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No. 99-454
IN THE SUPREME COURT OF THE STATE OF MONTANA
2000 MT 190
300 Mont. 418
8 P.3d 83
IN THE MATTER OF THE TRUST OF
LILLIAN P. JAMEISON
MARGARET SCHMIDT,
Petitioner and Respondent,
v.
ARLYSS BOLICH,
Respondent and Appellant,
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable John S. Henson, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Brian L. Delaney; Mulroney, Delaney & Scott, Missoula, Montana
For Respondent:
Harry Haines, Gail M. Haviland; Worden, Thane & Haines, Missoula,
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Montana
Submitted on Briefs: November 4, 1999
Decided: July 18, 2000
Filed:
_________________________________________
Clerk
Justice Karla M. Gray delivered the Opinion of the Court.
¶1 Arlyss Bolich (Bolich) appeals from the Opinion and Order entered by the Fourth
Judicial District Court, Missoula County, granting the motion for summary judgment filed
by Margaret Schmidt (Schmidt), terminating the Lillian P. Jameison Revocable Trust
(Jameison Trust) and ordering distribution of the trust estate pursuant to the laws of
intestacy. We affirm.
¶2 The sole issue on appeal is whether the District Court erred in granting summary
judgment to Schmidt, declaring the Jameison Trust invalid and terminating it.
BACKGROUND
¶3 On January 16, 1986, Lillian P. Jameison (Jameison) executed a Power of Attorney
appointing Bolich, her granddaughter, as her "true and lawful attorney." The Power of
Attorney authorized Bolich to act on Jameison's behalf
to receive and receipt for any and all sums of money or payments due or to become due to
me, to deposit in my name in any bank or banks any and all moneys collected or received
by him (her), to pay any and all bills, accounts, claims and demands now or hereafter
payable by me, to draw checks or drafts upon any and all bank accounts or deposits
belonging to me, to act for me in any business in which I am now or have been engaged or
interested, and generally to do and perform all matters and things, transact all business,
make, execute and acknowledge all contracts, orders, deeds, writings, assurances, and
instruments which may be requisite or proper to effectuate any matter or thing
appertaining or belonging to me, and generally to act for me in all matters affecting my
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business or property, with the same force and effect to all intents and purposes as though I
were personally present and acting for myself hereby ratifying and confirming whatsoever
my said attorney shall do by authority hereof.
¶4 On April 28, 1987, Bolich executed as attorney-in-fact for Jameison, as trustor, a Trust
Agreement which, on its face, created the Jameison Trust. The Trust Agreement
designated Bolich the trustee and she also signed it in that capacity. It named Jameison the
income beneficiary for life and Jameison's daughters, Schmidt and M. Jo Stiter (Stiter),
income beneficiaries during their lives in the event they survived her. The Trust
Agreement also provided for distribution of the trust principal for the health, maintenance,
and welfare of the income beneficiaries at the trustee's discretion. Finally, on the death of
the last income beneficiary, the trust was to dissolve with the remainder being distributed
to Bolich or her estate. Again signing as Jameison's attorney-in-fact, Bolich conveyed all
of Jameison's real property--in excess of 30 parcels--and all of Jameison's personal
property--including several certificates of deposit and promissory notes--to herself, as
trustee of the Jameison Trust.
¶5 Jameison died on June 14, 1987. Stiter died on February 25, 1990. In August and
September of 1994, Bolich distributed a total of $100 in income from the Jameison Trust
to Schmidt.
¶6 In October of 1994, Schmidt's attorney wrote a letter to Bolich requesting accountings
for the trust. Bolich provided several documents, none of which satisfied Schmidt as an
accounting. In October of 1995, Schmidt engaged another attorney who wrote to Bolich's
counsel requesting an accounting for each year of the trust's existence. Bolich apparently
failed to provide Schmidt with the requested accountings.
