7ASR3d272

Series: 7ASR3d | Year: () | 7ASR3d272
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DOUGLASS

CRANE (MIKE) KNEUBUHL, MARGARET K. LANDRIGAN, and ALFRED JAMES PRITCHARD

KNEUBUHL, As Trustees and Beneficiaries of the Kneubuhl Trust, Plaintiffs,

 

v.

 

LILIAN

ALA`I and FRANCES OPELLE, Defendants.

________________________________

 

GILIAN

ROBIN KNEUBUHL ROUSH, Intervenor.

 

High

Court of American Samoa

Land

and Titles Division

 

LT

No. 22-01

 

October

3, 2003

 

 

[1] It is

well-established that in order to demonstrate standing, one must show: (1) injury

in fact, by which we mean an invasion of a legally protected interest that is

(a) concrete and particularized, and (b) actual or imminent, not conjectural or

hypothetical; (2) a causal relationship between the injury and the challenged

conduct, by which we mean that the injury fairly can be traced to the

challenged action of the defendant, and has not resulted from the independent

action of some third party not before the court; and ( 3) a likelihood that the

injury will be redressed by a favorable decision, by which we mean that the

prospect of obtaining relief from the injury as a result of a favorable ruling

is not too speculative.  These elements

are the irreducible minimum required by the Constitution.

 

[2] Under

A.S.C.A. § 43.1101, a person is entitled to declaratory relief if he is

“interested under a deed, will or other written, or under a contract, or . . .

desires a declaration of his rights or duties with respect to another, or in

respect to, in, over or upon property.” 

 

[3] In

litigation involving a trust, beneficiaries have standing to protect their

rights and interests.

 

[4] Under

A.S.C.A. § 37.0205, the Legislature has carved out an exception to the

restrictions on land alienation.

 

[5] Under

A.S.C.A. § 37.0205, a Samoan can create a trust for the benefit of a son or

daughter, “in view of legal marriage with a nonnative, or for his son or

daughter already married to a nonnative, or for any of the issue of any such

marriage.” 

[6] In a trust,

trustees hold the legal title to the trust property while the beneficiaries

hold the equitable interest.

 

[7] A trust

does not fail merely because the trustee is incapable of taking title to the

property.

 

[8] A party

waived its right to challenge an agreement when it acquiesces transactions made

pursuant to the agreement.

 

[9]

Acquiescence consists of assent by words or conduct on which the other party

relies.

 

Before

RICHMOND, Associate Justice, SAGAPOLUTELE, Associate Judge, and MAMEA,

Associate Judge.

 

Counsel:          For Plaintiffs, Jeffrey Waller

For

Defendant Lilian Ala’i, David A. Vargas

For

Defendant Frances Opelle, pro se

For

Intervenor, pro se


 

Plaintiffs

Douglass Crane (Mike) Kneubuhl (“Douglass”), Margaret K. Landrigan

(“Margaret”), and Alfred James Pritchard Kneubuhl (“Alfred”) brought this

action to have a lease of trust land by Defendant Francis Opelle (“Francis”) to

Defendant Lilian Ala`I (“Lilian”) declared void or voidable.  Gilian Robin Kneubuhl Roush (“Gilian”)

intervened to challenge Douglass’s standing to sue.

 

UNDERLYING FACTS

 

On August 15,

1960, Adeline Pritchard Kneubuhl (“Adeline”) transferred several parcels of her

individually owned land in American Samoa in trust (“Kneubuhl Trust”) to

William Robert Opelle (“William”), as trustee, with her children Frances K.

Opelle (“Frances”), Benjamin F. Kneubuhl, Jr. (“Benjamin”), John Alexander

Kneubuhl (“John”), Douglass, Margaret, and Alfred as equal beneficiaries.[1]  The Kneubuhl Trust was recorded with the

Territorial Registrar on August 24, 1960. 

Effective on September 30, 1969, all parties to the Kneubuhl Trust

agreed to partition the beneficial interests in particular trust land among the

six beneficiaries (“Partition Agreement”). 

Specifically, the Partition Agreement 1) divided the parcel of the land

“being portions of Olo, Tagaua`a, Puapua, Lesea and Aso To`elau” among the

trust beneficiaries and 2) conveyed part of a portion of the trust land known

as “Malaloa” to Frances.  The Partition

Agreement was recorded with the Territorial Registrar, but not until July 10,

1995. 

