CAROL L. NEPAGE-FONTES, Petitioner-Appellee,
JOHN E. NEPAGE, Respondent-Appellant
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS AND PACIFIC REPORTER
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (TRUST NO. 00-1-0069)
Douglas C. Smith Mark M. Murakami E. Kumau Pineda-Akiona (Damon Key Leong Kupchak Hastert) for Respondent-Appellant.
Michael D. Rudy Cheryl R. Ng (MacDonald Rudy Byrns O'Neill & Yamauchi) for Petitioner-Appellee.
Foley, Presiding J., Fujise and Ginoza, JJ.
Respondent-Appellant John E. NePage (NePage) appeals from (1) the November 30, 2011 "Findings Of Fact, Conclusions Of Law, And Order Regarding The August 30 and 31, 2011 Hearing" (FOFsCOLs) and (2) the June 7, 2012 Final Judgment entered in the Circuit Court of the First Circuit (probate court). The probate court entered judgment in favor of Bruce Fontes (Fontes), as personal representative of the estate of Carol NePage-Fontes (NePage-Fontes).
John E. NePage and Carol NePage-Fontes, siblings, were the co-trustees and beneficiaries of the John S. NePage Revocable Trust (Trust) created by their father, John S. NePage (Settlor). At Settlor's death in March 1998, the Trust possessed the following: (1) liquid assets of $529, 923, (2) a condominium at 1717 Ala Wai Boulevard (Ala Wai condominium), (3) an undivided one-third leasehold interest in a condominium at 1650 Kanunu Street (Kanunu Street condominium), and (4) Settlor's tangible personal property. The Trust's dispositive provisions stated the Trust's assets were to be distributed "in equal shares, one share to each of my children who outlive me[.]"
Pursuant to a verbal agreement, the siblings distributed the liquid assets in 1998. NePage received $323, 132, and NePage-Fontes received $198, 147, giving NePage an excess distribution of $124, 985. Around April 1998, NePage-Fontes asserted NePage had breached an oral agreement that the $124, 985 excess distribution represented payment in full for NePage's entire interest in the real property held by the Trust, and she began demanding NePage tender his interest to her. NePage-Fontes repeated her demand at a meeting on November 11, 1998 and in writing on March 25, 1999, April 13, 1999, and July 16, 1999. It is undisputed that NePage never returned the excess distribution to the Trust, nor did he transfer his interest in the Trust's real property.
On May 9, 2000, NePage-Fontes filed a petition in the probate court requesting court intervention and supervision to finalize the distribution of the Trust's assets. The petition alleged certain assets had been distributed, and NePage had received an excess of his share but refused to equalize the distribution by deeding the real property. The probate court granted the petition and ordered NePage-Fontes to, among other things, provide NePage with a complete financial accounting of all Trust assets and divide Settlor's tangible personal property.
Over the next ten years, the parties continued litigation in the probate court. In the interim, the probate court issued a May 16, 2002 order removing NePage-Fontes as cotrustee and ordering NePage-Fontes to "relinquish possession of and turn over to Respondent [NePage] all remaining trust property owned by the Trust, including but not limited to, all tangible personal property and the Trust's real property[.]"
NePage-Fontes passed away on April 7, 2007. She remained in the Ala Wai condominium until her death. She also retained possession of the Kanunu Street property until her death. NePage-Fontes's husband, Bruce Fontes, remained in the Ala Wai condominium until NePage commenced eviction proceedings and evicted Fontes in September 2007. From 2007, NePage had exclusive control of the two properties.
Fontes was appointed personal representative of NePage-Fontes ' s estate. Fontes filed several petitions on the estate's behalf, including a petition (Petition) filed May 25, 2010 requesting, among other things, that NePage "wind up the affairs of the Trust and terminate said Trust and make final distributions as follows: a $124, 985.00 priority distribution to Petitioner [Fontes] and one-half of the Trust assets to Petitioner forthwith."
Fontes requested an evidentiary hearing, which the probate court conducted on August 30 and 31, 2011. The probate court heard testimony from NePage, Fontes, an accountant who testified about the Trust's expenses NePage had paid, and a contractor who testified about repairs to the Ala Wai condominium.
On November 30, 2011, the probate court entered its FOFsCOLs, granting Fontes's request for a priority distribution of $124, 985 from the Trust. The probate court concluded NePage had breached his fiduciary duties as trustee by withholding the $124, 985 excess distribution. It removed NePage as trustee and ordered a surcharge in the form of 10% interest on the excess distribution from January 2000 to August 2011. The probate court also ordered partial reimbursement for NePage's real property repair expenses and his attorneys' fees and costs; denied NePage reimbursement for real property taxes, maintenance and utility fees, eviction expenses, and litigation expenses; ordered a partial award for unpaid real property rental income; and denied trustee compensation or any award of Settlor's tangible personal property.
The probate court entered a certified judgment on June 7, 2012, from which NePage timely appealed. ...