ANALYSIS OF MARCH 12, 2020 SUPREME COURT OPINIONS

(Posted March 12, 2020) The Supreme Court of Virginia announces two new rulings this morning.

Trusts

The court takes up the question whether filing a declaratory-judgment action to interpret a trust provision triggers a no-contest forfeiture. The case is Hunter v. Hunter.

A person we’ll call Mom created a living trust late in her life, directing that her husband was the primary beneficiary. Contingent beneficiaries, each entitled to one third of the trust corpus, were her son, daughter, and granddaughter. The trust contained a clause that disinherited any beneficiary who contests the trust, further defining a contest as taking “any action seeking to invalidate, nullify, set aside, render unenforceable, or otherwise avoid the effect of” the trust.

Mom’s husband died two years before she did. Upon her passing in 2015, the daughter, named in Mom’s trust as co-trustee, sent her brother a brokerage statement showing a significant decline in assets from 2009 to 2015. That didn’t seem right to the son; the stock market had rebounded quite nicely in that post-recession period. The difference in value was millions of dollars. He asked his sister for more financial details.

He got a letter in return, not from his sister but from a lawyer. The letter asserted that the sister had no obligation to give any further information because the trust also contained a provision waiving the trustee’s statutory duties to report.

Now the son has to walk a tightrope. He could swallow hard and accept whatever his sister decided, or he could file a lawsuit and risk violating the no-contest clause. If he triggered that, even by accident, he’d wind up with one-third of nothing.

The son wisely hired a very smart lawyer who filed a well-crafted, sophisticated pleading. It contained two counts. Count 1 asked the court to determine whether a DJ action seeking interpretation of the trust violated the no-contest clause. If the court were to find that it did, that would be the end of things. But if the court were to decide that an interpretive request was permissible, Count 2 sought an interpretation of certain provisions relating to the trustee’s duties. The pleading asked for a ruling on Count 2 “if, and only if,” the court found in the son’s favor on Count 1.

The circuit court construed the pleading as a whole instead of count-by-count, and determined that it was indeed a trust contest. The court entered judgment for the daughter, ruling that the son would take nothing under the trust.

The Supreme Court today unanimously reverses and remands the case for further proceedings. Courts enforce no-contest clauses strictly, Justice Kelsey tells us today, but construe them narrowly. This is because they impose a forfeiture for the sin of seeking to enforce one’s rights. And age-old caselaw holds that “equity abhors a forfeiture.”

The Supreme Court rules today that the son’s DJ complaint carefully tracks a path that the SCV has previously found does not trigger a no-contest provision in the context of wills; today the court applies that to trusts as well. Asking a court to decide what trust language means isn’t the same as asking that court to invalidate that language.

On remand, the circuit court will get the first crack at that interpretation. I’m a little surprised that the justices didn’t go ahead and make this judgment call, since they can read documents just as well as a trial judge can. But they may have felt that some parol evidence might have been admissible to explain Mom’s intention, thereby requiring remand. Regardless, this is a win for the son, who’s back in the game; he now knows that even if the circuit court rules against him, he’ll get 1/3 of something.

One last point: In exploring the long history of no-contest clauses, Justice Kelsey blows the dust off the history books to describe such a clause in a Mesopotamian will from the 13^th Century BCE. My curiosity thus piqued, I did a quick Lexis search on the word Mesopotamia and found zero hits in all reported Virginia cases. This is the first time in our long jurisprudential history that any Virginia jurist has cited the Land Between the Rivers.

Evidence

The Supreme Court also hands down a short published order in a criminal appeal, Wakeman v. Commonwealth. It’s a rape conviction in which a forensic nurse testified about her examination of the victim. The nurse had completed all of the coursework to be certified as a Sexual Assault Nurse Examiner, though she hadn’t taken the test. Satisfied that she still possessed expert-level knowledge, the circuit court allowed her to testify.

After a jury convicted the defendant, he moved to set aside the verdict. He claimed that the court erred in permitting the nurse to testify because she wasn’t certified. The court refused this request, and the Court of Appeals affirmed.

The justices swiftly agree today, handing down a short (1½ pages) order adopting the CAV’s rationale. Rule 2:702(a) requires a certain level of knowledge, but doesn’t require a certification. Since the legislature hasn’t created such a requirement, the circuit court had ample discretion to admit the testimony.