 

On October 31,

1974, all parties, John excluded, attempted to again modify the trust

(“Modification Agreement”).[2]  The Agreement purported to give Frances

exclusive rights to use a portion of the trust called “Malaloa” and appoint her

as successor trustee over that portion. 

In addition, the Modification Agreement instructed William to “appoint

each beneficiary as a successor trustee over that portion of the corpus of the

trust called “Olo” as described in the Partition Agreement.  William also was to appoint Alfred as the

successor trustee for the remaining portion of the property held in trust.

 

Also in 1974, five

of the six beneficiaries, John excluded, signed a Land Planning Agreement

pertaining to contiguous parcels within the partitioned trust land known as

“Olo.”  The Land Planning Agreement

contained the following relevant provisions: 1) reserved the area for

single-family homes within minimum sites of 50,000 square feet; 2) required

written approval of a majority of the trustees for any development of the land;

3) required approval of a majority of the trustees for any rental of any

portion of the land or improvements on the land to anyone not a trustee; and 4)

limited any rental agreement to no more than a one-year term.  The Land Planning Agreement has not been

recorded with the Territorial Registrar.

 

On December 31,

1979, Frances leased to Priscilla Moors Muench (“Priscilla”) and Lawrence R.

Moran (“Lawrence”) approximately 1.6 acres (approximately 69,600 square feet)

of the “Olo” trust land partitioned to Frances for a term of 35 years,

commencing upon completion of construction of a residence on the leased land or

June 30, 1980, whichever occurred first. 

This lease agreement (“Lease Agreement”) was recorded with the

Territorial Registrar on March 24, 1980.

 

Under the Lease

Agreement, Priscilla and Lawrence retained title to their improvements on the leased

land.  However, the Lease Agreement gave

Frances the right to purchase the improvements, at depreciated value at the

time of acquisition, within five years after the demise of Priscilla and

Lawrence.  Both Priscilla and Lawrence

were deceased as of May 13, 1984.

 

On November 19,

1984, Frances assigned to Suhayl Ala`i (“Suhayl”) her right to purchase the

improvements, and on April 16, 1985, this Court authorized the administrators

of Lawrence’s estate to sell the improvements to Suhayl.  On December 11, 1986, the Lease Agreement

with certain amendments was transferred to Suhayl as lessee (“Lease

Transfer”).  The Lease Transfer amended

amended the Lease Agreement to grant Suhayl the option to renew the Lease

Agreement for another term of 30 years. 

The improvement purchase provision was also revised to provide that

Suhayl’s successors become the lessees upon his death and that Frances is

obligated to purchase the improvements, at fair market value, should either

Suhayl’s executor elect to terminate the Lease Agreement or should the Lease

Agreement terminate before the lease term expires.  The Lease Transfer was recorded with the

Territorial Registrar on December 12, 1986.

 

Suhayl died in

1995.  Lilian, his surviving spouse,

inherited the leasehold under the Lease Agreement as an asset of the estate

pursuant to the Court’s distribution order. 

On April 25, 1997, the Lease Agreement was amended to formally

substitute Lilian as the lessee (“Lease Amendment”).  The Lease Amendment has not been recorded

with the Territorial Registrar.

 

Plaintiffs seek

to declare the Lease Agreement, Lease Transfer, and Lease Amendment void or

voidable because they have not been approved by a majority of the trustees as

required by the Land Planning Agreement.

 

Other facts

pertaining to particular issues will be set forth in the discussion below.

 

DISCUSSION

 

A. Standing

to Sue

 

Gilian

specifically challenges Douglass’s standing to sue, while Lilian challenges the

standing of all Plaintiffs to sue. 

Gilian argues that Douglass transferred his interest in the Olo property

to the other beneficiaries as part of a 1982 settlement agreement and,

therefore, has no standing to bring the instant action.  Lilian argues that Plaintiffs do not have standing

because they do not constitute a majority of trustees or

beneficiaries.

