In re Appeal of the Trustees of the Marjorie T. Palmer Trust Lorelei Kjelleren and Loren T. Palmer, Appellants
Appeal from Superior Court, Chittenden Unit, Civil Division
Robert A. Mello, J.
W. Lange of Lange Law Offices, Vergennes, for Appellants.
Michael D. Johnson of Johnson & Finnigan, LLP, and
Sheldon M. Katz, South Burlington, for Appellee.
PRESENT: Reiber, C.J., Skoglund, Robinson, Eaton and Carroll,
1. This appeal stems from a probate order approving a special
master's proposed division of real property owned by a
trust. The trustees of the Marjorie T. Palmer Trust appealed
the probate order to the civil division, which granted
summary judgment in favor of appellee David C. Palmer, a
beneficiary of the trust. On appeal to this Court, the
trustees claim the civil division erred in denying their
motion for appellee to undergo genetic testing, improperly
limited the scope of their appeal from the probate division
to three of the seven issues presented in their statement of
questions, and erred in granting appellee's nonconforming
motion for summary judgment on those three issues. We affirm
the majority of the civil division's conclusions but
reverse in part for it to consider one of the issues raised
in the trustees' statement of questions that it declined
2. Marjorie T. and Loren F. Palmer executed a trust agreement
in July 1992. Loren died sometime before August 2000; the
record is unclear as to the precise date of his death.
Marjorie died in October 2001, at which point the trust
became irrevocable. The trust agreement appointed
Marjorie's three children, Loren T. Palmer, Lorelei
Kjelleren, and David F. Palmer, as co-trustees. David F.
Palmer died in February 2011, leaving Loren T. Palmer and
Lorelei Kjelleren to serve as the trustees.
3. This litigation began in November 2012, when David F.
Palmer's son and sole heir, David C. Palmer, filed a
petition in probate division to open a trust estate as well
as a motion to remove and replace the trustees. He alleged the
trustees had mismanaged trust property and refused to provide
him with a current copy of the trust agreement.
4. The trust owns approximately 143 acres of contiguous
property in the towns of Charlotte, Shelburne, and Hinesburg,
Vermont. Approximately 101 acres are in Charlotte, 10 acres
are in Shelburne, and 32 acres are in Hinesburg. Much of the
property has historically been used for maple sugaring and
the parties apparently agree that Marjorie Palmer wanted to
preserve a large portion of the land for that use. For
several years, the trustees have leased portions of the
property to David Palmer and to the son of trustee Loren
Palmer for their separate sugaring operations.
5. Following her husband's death, Marjorie Palmer amended
the trust agreement twice, in August 2000 and February 2001.
The second amended trust agreement provides as follows:
The Trustees shall distribute to each of the Settlor's
grandchildren who, at the time of the Settlor's death,
have not been given a building lot in Hinesburg, Vermont by
the Settlor, the Settlor's husband, Loren [F.] Palmer, or
the Trustees, at the election of each such grandchild, either
the sum of Thirty Thousand Dollars ($30, 000) or one (1)
building lot as hereinafter defined. . . . Any grandchild who
elects to receive a building lot pursuant to this provision
shall make such election in writing to the Trustees to
receive one (1) building lot to be selected by the Trustees.
The Trustees shall give due consideration to any specific
requests made by a grandchild with respect to the size and
location of such building lot, but shall not be bound by such
requests and may make such selection based upon such factors
as the Trustees, in their sole discretion, deem relevant.
Such election shall be made within one year of the
Settlor's death. Failure by a grandchild to make such an
election within such time period shall be conclusively deemed
an election to receive Thirty Thousand Dollars ($30, 000) in
lieu of a building lot. For the purpose of this Trust
Agreement, a "building lot" shall mean a five to
ten acre parcel of land located in Hinesburg, Shelburne, or
Charlotte, Vermont with a building site to be used by such
grandchild for a personal residence, such building lot to be
located on land held in the Trust Fund by the Trustees.
