IN RE MARVIN L CLARK TRUST
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STATE OF MICHIGAN
COURT OF APPEALS
In re MARVIN L. CLARK TRUST.
BETTY CLARK,
UNPUBLISHED
May 17, 2011
Petitioner-Appellant,
v
No. 296041
Wayne Probate Court
LC No. 03-664463-TV
COMERICA BANK,
Respondent-Appellee.
Before: CAVANAGH, P.J., and TALBOT and STEPHENS, JJ.
PER CURIAM.
Betty Clark challenges the probate court judge’s denial of her request for the imposition
and payment of interest on the delinquent payment of a pecuniary trust bequest. Clark further
contends that Comerica Bank, as a fiduciary of the trust, should be “personally” responsible for
payment of the interest based on their failure to timely distribute her share of the trust. We
affirm.
Clark contends that she is entitled to interest on her beneficial share of the trust due to
delays in distribution of trust assets. In support of her assertion, Clark relies primarily on MCL
555.601(c) to demonstrate her entitlement to an accrual and payment of interest from the date of
the decedent’s death. In evaluating this claim, the probate court addressed the relationship
between MCL 555.601(c) and MCL 700.3904 and determined that any interest accrual would not
begin until one year after verification of potential tax liabilities as a result of the testator’s
distribution of trust assets without modification of the trust document. While the probate court
concurred that Clark would theoretically be entitled to interest it further determined that due to
threatened litigation by other beneficiaries and the issuance of a court-ordered stay, that any
delay in payment to Clark by Comerica Bank was reasonable and served as a valid basis for
tolling.
We find no fault with the reasoning of the probate court regarding the interaction of the
statutory provisions and their application in general. Under the circumstances of this case, we
find that reliance on these statutory provisions is unnecessary because the settlement agreement
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executed by Clark, the other beneficiaries and the fiduciaries resulted in a contractual agreement
that did not include the accrual or payment of interest as a term or condition.
Specifically, due to concerns regarding the sufficiency of the trust assets to fully fund all
of the trust bequests and potential tax liabilities, the beneficiaries and fiduciaries entered into a
settlement order, approved by the probate court on October 8, 2003. The various parties
“agree[d] to be bound by the terms of the . . . settlement,” which reduced Clark’s share to
$400,000 “in lieu of her beneficial interest” of the Marvin Lee Clark Trust. Payment was
contingent on receipt of verification by state and federal tax authorities of the absence of any tax
liability by the Trust. Specifically, Clark and the others agreed:
The undersigned, being all of the beneficiaries of the captioned Trust, do
hereby consent and agree in accordance with MCL 700.7207, that immediately
upon acceptance by the IRS of the Marvin Lee Clark Federal estate tax return as
filed requiring no tax due, the Trustees shall pay to Betty Clark the sum of
$400,000.00 in full satisfaction of her beneficial interest in the Trust. [Emphasis
added.]
At the time of entry into the agreement, the cited statutory provision1 provided:
(1) On petition of an interested person, the court may approve an
interpretation, construction, modification, or other settlement that is agreed upon
in writing by all presently identified and competent beneficiaries whose interests
in the trust may be affected to resolve a contest, controversy, or question of
construction or interpretation concerning the existence, administration, or
termination of an irrevocable trust.
***
(3) The court shall approve an agreement described in subsection (1) if it
appears to have been reached in good faith and its effects are just and reasonable
under all of the relevant facts and circumstances.
(4) The order in response to a petition under subsection (1) is binding on
each party who is represented in the proceeding and on others in accordance with
[MCL 700.1403(b)]. After issuance of the order, the agreement as approved by
the court shall be considered a part of the governing instrument of the trust.
“[A] settlement agreement . . . is a contract and is to be construed and applied as such.
Absent a showing of fraud or duress, courts act properly when they enforce such agreements.”2
1
MCL 700.7207, subsequently amended by 2009 PA 46.
2
Massachusetts Indemnity & Life Ins Co v Thomas, 206 Mich App 265, 268; 520 NW2d 708
(1994).
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Settlement agreements are construed in the same manner as contracts.3 When “interpreting a
contract, it is a court’s obligation to determine the intent of the parties by examining the
language of the contract according to its plain and ordinary meaning.”4 “If the contractual
language is unambiguous, courts must interpret and enforce the contract as written, because an
unambiguous contract reflects the parties’ intent as a matter of law.”5 As Clark does not contend
any fraud or duress in securing her acquiescence to reduce her beneficial interest in the trust, on
fulfillment of the condition precedent of verification of the absence of tax liability, the settlement
agreement was subject to enforcement as written. Notably neither the trust document nor the
subsequent settlement agreement make any reference to an entitlement to or award of interest.
Because the settlement agreement is unambiguous and does not reference or include an interest
provision, it was necessary to honor the language of the contract as reflecting the intent of the
parties.6 This is supported by the statutory provision that recognized the settlement agreement as
being incorporated as part of the “governing instrument of the trust.”7
Clark’s alternative argument regarding the applicability of MCL 600.6013 to determine
an award of interest is without merit as this case was not initiated by the filing of a complaint and
is not an adjudication of an action for money damages.
Because we conclude that Clark is not entitled to interest, this Court need not address her
assertions regarding the propriety of tolling the accrual. Having reviewed the lower court file we
concur with the probate court that, had we determined interest to be due, the filing of additional
litigation by other beneficiaries and the issuance of a stay order would toll the accrual of interest
and preclude the distribution of trust assets by the fiduciaries.8 To the extent that Clark failed to
preserve certain of her claims pertaining to tolling or failed to provide citation to legal authority,
we decline to address these issues.9
Affirmed.
/s/ Mark J. Cavanagh
/s/ Michael J. Talbot
/s/ Cynthia Diane Stephens
3
Gramer v Gramer, 207 Mich App 123, 125; 523 NW2d 861 (1994).
4
In re Smith Trust, 480 Mich 19, 24; 745 NW2d 754 (2008).
5
Id.
6
Id.
7
MCL 700.7207(4).
8
See In re Contempt of Henry, 282 Mich App 656, 680; 765 NW2d 44 (2009); In re Doty’s
Estate, 231 Mich 115, 121-122; 203 NW 865 (1925).
9
In re Coe Marital and Residuary Trusts, 233 Mich App 525, 536; 593 NW2d 190 (1999).
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