 

[1]

It is well established that in order to establish standing a party must

demonstrate the following three things:

 

(1)

‘injury in fact,’ by which we mean an invasion of a legally protected interest

that is ‘(a) concrete and particularized, and (b) actual or imminent, not

conjectural or hypothetical;’ (2) a causal relationship between the injury and

the challenged conduct, by which we mean that the injury ‘fairly can be traced

to the challenged action of the defendant,’ and has not resulted ‘from the

independent action of some third party not before the court; and (3) a

likelihood that the injury will be redressed by a favorable decision, by which

we mean that the ‘prospect of obtaining relief from the injury as a result of a

favorable ruling’ is not ‘too speculative.’ 

These elements are the ‘irreducible minimum’ required by the

Constitution.

 

Mulitauaopele

v. Togafau, 26 A.S.R.2d 52, 53-54 (Trial Div.

1994) (citing Ne. Fla. Chapter of the Ass’n Gen. Contractors of Am. v.

Jacksonville, 508 U.S. 656, 663-64 (1993)) (internal citations omitted).

 

[2]

In this case, Plaintiffs are seeking declaratory relief, specifically that a

lease be declared void or voidable.  Under

A.S.C.A. § 43.1101, a person is entitled to relief if he is “interested under a

deed, will or other written, or under a contract, or . . . desires a

declaration of his rights or duties with respect to another, or in respect to,

in, over or upon property.”  We find that

Plaintiffs have standing to seek declaratory relief.

 

Initially, with

respect to Gilian’s challenge of Douglass’s standing, it is important to

describe the circumstances surrounding the aforementioned settlement

agreement.  In June 1982, in order to

resolve several underlying litigations, all the trust beneficiaries executed a

settlement agreement (“Settlement Agreement”), which among other things,

redistributed certain interests in the Kneubuhl Trust.  Specifically, Douglass transferred all of his

interest in the properties known as “Satala” and “Olo” to John, Benjamin,

Margaret, and Alfred in equal parts.

 

Gilian contends

that by relinquishing his rights to Olo in the Settlement Agreement, Douglass

has no standing to maintain this lawsuit. 

In essence, Gilian suggests that the Olo property constitutes a separate

subtrust, one in which Douglass has no interest as trustee or beneficiary.

Yet, none of

the documentary evidence (the Kneubuhl Trust, the Partition Agreement, the

Modification Agreement, the Land Planning Agreement, or the Settlement

Agreement) leads us to reach this conclusion. 

Although some of these documents partition the interests in portions of

the Kneubuhl Trust, void is any evidence of an intention to create multiple subtrusts.  Notably, all of the documents refer to the

trust in the singular form.  See

generally 76 Am. Jur. 2d Trusts

§ 27 (1992) (noting that “the particular words of the instrument creating such

trust or trusts must be examined to determine the creator’s purpose”).  Absent any evidence that Adeline intended to

create multiple trusts or    subtrusts, we

find that the Kneubuhl Trust constitutes one trust.  As a beneficiary to the Kneubuhl Trust, we

find that Douglass has standing to maintain this action.

 

[3]

Lilian has challenged the standing of all of the Plaintiffs to bring the

instant action.  Lilian argues that there

must be a majority of trustees or beneficiaries in order to bring an action

regarding the trust.  We disagree. As

beneficiaries to the Kneubuhl Trust, Margaret, Douglass, and Alfred each have

standing to protect their rights and interests.[3]  See, e.g., Mountain Top Condo.

Ass’n v. Stabbert, 72 F.3d 361, 367 (3d Cir. 1995) (noting that

“beneficiaries have a property interest in the trust res that is enforceable

either in law or in equity”); Restatement

(Second) of Trusts §§ 198-99 (1959).

 

Moreover,

should Lilian’s argument be based on the Land Planning Agreement, it still is

untenable.  The Land Planning Agreement

purports to impose restrictions on the development of the Olo land and requires

majority agreement for various actions. 

Notably absent is any requirement that a majority must agree in order to

bring a legal action regarding the property. 

As such, we hold that Plaintiffs have standing to maintain the instant

action.

 

B. Legal

Status of the Trustees/Beneficiaries

 

Underlying this action is the legal

status of the Knuebuhl Trust (and its trustees and beneficiaries) in light of

the restrictions on the alienation of land to non-Samoans.  Plaintiffs conceded that none of the current

trustees or beneficiaries has 50% Samoan blood. 

A.S.C.A. § 37.0204(b) mandates:

 

It is

prohibited to alienate any lands except freehold lands to any person who has

less than one-half native blood, and if a person has any nonnative blood

whatever, it is prohibited to alienate any native lands to such person unless

he was born in American Samoa, is a descendant of a Samoan family, lives with

Samoans as a Samoan, lived in American Samoa for more than 5 years and has

officially declared his intention of making American Samoa his home for life.