¶7 On February 2, 1996, Schmidt petitioned the District Court to appoint a temporary
trustee and require accountings. She also requested an order determining the validity or
invalidity of the Trust Agreement. Schmidt alleged that there was no evidence of intent by
Jameison to create the Jameison Trust and, as a result, the Jameison Trust should be
declared invalid and the trust estate distributed pursuant to intestacy laws. In the event the
District Court determined the Jameison Trust to be valid, Schmidt sought Bolich's removal
as trustee.
¶8 Bolich filed an answer and counterpetition. Bolich denied Schmidt's allegations
regarding the invalidity of the Jameison Trust. She affirmatively asserted that the Power of
Attorney specifically empowered her to create the Jameison Trust and that the Power of
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Attorney, the Trust Agreement and the conveyance documents were all completed
pursuant to Jameison's specific direction. She also affirmatively alleged that ample
evidence exists and would be produced to demonstrate Jameison's intent. Bolich further
urged that, in the event the Jameison Trust was invalid, the court should distribute the trust
estate pursuant to Jameison's last will and testament which, as alleged on information and
belief, made no provision for Schmidt. Schmidt requested a copy of the referenced last
will and testament and, when Bolich failed to produce it, moved the District Court for an
order to produce. The court granted Schmidt's motion and, when Bolich failed to produce
the last will and testament, struck Bolich's counterpetition and determined that Jameison
had died intestate.
¶9 On October 15, 1997, Schmidt moved for summary judgment on the grounds that
Bolich did not have the specific power of attorney required to create the Jameison Trust
and there was no evidence of Jameison's intent to create the Jameison Trust since the Trust
Agreement and the conveyance documents were signed solely by Bolich and not by
Jameison. The District Court denied Schmidt's motion on the basis that genuine issues of
material fact existed regarding whether Jameison intended to create the Jameison Trust
and authorized Bolich to do so on her behalf, and that Bolich should have an opportunity
to present evidence.
¶10 Schmidt deposed Bolich and renewed her motion for summary judgment. After full
briefing, the District Court issued its Opinion and Order. The court observed that the case
had not progressed substantially since its ruling on Schmidt's original motion for summary
judgment. It determined that Schmidt had satisfied her burden of establishing the absence
of genuine issues of material fact, Bolich's assertions regarding Jameison's intent were
purely speculative and Bolich had failed to produce any evidence substantiating her claim
that Jameison intended to create the trust. Concluding the general power of attorney did
not specifically authorize Bolich to create the trust and she exceeded her authority in doing
so, the court invalidated the Jameison Trust. Finally, the District Court ordered the
Jameison Trust terminated and the proceeds distributed pursuant to the laws of intestacy.
Bolich appeals.
STANDARD OF REVIEW
¶11 We review a district court's ruling on a motion for summary judgment de novo, using
the same Rule 56(c), M.R.Civ.P., criteria applied by the district court. Matter of Estate of
Bolinger (1997), 284 Mont. 114, 117, 943 P.2d 981, 983 (citation omitted). Under Rule 56
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(c), M.R.Civ.P., summary judgment is proper when no genuine issues of material fact
exist and the moving party is entitled to judgment as a matter of law. We review a district
court's conclusions of law to determine if the court's interpretation of the law is correct.
Estate of Bolinger, 284 Mont. at 118, 943 P.2d at 983 (citation omitted).
DISCUSSION
¶12 Did the District Court err in granting summary judgment to Schmidt, declaring
the Jameison Trust invalid and terminating it?
¶13 The case before us involves the law of trusts and the law of agency. Both are largely
matters of statute in Montana.
¶14 Subject to other statutory provisions, a trust may be created by
(1) a declaration by the owner of property that the owner holds the property as
trustee;
(2) a transfer of property by the owner during the owner's lifetime to another person
as trustee;
(3) a testamentary transfer of property by the owner to another person as trustee;
(4) an exercise of a power of appointment to another person as trustee; or
(5) an enforceable promise to create a trust.
