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Maxine S. Lane v. Linda Caler

April 23, 2013


APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DV 11-883 Honorable Edward P. McLean, Presiding Judge

The opinion of the court was delivered by: Justice Jim Rice

Submitted on Briefs: February 13, 2013

Decided: April 23, 2013



Justice Jim Rice delivered the Opinion of the Court.

¶1 Maxine S. Lane (Maxine or Beneficiary) appeals from the order of the Fourth Judicial District Court granting summary judgment in favor of Linda Caler (Linda or Trustee). We affirm, and address the issue:

¶2 Did the District Court correctly interpret the Maxine Lane Irrevocable Trust to require the Trustee to distribute $100,000 to Maxine's brothers when the trust property was sold during Maxine's lifetime?


¶3 In 2003, with her mother's contribution of the $50,000 down payment, Maxine was able to purchase a residence (the Property, house or residence) located in the Rattlesnake area of Missoula, where she lived until the Property was sold in July 2011. Maxine's remaining debt for the Property's purchase was originally secured by a fixed-rate mortgage, but she refinanced the debt with an adjustable-rate mortgage in 2004. When the interest rate spiked in 2007, Maxine was unable to continue to make the monthly mortgage payments.

¶4 Maxine's family stepped in to help her keep the house. Her mother paid off the remaining $203,278.23 owed against the Property, leaving the title free and clear. Maxine transferred title of the Property to the newly created Maxine Lane Irrevocable Trust (the Trust). The Trust strictly prohibited any encumbrances on the Property. The Trust Agreement provided that if the Property was sold during Maxine's lifetime, $50,000 was to be paid to each of Maxine's brothers, Homer J. Steiner III (Homer) and Karl Frederick Steiner (Karl), or a total payment of $100,000. Maxine's daughter, Linda, was named as the Trustee of the Trust, Maxine was its sole beneficiary, and the Trust's sole asset was the Property. The Trust's only source of income was rent paid by Maxine and other tenants who lived in the Property, and this income was used for repair and maintenance.

¶5 In 2009, the house's septic system began backing up. A septic company cleared the blockage, which prevented further backups so long as Maxine strictly monitored her water use. To permanently fix the problem, Linda suggested connecting the house to the city sewer system. However, at this point, the Trust funds were depleted because Maxine had stopped paying rent and the tenants had moved out. Maxine's other daughter, Jackie, offered to make an interest-free, unsecured loan to the Trust to finance the sewer work. Jackie required no loan payments, asking only that the loan be repaid without interest when the house was sold, but did attach two conditions for the loan: (1) that Maxine comply with the Missoula City Ordinance governing the number of dogs allowed on the Property, and (2) that Maxine keep no more than four dogs on the Property even if the City permitted her to keep more. Jackie and Linda expressed concern that tenants would not be willing to rent rooms if Maxine continued to keep eight to twelve dogs in the house as she had in the past.*fn1 Maxine rejected Jackie's loan offer in favor of keeping the dogs. Because the Trust prohibited any encumbrances on the Property, no commercial lender was willing to make an unsecured loan to cover the sewer work.

¶6 From January 2010 until the Property was sold in July 2011, Maxine lived in the house but did not pay rent. Because the Trust had no funds, Maxine's mother and daughters contributed funds to the Trust to pay the property taxes and homeowner's insurance for the Property. Maxine acknowledged that the house needed repairs for which the Trust lacked funds. In 2011, she agreed to move out and consented to the sale of the Property. The Property sold, and the Trust received $176,469.16 in net proceeds. Maxine's desire was that the proceeds of the sale would be used to purchase a new house for her. However, the Trustee indicated she was obligated to first make the $50,000 distributions to Homer J. Steiner III and Karl Frederick Steiner as stated in the Trust, and then use the remaining proceeds for Maxine's support. Maxine objected to the distributions. In the meantime, Maxine moved into a rental unit. The Trust paid for Maxine's moving expenses, rental of a storage unit, the security deposit, and continues to pay her monthly rent.

¶7 On July 6, 2011, Maxine filed a declaratory judgment action in the District Court against Linda, in her capacity as Trustee.*fn2 Maxine asked the court to determine whether the Trust required the sale proceeds to be used to purchase another residence for ...

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