IN THE MATTER OF Trust Created Under the Will of Harold S. Schutt
Submitted: March 1, 2017
Draft Report: March 1, 2017
Submitted after Briefing on Exceptions: May 9, 2017
K. Grossman, Esquire, Richard J.A. Popper, Esquire, and
Curtis J. Crowther, Esquire, of YOUNG CONAWAY STARGATT &
TAYLOR, LLP, Wilmington, Delaware; Attorneys for Petitioners
Charles P. Schutt, Jr., Eliza B. Hurlbut and Caroline B.
William H. Lunger, Esquire, of MARTIN & LUNGER, P.A.,
Wilmington, Delaware; Attorneys for Petitioners Erik F.
Streitwieser, Charles E. Streitwieser, Bernhard T.
Streitwieser and Christiane C. Bunn.
E. Swenson, Esquire, Gregory J. Weinig, Esquire and Daniel R.
Stanek, Esquire, of CONNOLLY GALLAGHER LLP, Wilmington,
Delaware; Attorneys for Respondent Beneficiaries Nathalie
(Strong) Givens, Pamela C. (Strong) Whitmore, Kristine Schutt
Sindelar, Robert Haden, Clifford S. Schutt, Peter A. Rogstad,
Diana J. Bomberg, Christina Rogstad, Lisa Rogstad Blair, Lief
Rogstad, Melinda Rogstad Schaum, Teresa Protzeller-Lewis, Sue
M. Drewry, Timothy Protzeller, Mark Protzeller, Stephen
Protzeller, Michael Protzeller, Thomas R. Protzeller, Bruce
Protzeller, Matthew Stokes, Cynthia Dufour and Barbara
W. Briggs, Jr., Esquire, Todd A. Flubacher, Esquire and
Matthew R. Clark, Esquire, of MORRIS NICHOLS ARSHT &
TUNNELL, LLP, Wilmington, Delaware; Attorneys for Respondent
Co-Trustees Wilmington Trust Company and Christopher Simon.
T. Zurn, Master in Chancery
case presents a dispute between different branches of a
testator's family as to the meaning of trust language
indicating more distant, unnamed relatives would receive the
trust principal before more immediate named relatives. A
testator who intends to leave his estate to persons who are
unidentifiable when he drafts his testamentary documents will
necessarily use language requiring some interpretation to
identify the eventual beneficiaries. In this case, the
testator's more immediate relatives rely on that need for
interpretation to assert an ambiguity that would permit them
to take over the more distant relatives. I conclude that the
trust language at issue is not ambiguous and expresses the
testator's intent to benefit the more distant relatives.
For the reasons that follow, I recommend that the immediate
relatives' motion for summary judgment be denied, and the
distant relatives' motion for summary judgment be
action concerns a trust created under the will of Harold S.
Schutt ("Harold") dated March 17, 1960
("Harold's Trust"). Harold's Trust
terminated when the last income beneficiary died without
issue on June 17, 2013. Upon termination of Harold's
Trust, pursuant to Item VII(g)(2), the balance of the trust
principal was to be paid in equal shares, per stirpes, as
to my then living issue, other than issue of my son, Charles
Porter Schutt by his wife, Phyllis duPont Schutt; or in
default of such issue of mine, shall pay over such principal
in equal shares, per stirpes, to the person or persons who
would have been entitled to inherit the same from me under
the intestate laws of the State of Delaware pertaining to
personal property of mine had I died at the time intestate,
unmarried, possessed of such principal and not survived by
any issue of my said son Charles Porter Schutt by his wife
Phyllis duPont Schutt or by my nephew, David S. Foster, or
any of his issue; or in default of such issue of mine and
such persons, shall pay over such principal to the then
living issue of my said son Charles Porter Schutt by his wife
Phyllis duPont Schutt; or in default of such issue of mine,
such persons, and such issue of my said son, shall pay over
such principal to or for such charitable uses as Trustees
shall in their sole discretion deem appropriate.
only living issue as of June 17, 2013, when the Trust
terminated, are the issue of Charles Porter Schutt by his
wife, Phyllis duPont Schutt ("CPS Beneficiaries").