Section 72-33-201, MCA. In addition, a trust is created only if "the trustor properly
manifests an intention to create a trust," "there is trust property" and "there is a
beneficiary." Sections 72-33-202, 72-33-203 and 72-33-206, MCA. Finally, while a trust
may become valid by operation of law in some circumstances, trusts generally are not
valid--even where created as required by statute--unless evidenced
(1) by a written instrument signed by the trustee, or by the trustee's agent if
authorized in writing to do so; [or]
(2) by a written instrument signed by the trustor, or by the trustor's agent if
authorized in writing to do so[.]
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Section 72-33-208, MCA.
¶15 An agent--including an attorney-in-fact--is one who represents another, called the
principal, in dealings with third persons. Sections 72-1-103(1) and 28-10-101, MCA. An
agent may be authorized to do any acts the principal might do, except those to which the
principal must give his or her personal attention. Section 28-10-105, MCA. Moreover, the
authority for an agent to enter into a contract required by law to be in writing can be given
only by an instrument in writing. See § 28-10-203, MCA.
¶16 Here, Bolich first asserts that she executed the Jameison Trust Agreement as
Jameison's attorney-in-fact under the Power of Attorney Jameison granted her in 1986. As
a result, she contends that the Trust Agreement meets the § 72-33-208(2), MCA,
requirement that the trust be evidenced by a written instrument signed by herself as
Jameison's agent under the written authority contained in the Power of Attorney. Her
analysis is flawed.
¶17 As outlined above, the Legislature provided separately within the law of trusts for
creating a trust and making a trust valid. Thus, we first consider whether the Jameison
Trust was properly created because, if not, questions regarding validity under § 72-33-208,
MCA, do not arise.
¶18 Reviewing the means of creating a trust set forth in § 72-33-201, MCA, it is clear that
only the method set forth in subsection (2), which requires the property owner to transfer
the property to another person as trustee during the owner's lifetime, is applicable here in
determining whether the Jameison Trust was properly created. Jameison, as the owner, did
not personally transfer her real or personal property to Bolich, as trustee. She did so, if at
all, through Bolich's act of executing the conveyance documents as Jameison's attorney-in-
fact under the Power of Attorney. Therefore, we must determine whether the Power of
Attorney authorized Bolich to convey Jameison's property to herself as trustee.
¶19 Powers of attorney generally are construed by the rules governing the interpretation of
written instruments. McLaren Gold Mines Co. v. Morton (1950), 124 Mont. 382, 390, 224
P.2d 975, 979. These rules require that, when possible, the parties' intent with regard to the
authority granted be ascertained from the writing alone. McLaren Gold Mines, 124 Mont.
at 390, 224 P.2d at 979. In doing so, "[t]he words used in the writing are to be understood
in their ordinary and popular sense, rather than according to their strict legal meaning,
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unless used by the parties in a technical sense, or unless a special meaning is given to them
by usage, in which case the latter must be followed." McLaren Gold Mines, 124 Mont. at
390, 224 P.2d at 979. In addition, "[w]here power is conferred on an agent by a power of
attorney, the meaning of general words in the instrument is restricted by the context and
construed accordingly and the authority given is construed strictly, so as to exclude the
exercise of any power that is not warranted either by the terms actually used or as a
necessary means of executing with effect the authority given." 3 Am. Jur. 2d Agency § 32
(1986); see also In re Nix's Estate (1923), 66 Mont. 559, 565-66, 213 P. 1089, 1091
(citations omitted).
¶19 In McLaren Gold Mines, we observed that the power of attorney at issue manifested
the principal's specific intent--to operate, acquire and dispose of his mines and mining
properties through his attorney-in-fact. McLaren Gold Mines, 124 Mont. at 391, 224 P.2d
at 980. Considering that power of attorney in the context of the practices of the mining
industry, we determined the power of attorney granted the attorney-in-fact the authority to
grant an option to purchase within the powers to sell or lease a mine. See McLaren Gold
Mines, 124 Mont. at 392, 224 P.2d at 980.