 

The validity of

the restrictions on the alienation of Samoan lands has been affirmed time and

time again by this Court.  See

generally Craddick Dev., Inc. v. Craddick, 2 A.S.R.3d 20 (App. Div. 1998); Craddick

v. Territorial Registrar of Am. Samoa, 1 A.S.R.2d 10 (App. Div. 1980); Craddick

Dev. Inc. v. Craddick, 28 A.S.R.2d 117 (Trial Div. 1995); Haleck v. Lee,

4 A.S.R. 519 (Trial Div. 1964).  It is

undisputed that the Kneubuhl Trust beneficiaries and trustees do not meet this

requirement.

 

[4-5]

However, the Legislature has carved out an exception to the restrictions on

land alienation.  Under A.S.C.A. §

37.0205, a Samoan can create a trust for the benefit of a son or daughter, “in

view of legal marriage with a nonnative, or for his son or daughter already

married to a nonnative, or for any of the issue of any such marriage.”  It was under this exception that this Court

previously held the Kneubuhl Trust valid. 

Kneubuhl v. Kneubuhl, LT No. 12-80, slip op. at 5-6, 9 (Land

& Titles Div. Mar. 24, 1982) (Order Granting Partial Summary

Judgment).  We agree with Chief Justice

Miyamoto’s holding that that the Kneubuhl Trust meets the statutory exception

to A.S.C.A. § 37.0204(b) and find that the Kneubuhl Trust beneficiaries are

allowed to hold equitable interest in the trust land as beneficiaries. 

 

[6]

In the previous Kneubuhl case, the Court instructed the parties that they could

not be trustees to the Kneubuhl Trust.  Id.

at 3 (“Although the modification agreements attempt to transfer Opelle’s

interest as trustee to the settlor’s children and to appoint them as successor

trustees, this he  could not do.”).  This is because the trustees hold the legal

title to the trust property while the beneficiaries hold the equitable

interest.  See In re Estate of Flake,

71 P.3d 589, 594 (Utah 2003); Coon v. City and County of Hawaii, 47 P.3d

348, 375 (Haw. 2002); see generally Restatement

(Second) of Trusts § 99 cmt. b (1959). 

It is undisputed that the Kneubuhl Trust beneficiaries are not capable

of holding legal title to land in American Samoa.  However, contrary to this Court’s finding in

1982 and contrary to American Samoa law, the Kneubuhl beneficiaries have

continued to hold themselves out as “trustees” of the Kneubuhl Trust.  This they cannot do.

 

[7]

However, the Kneubuhl Trust does not fail for want of a trustee.[4]  A trust does not fail merely because the

trustee is “incapable of taking title to the property.”  See generally Restatement (Second) of Trusts § 32(2) cmt. j (1959); 76 Am. Jur. 2d Trusts § 250 (“A trust will never fail for

want of a trustee.”).  In order to comply

with the law, William must still appoint a new trustee that is agreed upon by a

majority of the beneficiaries, and that trustee must be capable of holding

legal title to land under the laws of American Samoa.

 

C.

Validity of

the Lease Agreement and Subsequent Modifications

 

Douglass, Margaret

and Alfred seek a declaration that the Lease Agreement, Lease Transfer, and

Lease Amendment are void or voidable because they have not been approved by a

majority of the trustees as purportedly required by the Land Planning

Agreement.

 

[8]

Lilian asserts that Plaintiffs are barred from maintaining this action on the

grounds of waiver, estoppel, and laches. 

While there appears to be some merit to each of these affirmative

defenses, Plaintiffs have clearly waived their right to challenge the Lease Agreement,

Lease Transfer, and Lease Amendment.