Petitioners in this action are all CPS Beneficiaries.
Respondents are members of the class Harold defined as
"the person or persons who would have been entitled to
inherit the same from me under the intestate laws of the
State of Delaware, " who I will refer to as
"Intestate Beneficiaries." The Intestate
Beneficiaries are the issue of Harold's first
January 22, 2015, petitioners filed a Verified Petition for
Instructions explaining that the trustees of Harold's
Trust were attempting to identify Intestate Beneficiaries,
and asked the Court to direct distribution of the Trust
principal to the CPS Beneficiaries. The trustees identified
potential Intestate Beneficiaries, and several entered their
appearance. On May 7, 2015, the CPS Beneficiaries filed an
amended petition, naming Intestate Beneficiaries as
respondents and again asking the Court to distribute the
Trust principal to the CPS Beneficiaries. On June 8, 2015,
the co-trustees filed an answer to the amended petition and
asked the Court not to distribute the principal as the CPS
Beneficiaries requested. Notice was given to additional
potential Intestate Beneficiaries, and a larger group of
Intestate Beneficiaries answered the amended petition and
asked the Court to order distribution of the principal under
Delaware's intestacy laws were Harold not survived by any
CPS Beneficiaries. The parties proceeded to discovery.
Beneficiaries filed a motion for summary judgment on November
28, 2016, and the Intestate Beneficiaries responded and filed
their own motion for summary judgment on December 28, 2016.
Each motion asserted Harold's Trust should be interpreted
so that the Trust's remaining principal would be
distributed to the movant. The motions were fully briefed and
oral argument was held on March 1, 2017, where I issued an
oral draft report in favor of the Intestate Beneficiaries.
The CPS Beneficiaries took timely exception, and the parties
briefed those exceptions. This is my final report.
undisputed that the class of intestate heirs Harold described
in his Trust must be bounded in some way, because Harold also
described a third and fourth class of beneficiaries to take
in the event the intestate class failed. It is also
undisputed that Delaware's intestacy laws, both at the
time Harold drafted his Trust and today, do not limit the
degree of consanguinity required for a relative to be an
intestate heir. The CPS Beneficiaries assert that
Harold's class of intestate heirs defined by Delaware law
is problematic because it can never fail, and that the
circumstances under which Harold drafted his Trust create a
latent ambiguity that justifies looking to extrinsic evidence
to interpret and limit Harold's class of intestate heirs.
The Intestate Beneficiaries assert Item VII(g)(2) is not
ambiguous, because even under the intestate laws of the State
of Delaware, the category of intestate heirs is bounded and
may fail. The Intestate Beneficiaries also argue that the CPS
Beneficiaries' extrinsic evidence is too speculative to
require a different interpretation.
judgment is granted where there is no genuine issue of
material fact in dispute and the movant is entitled to
judgment as a matter of law. Where, as here, there are cross
motions for summary judgment and neither party argues that
there is an issue of material fact, the Court considers the
cross motions a stipulation for a decision based on the
issue presented is what Harold intended by Item VII(g)(2).
The standard for determining intent requires the Court to
examine the language of the will as a whole, in light of the
circumstances surrounding its creation. When the terms of the
document are clear and unambiguous, the Court must enforce
the terms as they are written, and cannot consider extrinsic
evidence to interpret those terms. No word or phrase should be
rejected or treated as superfluous, redundant, or meaningless
if it can be given a meaning which is reasonable and consistent
with the object and purpose of the writing considered as a
whole. The Court will prefer an interpretation
that gives effect to each term of an agreement. Where
"extrinsic facts appear which produce or develop a
latent ambiguity not apparent upon the face of the will
itself, since the ambiguity is disclosed by the introduction
of extrinsic facts, the court may inquire into any other
material extrinsic fact or circumstance to which the will
certainly refers, as well as to the relation occupied by the
testator to those facts, to the end that a correct
interpretation of the language actually employed by the
testator in his will may be arrived at."
The draft report concluded Harold's Trust
unambiguously stated Harold's intent that the trust