In the consolidated case, In re Gerald L. Pollack Trust, No. 309796, the Court of Appeals held, among other things, that the Michigan Trust Code’s (MTC) statute of limitations provision, codified under MCL 700.7604(1), applies retroactively to trusts drafted prior to the effective date of the MTC so long as the full limitations period affords a party a reasonable time to file suit. Thus, the court affirmed the trial court’s order granting defendant trustee summary disposition on certain claims raised by plaintiff challenging his father’s estate because the plaintiff had filed them after the limitations period ended.
Gerald L. Pollack died from brain cancer on June 27, 2009. Gerald owned and operated Gerald L. Pollack (GLP) & Associates, along with GLP Investment Services and GLP Specialty Services. The companies are the primary assets of Gerald’s estate and are held in trust. Gerald’s long time attorney, Ronald Barron, and J.P. Morgan Chase are the named co-trustees of Gerald’s trust. Gerald executed a will and trust in September 2008, which included provisions that provided for Gerald’s several children. The will and trust also provided that Loren Pollack, one of Gerald’s sons, would be part of Gerald’s business succession plan. The September 2008 estate documents were then superseded by an October 2008 will and trust. The new estate documents limited the children’s immediate benefits to Gerald’s estate and did not arrange for the business succession plan. Loren and another sibling brought several actions to set aside Gerald’s will and trust, and to remove Barron as co-trustee.
First, Loren argued that the trial court erred in its decision to grant summary disposition with respect to certain of his claims on the grounds that his petition to set aside the trust was barred by the statute of limitations. The MTC provides that an individual must contest the validity of a trust either two years after the trust goes into effect or six months after the individual receives notice of the trust, whichever is earlier. Loren contended that the MTC did not apply to him and that he had an accrued right to challenge the October trust according to a six year statute of limitations period. He asserted that the Michigan Trust Code (MTC) became effective after his rights accrued to invalidate the trust because Gerald Pollack died in 2009 and the MTC did not go into effect until 2010. The Court of Appeals disagreed, and held that the MTC did apply. The Court reasoned that Loren’s six-month period did not begin running until after the MTC went into effect because he received notice of the trust in May 2010. Therefore, Loren’s rights were not impaired because he received the benefit of the full six-month period. Because Loren initiated his action after the six month period concluded, that statute of limitations barred his claims.
Loren and a sibling also contended that the will and trust be set aside on the basis of Barron’s undue influence over Gerald Pollack and that Barron should be removed as co-trustee. The court rejected this argument because there was insufficient evidence in the record that Barron gained a substantial personal benefit from the October 2008 will and trust that differed from the September 2008 will and trust. The court also held that Barron had standing to oppose Loren’s petition to modify the trust and remove him as co-trustee because he was under an obligation as trustee to defend against all challenges to the trust. Finally, the court held that there was no evidentiary support that Barron’s conduct fell under any of the MTC’s removal provisions. Therefore, the court affirmed the trial court’s orders granting Barron’s motion for summary disposition on all claims.
Judge O’Connell dissented from the majority opinion because he believed a question of fact existed regarding whether Barron exercised undue influence over Gerald Pollack. O’Connell pointed to the unusual circumstances regarding the execution of the October will and trust, which were sufficient to show a presumption of undue influence. O’Connell would have instead reversed the order granting summary disposition admitting the October will to probate and remand to the trial court for further proceedings.