the trust “shall be disposed of” by way of a “100%” mandatory distribution
to defendant parents. This distribution essentially closes out the trust, gifting the remaining trust
assets to defendant parents.3 Thus, even assuming that defendant sons’ argument was sound
during Clinton’s lifetime, an issue we need not reach, the argument deflated on Clinton’s death.
Although defendant parents could potentially pass assets once contained in the trust to defendant
sons through their own devices, assuming surviving assets and a failure of plaintiff’s efforts
challenging the validity of the final amendment to the trust, any conceivable interest held by
defendant sons would be speculative and tenuous at best and insufficient to warrant their
intervention into the suit.
We next address whether the trial court erred in ordering the enforcement of the
settlement agreement. We review a trial court’s ruling regarding whether the parties entered into
an enforceable agreement for an abuse of discretion. Rinvelt v Rinvelt, 190 Mich App 372, 382;
475 NW2d 478 (1991). However, this issue chiefly concerns interpretation of the settlement
agreement, which is a question of law subject to de novo review where the agreement is
unambiguous. MacInnes v MacInnes, 260 Mich App 280, 283; 677 NW2d 889 (2004).
MCR 2.507(G) governs settlement agreements and sets forth that such agreements are not
enforceable unless made in open court or evidenced by a writing signed by the party to be
charged. The terms of the settlement agreement in the instant case were delineated in open court.
Hence, as general matter, a trial court would be obligated to uphold the agreement in the event of
a challenge. Columbia Assoc, LP v Dept of Treasury, 250 Mich App 656, 668-669; 649 NW2d
760 (2002). However, settlement agreements are contracts and are “governed by the legal rules
applicable to the construction and interpretation of other contracts.” Reicher v SET Enterprises,
Inc, 283 Mich App 657, 663; 770 NW2d 902 (2009). In contract law, a condition precedent “is a
fact or event that the parties intend must take place before there is a right to performance.” Able
3
Any suggestion by defendant sons that assets from the trust still remaining at the death of
defendant parents necessarily pass to them under the terms of the trust is meritless and
inconsistent with the trust’s language.
-5-
Demolition, Inc v City of Pontiac, 275 Mich App 577, 583; 739 NW2d 696 (2007) (internal
citation omitted). The agreement in the instant case called for a condition precedent; namely,
that the six sons of defendant parents approve the agreement by way of signing waivers and
consents. There is no dispute that the condition was not satisfied.
Our Supreme Court’s decision in Modern Globe, Inc v 1425 Lake Drive Corp, 340 Mich
663; 66 NW2d 92 (1954) is instructive in the instant matter. In that case, our Supreme Court
determined that an agreement was not binding when a condition of the agreement was not met,
even where the condition was not strictly necessary. Id. at 669-670. Here, the trial court
disregarded a specifically enumerated condition of the parties’ agreement because it determined
that the term was not legally necessary. In doing so, the trial court failed to abide by the
requirement that courts give effect to every word, phrase, and clause in a contract and avoid an
interpretation that would render any part of the contract surplusage or nugatory. Klapp v United
Ins Group Agency, Inc, 468 Mich 459, 467; 663 NW2d 447 (2003). Michigan recognizes the
principle that competent parties are free to contract for whatever terms they wish. Wilkie v AutoOwners Ins Co, 469 Mich 41, 62; 664 NW2d 776 (2003). The fact that the sons may not have
been interested parties and that their assent to the settlement agreement may not have been
legally required does not negate the fact that the parties agreed to this term. Therefore, the trial
court’s order to enforce the settlement agreement in the face of a non-occurring condition
precedent was improper.
In light of our conclusion that the trial court erred in enforcing the settlement agreement
where a contingency did not occur, it is not necessary to address whether the settlement
agreement was also unenforceable under a theory of frustration of purpose or impossibility.
We also decline plaintiff’s invitation to impose sanctions pursuant to MCR 7.216(C) for a
vexatious appeal. A successful appellant cannot be said to have brought a vexatious appeal.
Affirmed in part, and reversed and remanded in part for proceedings consistent with this
opinion. We do not retain jurisdiction. No party having prevailed in full on appeal, taxable costs
are not awarded under MCR 7.219.
/s/ William B. Murphy
/s/ Joel P. Hoekstra
/s/ Cynthia Diane Stephens
-6-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