separate provision stated that the trustees "may
require, as a condition of such gift that each such
grandchild agree in writing to construct a dwelling house on
such parcel which will be used as his or her principal
residence." The trust provided that after distribution
of the building lots and payments, the remaining trust
property would be divided into equal shares and distributed
to the beneficiaries. Under the current circumstances, Loren
T. Palmer, Lorelei Kjelleren, and David Palmer (as the
surviving son of David F. Palmer) are each to receive one
6. At the time Marjorie Palmer executed the second amended
trust agreement, three of her seven grandchildren had already
received building lots. A fourth grandchild subsequently
selected a building lot in Hinesburg and proceeded to build
his principal residence, and a fifth took a payment in lieu
of a building lot. The two remaining grandchildren, David
Palmer and Mark Palmer, notified the trustees within a year
of Marjorie's death in 2001 that they wanted a building
lot. However, no action was taken on their requests.
7. In 2012, David Palmer identified a specific parcel in
Shelburne that he wanted for his building lot. The trustees
rejected his proposed lot because it was a portion of the
property that the trustees intended to be the subject of a
sale of a conservation easement to the Vermont Land Trust
(VLT). The trustees offered him a building lot in Hinesburg
8. In April 2014, the trustees entered into a purchase and
sale agreement with the VLT for the development rights to the
111 acres owned by the trust in Charlotte and Shelburne. The
trustees were unable to obtain David Palmer's consent to
the sale of the development rights, and the agreement
expired. This prompted the probate division to appoint Craig
Matanle, Esq., as successor trustee for purposes of a
determining a fair and equitable division of the 111 acres in
Charlotte and Shelburne if the parties were unable to reach
agreement by December 2014. No agreement was reached, and in
January 2015, the probate division appointed Matanle as
trustee of the 111-acre property for purposes of managing it
and recommending an equitable division to the court.
9. Under this initial order, Matanle's role was limited
to dividing the 111-acre property in Charlotte and Shelburne.
The probate division ordered that Lorelei Kjelleren and Loren
Palmer would remain as trustees for the purpose of managing
and ultimately distributing the balance of the trust estate.
The probate division did not address the fact that grandchild
Mark Palmer had not yet received a building lot, apparently
because, according to its November 2014 order, he wished at
that time to receive a $30, 000 payment instead.
10. In March 2015, the probate division issued an order
approving the trustees' decision to assign David Palmer a
building lot in Hinesburg. The Hinesburg building lot is not
part of the 111-acre property that the trustees intended to
conserve. The order required Palmer to begin the permitting
process at his own expense and stated that if he did not
finish building a primary residence on the lot by May 2020,
he would be required to pay the value of the land back to the
trustees less $30, 000.
11. Meanwhile, following his appointment as trustee, Matanle
met with the parties, toured the trust property, and spoke
with representatives from the VLT and the Charlotte Land
Trust. He also hired a forester to prepare a report on the
number of maple tree taps and recommend an equitable division
of the 111-acre property. Based on the forester's report
and his investigation, Matanle proposed to the parties in
June 2015 that David Palmer be given the northern section of
the property, which was contiguous with the Hinesburg
building lot and another property he owned.
12. The trustees objected to the proposal. Among other
reasons, they argued that according to an engineering report
they had commissioned, the Hinesburg lot they had offered to
David Palmer could not actually be developed. The engineering
firm reported in August 2015 that "the areas under
investigation on the Palmer Property are not considered
suitable for any type of on-site wastewater system"
according to state regulations. The trustees provided this report
to Matanle, who asked the probate division to hold a hearing
to address whether the Hinesburg lot should still be conveyed
to David Palmer, as it potentially impacted the division of
the 111-acre property in Charlotte and Shelburne.
13. At a hearing in December 2015, Palmer told the court that
he still wanted the Hinesburg lot assigned to him by the
trustees and would find a way to install a wastewater system.
The trustees continued to oppose giving him the Hinesburg
lot. The court indicated that despite the trustees'
concerns over wastewater, it seemed reasonable to convey the
lot to Palmer if he still wanted it.
14. Following the hearing, the probate division appointed
Matanle as special master pursuant to 4 V.S.A. § 363 and
Vermont Rule of Probate Procedure 53 "with authority to
address all outstanding issues relative to the division of
the [111-acre] property and David Palmer's building
lot." The court did not ...