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McGathey v. Davis

Court of Appeals of Missouri, Western District, Third Division

February 3, 2015

BOYD MCGATHEY, ET AL., Respondents,
v.
MATTHEW K. DAVIS TRUST, Appellant

Page 868

Appeal from the Circuit Court of Jackson County, Missouri. The Honorable Edith Messina, Judge.

Martin M. Meyers and Leonard A. Stephens, Kansas City, MO, for respondents.

Daniel P. Wheeler and Scott K. Martinsen, Overland Park, KS, for appellant.

Before Division Three: Karen King Mitchell, Presiding Judge, Cynthia L. Martin, Judge and Gary D. Witt, Judge. All concur.

OPINION

Cynthia L. Martin, Judge.

Page 869

This is an appeal from a judgment entered in a garnishment proceeding which ordered garnishees Roger Hoyt (" Hoyt" ) and Country Club Trust Company, N.A. (" Country Club Trust Company" ) (collectively the " MKD Trustees" ), in their capacity as the trustees of the Matthew K. Davis Trust (" MKD Trust" ), to pay $105,000 into the Court following the determination of exceptions to garnishment interrogatory answers filed by Boyd McGathey and Debra Augustine (collectively " Garnishors" ). The MKD Trustees argue that the trial court erred in denying their motion for summary judgment addressing Garnishors' exceptions.

Because the MKD Trustee's point relied on preserves nothing for our review, we dismiss this appeal.

Factual and Procedural History

On September 12, 2007, Garnishors won a $500,000 judgment against Matthew K. Davis (" Davis" ) following a jury trial. While trying to satisfy the judgment, Garnishors learned that Davis was the beneficiary of two trusts: the May Development Trust (" May Trust" ) and the MKD Trust. Davis's father (" Grantor" ) created the trusts in a single Trust Agreement which provides the terms for each trust.[1]

Article III of the Trust Agreement addresses the May Trust and provides that the May Trust shall hold and administer May Development Company stock and real estate--a building and parking lot--located at 4325 Troost (the " May Trust Assets" ) for a period of up to fifteen years after the Grantor's death. May Development Company employee Jim Henson

Page 870

(" Henson" ) was named the initial trustee of the May Trust. Article III, Section B, of the Trust Agreement requires Henson to make monthly payments to Davis " during the life of the trust" in an amount equal to the monthly rental income generated from the building and parking lot less any taxes due from either the May Trust or Davis (the " Mandatory Distribution" ). After taxes, the Mandatory Distribution totaled $5,000 each month. Article III, Section C, of the Trust Agreement provides in pertinent part that " [u]pon the death or resignation or failure to act hereunder of Jim Henson, [the May Trust] shall be merged into and be operated as a part of the [MKD Trust] under Article V [of the Trust Agreement]."

Article V of the Trust Agreement addresses the MKD Trust and provides that the MKD Trust will hold the remainder of the Grantor's " trust estate" (the " MKD Trust Assets" ). The Trust Agreement names Hoyt and Country Club Trust Company as the MKD Trustees. Article V provides in pertinent part:

The [MKD] Trustee, in its sole discretion, may make distributions to or for the benefit of Matthew K. Davis only at such times the rental income equivalent from the property located at 4325 Troost and its adjacent parking lot are not being made or are insufficient to attend to health, education, maintenance, and support of Matthew K. Davis. In such event, the discretionary payments shall not exceed the greater of the trust income or five thousand dollars ($5,000) per month.

Article V thus permits the MKD Trustees to make discretionary distributions to Davis from the MKD Trust Assets, but only if the Mandatory Distribution from the May Trust is not being made or is insufficient to support Davis. Article V does not explain the circumstances that could give rise to the Mandatory Distribution " not being made."

Article VIII, which applies to both the May Trust and the MKD Trust, contains a spendthrift clause that provides:

To the extent permitted by law, none of the beneficiaries hereunder shall have any power to dispose of or to charge by way of anticipation or otherwise any interest given to such beneficiary; and all sums payable to any beneficiary hereunder shall be free and clear of debts, contracts, alienations and anticipations of such beneficiary, and of liabilities for levies and attachments and proceedings of any kind, at law or in equity. . . .

Article IX, which also applies to both the May Trust and the MKD Trust, includes a resignation clause that provides " [a]ny Trustee at any time acting hereunder is authorized to resign from that office at any time, without any reason, by delivering an acknowledged instrument to that effect to the adult or otherwise legally competent beneficiaries. . . ." The Trust Agreement defines " acknowledged instrument" as " a written instrument executed in the presence of two subscribing witnesses, or otherwise acknowledged or proved with the formalities required to permit recording of a deed of real property in the State in which Grantor is domiciled at his death."

From March 25, 2011, to November 22, 2011, Garnishors requested that Writs of Garnishment with interrogatories be issued to Henson in his capacity as trustee of the May Trust. Garnishors were successful in capturing four Mandatory Distributions to Davis, totaling $20,000.

On March 16, 2012, Garnishors requested that another Writ of Garnishment with interrogatories be issued to Henson. Henson then sent a letter to the MKD Trustees dated April 30, 2012, stating that he was resigning as trustee of the May Trust

Page 871

effective immediately.[2] Henson thereafter answered the interrogatories and informed Garnishors that he had resigned as trustee ...


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