S-25-0665, S-25-0666, and S-25-0667 Dustin L. Paxton (Appellee) v. Linda K. Paxton, Individually and as Personal Representative of the Estate of Ronald A. Paxton, Linda K. Paxton, Trustee of the Ronald A. Paxton QTIP Trust, and Arlan Paxton (Appellants)
Appeal from the District Court for McPherson County, Judge Michael E. Piccolo
Attorneys: Terrance O. Waite, William K. Rounsborg, Daniel J. Greco, and Christine E. Seck (Waite & McWha for Appellants) and Kurt Dam Arganbright and Warren R. Arganbright (Arganbright Law Office, L.L.C. for Appellee)
Civil: Modification of trust
Proceedings below: The district court determined that all beneficiaries of the Ronald A. Paxton QTIP Trust consented to a modification of the trust. Because the district court had previously determined that the negotiated terms of a mediated settlement memorandum were enforceable, the district court sustained Appellee’s petition to modify the trust and dismissed all other pending lawsuits. On its own motion, the Nebraska Supreme Court ordered this case to be transferred from the docket of the Nebraska Court of Appeals to its docket.
Issues: Appellants assign the following errors: 1) The trial court erred in conducting proceedings in an action for removal of trustee, trust accounting and recoupment of trust property without first joining or causing to be joined an indispensable party: Dana (Paxton) Epley, settlor’s daughter and remainder co-beneficiary; 2) The trial court erred in ordering the parties to mediate the issues of trustee removal, trust accounting and recoupment of trust property without first joining or causing to be joined an indispensable party: i.e., Dana Epley, settlor’s daughter and remainder co-beneficiary; 3) The trial court erred in relying on its 2022 order enforcing the memorandum to establish the summary judgment predicate fact of unanimous consent to trust modification, where that proceeding was void for lack of an indispensable party; 4) The trial court erred in failing to make its own independent finding, under Neb. Rev. Stat. § 30-3837(b), that the proposed trust modification did not violate a material purpose of the Ronald A. Paxton QTIP Trust (hereinafter “Trust”); 5) Arguing in the alternative as if the trial court did make, adopt or renew a § 30-3837(b) finding that the proposed trust modification did not violate a material purpose of the Trust, that finding was made in error; 6) Whether a trust modification is inconsistent with a material trust purpose is a fact to which the parties cannot stipulate or agree, or in the alternative, it is a question of law; 7) Arguing in the alternative as if any such stipulation or agreement could bind the court, the trial court erred in finding an implied agreement that the proposed trust modification did not violate a material purpose of the Trust; 8) The trial court erred in allowing the memorandum to act as an irrevocable consent to the modification of a non-charitable, irrevocable trust; 9) The trial court erred in granting summary judgment in favor of trust modification, over the objection of beneficiaries, without making a finding that the interest of each non-consenting beneficiary was adequately protected; 10) Where a court lacks subject matter jurisdiction and orders the parties to mediate the controversy, it is error to find any instrument resulting from the wrongfully compelled mediation to be a binding contract with which the parties are obligated to comply; 11) Assuming, arguendo, that there was a viable finding the memorandum was an enforceable agreement, such finding was error; and 12) Still arguing in the alternative as if the memorandum was an enforceable settlement agreement, the trial court erred in failing to consider whether the words and conduct of the parties, subsequent to the execution of the memorandum, negated that agreement.