¶20 The Power of Attorney in the present case differs significantly from that in McLaren
Gold Mines. Indeed, Bolich does not dispute that the Power of Attorney Jameison granted
her is a "general" power of attorney. It grants her broad, but general, powers to act for
Jameison in all matters affecting Jameison's business or property, including such powers
as acting on Jameison's behalf in all past or current business, and executing and
acknowledging contracts, deeds and writings. The Power of Attorney does not specifically
grant the authority to create a trust, reflect Jameison's intent to create a trust, or even
mention a trust. Therefore, Bolich's transfer of Jameison's property to herself as trustee for
purposes of creating a trust pursuant to § 72-33-201(2), MCA, is not warranted by the
terms actually used in the Power of Attorney or as a necessary means of executing other
authority. We conclude, therefore, that the Power of Attorney does not authorize Bolich to
transfer Jameison's property to herself as trustee and, as a result, the Jameison Trust was
not properly created.
¶21 Bolich argues that a genuine issue of material fact exists regarding Jameison's intent
to create the Jameison Trust. Therefore, according to Bolich, summary judgment was
improper.
¶22 The record before us is clear that Jameison's intent with respect to the creation of the
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Jameison Trust is in dispute. Her intent is not, however, an issue of material fact.
"Material issues of fact are identified by looking to the substantive law governing the
proceeding." Matter of Estate of Lien (1995), 270 Mont. 295, 299, 892 P.2d 530, 532
(citation omitted).
¶23 As discussed above, several criteria are necessary for the creation of a trust. One, as
Bolich correctly contends, is that "the trustor properly manifests an intention to create a
trust." Section 72-33-202, MCA. However, the "transfer of property by the owner during
the owner's lifetime to another person as trustee" is an additional, separate requirement for
the creation of a trust. Section 72-33-201(2), MCA. We concluded above that Bolich
lacked authority to transfer Jameison's property to herself as trustee and, therefore, the
Jameison Trust was not created by one of the methods set forth in § 72-33-201, MCA. As
a consequence, a factual dispute regarding an additional requirement for creating the
Jameison Trust--namely, whether Jameison properly manifested an intention to do so--is
not an issue of material fact in this case.
¶24 Bolich's other contentions require little discussion. She argues that the Jameison Trust
is valid under subsection (1) of § 72-33-208, MCA, because it was evidenced by a written
instrument which she signed as trustee, and under subsection (2) of § 72-33-208, MCA,
because it was evidenced by a written instrument she signed as Jameison's agent under the
written authority granted her in the Power of Attorney. As discussed above, however, § 72-
33-208, MCA, assumes the proper creation of a trust and adds a requirement to render the
trust valid. Having concluded above that the Jameison Trust was not properly created in
the first instance, it cannot be made valid by meeting the requirements of § 72-33-208,
MCA. A mere signature on a written instrument cannot breathe life into a nonexistent trust.
¶25 Finally, Bolich argues that, even if she exceeded her authority under the Power of
Attorney, Jameison ratified her act of executing the Jameison Trust Agreement by
accepting the benefit of the Jameison Trust. This argument also fails, because § 28-10-
211, MCA, permits ratification "only in the manner that would have been necessary to
confer an original authority for the act ratified or, whenever an oral authorization would
suffice, by knowingly accepting or retaining the benefit of the act." Trusts ordinarily are
required to be evidenced by a writing. Section 72-33-208, MCA. Thus, § 28-10-211,
MCA, requires that any ratification by Jameison of Bolich's act of executing the Jameison
Trust Agreement must be in writing. Consequently, since oral authorization of Bolich's
actions in executing the Trust Agreement would not suffice, ratification cannot be
accomplished under § 28-10-211, MCA, by Jameison knowingly accepting the benefits of
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the Jameison Trust.
¶26 We hold that the District Court correctly concluded that Bolich exceeded her authority
in creating the trust. As a result, we further hold that the court did not err in granting
summary judgment to Schmidt, declaring the Jameison Trust invalid and terminating it.
¶27 Affirmed.
/S/ KARLA M. GRAY
We concur:
/S/ JAMES C. NELSON
/S/ JIM REGNIER
/S/ TERRY N. TRIEWEILER
/S/ WILLIAM E. HUNT, SR.
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