 

[9]

Here, Plaintiffs acquiesced when Frances leased the land to Pricillia and

Lawrence and later when she transferred the lease to Suhayl and then

Lilian.  “Acquiescence consists of assent

by words or conduct on which the other party relies.”  Hazard Coal Corp. v. Ky. W. Va. Gas Co.,

311 F.3d 733, 740 (6th Cir. 2002). 

 

When

a party with full knowledge, or at least with sufficient notice or means of

knowledge, of his rights, and of all the material facts, freely does what

amounts to a recognition of the transaction as existing, or acts in a manner

inconsistent with its repudiation, or lies by for a considerable time and

knowingly permits the other party to deal with the subject matter under the

belief that the transaction has been recognized or freely abstains for a

considerable length of time from impeaching it, so that the other party is

thereby reasonably induced to suppose that it is recognized, there is

acquiescence and the transaction, although originally impeachable, becomes

unimpeachable in equity . . . .

 

Id.

at 740-41 (quoting J. Pomeroy, 2 Equity

Jurisprudence § 965 (5th ed. 1941)).

 

Plaintiffs do

not deny that they have known about these agreements for many years.  The Lease Agreement was entered in 1979, the

Lease Transfer in 1986, and the Lease Amendment in 1997.  Two of these agreements were registered

shortly after their execution with the Territorial Registrar.  Moreover, paragraph thirteen of the

Settlement Agreement implicitly validates the Lease Agreement by explicitly

allowing Lawrence to remain at Olo under the same conditions.  Plaintiffs, along with Frances, Benjamin and

John, were all parties to the Settlement Agreement, and the Settlement

Agreement was approved by this Court.  See

In re Estate of Lena Pritchard Kneubuhl, PR No. 08-80 (Probate Div. July

16, 1982) (Stipulation and Order).  This

demonstrates acquiescence in, and possibly ratification, of the Lease

Agreement.[5]  Certainly, Frances and Lilian have relied on

Plaintiffs’ acquiescence in assuming the Lease Agreement, Lease Transfer, and

Lease Amendment were valid instruments. 

Plaintiffs cannot complain now. 

Accordingly, we hold that Plaintiffs have waived their right to

challenge the validity of the Lease Agreement, Lease Transfer and Lease

Amendment.

 

ORDER

 

1.  William shall appoint a successor trustee to

the Kneubuhl Trust who is capable of holding legal title to land under the laws

of American Samoa and is acceptable to a majority of the beneficiaries.  If William is unavailable or unwilling to

perform this duty, a majority of the beneficiaries shall appoint a qualified

successor trustee.

 

2.  Plaintiffs have waived their right to

challenge the validity of the Lease Agreement, Lease Transfer, and Lease Amendment.  As between the parties to this action,

including Frances, the Lease Agreement, Lease Transfer, and Lease Amendment

remain in full force and effect.

 

3.  There being on statutory or contractual

basis, request for attorney’s fees is denied. 

However, she is entitled to recover her other costs of suit from

Plaintiffs.

 

4.  Lilian’s cross-claims are rendered moot.

 

It is so

ordered.

 

**********



[1] According to the

August 15, 1960 Conveyance in Trust, the Kneubuhl Trust includes parcels of

land known as: Taupou, Olo No. 3, Tagavaa, Lesea, Olo No. 1, Puapua, Olo No. 2,

Aso Toelau, Poata, Taitai, Maloloa, and Satala.

[2] We take judicial

notice of the Modification Agreement and any other documents, which were

submitted to this Court in Kneubuhl v. Kneubuhl, LT No. 12-80.

[3] This seems

particularly necessary in this case because the Plaintiffs and the other

Kneubuhl Trust beneficiaries do not have a valid trustee to protect or assert

their rights.

[4] Plaintiffs

pointed out during closing argument that in Craddick Development, Inc.,

28 A.S.R.2d at 126, we held that two trusts were void ab initio for

violating the statutory restrictions on land alienation.  In that case, the trustee was a Samoan

capable of holding legal title.  However,

the beneficiaries were nonnatives who did not meet any statutory exception to

the alienation restrictions.  Thus,

unlike the instant case in which the trust does not fail for lack of a valid

trustee, the Craddick trust was void ab initio because there was never a

valid trust beneficiary.  See

genera11y Restatement (Second) of

Trusts § 66 (1959) (“A trust cannot be created unless there is a proper

beneficiary.”).

[5] Plaintiffs

insist that the minutes from a December 15, 1983 meeting demonstrate their

disapproval of the Lease Transfer.  However,

these minutes are from a meeting that took place three years before Suhayl and

Frances executed the Lease Transfer, and there is no evidence that Plaintiffs’

concerns were ever expressed to Suhayl or Lilian, or that Frances ever actually

received a copy of these minutes.