Hannah v. Hannah

480 October 7, 2026 No. 932 IN THE COURT OF APPEALS OF THE STATE OF OREGON Jody Alma Jocelyn HANNAH, fka Alma J. Luney, Plaintiff-Appellant, v. Cheryl L. HANNAH, Trustee of the Thomas Dale Hannah Revocable Trust u/t/d October 23, 2002, Defendant-Respondent. Jackson County Circuit Court 23PB06243; A186586 David G. Hoppe, Judge. Argued and submitted August 13, 2026. Melisa A. Button argued the cause and filed the briefs for appellant. Mark R. Weaver argued the cause for respondent. Also on the brief was Brophy Schmor LLP. Before Tookey, Presiding Judge, Kamins, Judge, and Jacquot, Judge. KAMINS, J. Affirmed. Cite as 353 Or App 480 (2026) 481 KAMINS, J. Plaintiff is the daughter and defendant is the wife of Hannah, who is now deceased. In this trust action, plaintiff, as the beneficiary of a trust created by Hannah, challenges the probate court’s remedy for how defendant, Hannah’s surviving spouse, mismanaged certain aspects of trust funds, as the trustee. Plaintiff argues that the probate court erred in allowing defendant to pay off a portion of a loan obligation she shared with Hannah and by offsetting the amount it required defendant to return to the trust with spousal support. We affirm. For ease of reading, we refer to the parties as daughter (plaintiff) and wife (defendant). Daughter is the surviving child and sole beneficiary of a revocable living trust established by trustor, Hannah, in 2002. Hannah established the trust, naming wife, plaintiff’s stepmother and Hannah’s surviving spouse, as the successor trustee in the event of his death. According to the written terms of the trust, upon the death of Hannah, the trustee was to pay “the following liabilities of the [t]rustor’s estate as soon as convenient”: “(1) All just debts of and claims against the [t]rustor which are then due and payable; “(2) The expenses of the [t]rustor’s funeral, and the costs of any last illness; [and] “(3) The expenses necessary to administer and settle the [t]rustor’s estate.” After paying those liabilities, as well as any taxes generated by the trust, the residue of the trust was to be distributed to Hannah’s then-surviving children. A few years after creating the trust, wife and Hannah purchased a property, Arnwood, together as ten- ants by the entirety with a right of survivorship. To finance the purchase of Arnwood, they took out a loan together. By the time of Hannah’s death, there was $93,492 remaining on the loan. In 2021, Hannah died. Two years later, daughter filed a petition requesting removal of wife as trustee, an 482 Hannah v. Hannah accounting, and a declaratory judgment requiring wife to return any misappropriated funds to the trust. Daughter alleged that wife breached various trustee duties, failed to keep daughter reasonably informed about the trust, and used trust funds to pay off wife’s personal expenses, including the entire amount of the Arnwood loan. Wife objected, asserting that she did not breach any duties to the trust, and in the event that the court ordered her to return any trust funds, she was entitled to recoupment of various credits, including statutory spousal support from Hannah’s estate. Following a hearing, the trial court denied the request to remove wife as trustee and determined that she would “normally be lia- ble” for her half of the Arnwood debt that was paid off, as well as a personal vehicle debt. The court, however, offset that amount by $48,000 for two years of spousal support, ordering that she reimburse the trust for the remaining amount, and referenced ORS 114.055(1)(c), a statute that allows a court to order spousal support from a decedent’s estate in “[p]eriodic payment of moneys” for up to two years. On appeal, daughter raises two assignments of error. First, daughter argues that the trial court erred when it allowed wife to use trust assets to pay Hannah’s half of the mortgage on the Arnwood property.1 Second, daughter contends that the trial court erred in awarding $48,000 in statutory spousal support. For the reasons that follow, we affirm. We begin by addressing the relevant standard of review. The trial court’s ruling fell within its authority to ascertain the terms of a trust, determine whether a breach has occurred, and award a remedy, if appropriate. The trial court determined that wife breached the trust in two respects, and she did not cross-appeal those determinations. See ORS 130.650(1) (“Upon acceptance of a trusteeship, the trustee shall administer the trust in good faith, in accor- dance with its terms and purposes and the interests of the beneficiaries, and in accordance with this chapter.”); ORS 130.655(1) (“A trustee shall administer the trust solely in 1 The trial court ordered wife to return the money she used to pay her half of the loan to the trust. Wife does not cross-appeal that ruling. Thus, the remaining issue is whether wife could lawfully use Hannah’s trust money to pay Hannah’s half of the loan. Cite as 353 Or App 480 (2026) 483 the interests of the beneficiaries.”). To remedy a breach, a trial court may, among other things, “[c]ompel the trustee to pay money or restore property,” ORS 130.800(2)(c), or “[o] rder any other appropriate relief,” ORS 130.800(2)(j) (empha- sis added). Here, the propriety of the relief ordered depends on the proper interpretation of the terms of the trust and other provisions of law. Under those circumstances, we review the trial court’s remedy for breach of trust for legal error, accepting all supported factual findings. See Dombrowsky and Beaumont, 350 Or App 92, 94-95, 593 P3d 668 (2026) (applying that standard to review to trial court’s con- struction of the terms of a trust); see also Carter v. Smith, 346 Or App 5, 9-10, 585 P3d 1135 (2025) (concluding that the remedy ordered by trial court for breach of trust was appropriate). Daughter first argues that the trial court erred in allowing wife to pay Hannah’s portion of the Arnwood loan with trust funds. We disagree. According to the terms of the trust, wife, as trustee, was required to pay all of Hannah’s “just debts” that were “due and payable” from the trust at the time of Hannah’s death. When Hannah died, he no lon- ger had a property interest in Arnwood, but he remained liable on the note. ORS 73.0116 (providing for joint and sev- eral liability when multiple people sign a note). The trial court did not err in concluding that Hannah’s debt was a “just debt” under the terms of the trust. In arguing otherwise, daughter points to Bonner v. Arnold, 296 Or 259, 676 P2d 290 (1984). In that case, a mother and son purchased real property together as joint tenants with right of survivorship. Id. at 261. At the time of the mother’s death, the two owed approximately $40,000. Id. The son argued that the mother’s estate was liable for half of that debt and requested a contribution. Id. The Supreme Court held that the mother’s estate was not liable for the debt. Id. The court reasoned that contribution was an equi- table device and, under the circumstances of the case, equity did not require contribution “because the estate would not benefit”: 484 Hannah v. Hannah “The factual record is sparse in this case; the parties presented a narrative statement in lieu of a transcript that does not reveal the sort of property that was purchased or the reason that the mother and son held it with a right of survivorship. It is clear, however, that if the law would require contribution from the mother’s estate for one-half the debt, the estate would receive no benefit because at the time of the mother’s death the entire property vested solely in the son. Contribution is an equitable remedy used to pre- vent unjust enrichment. If it were applied in this case, it would result in unjust enrichment rather than prevent it.” Id. at 262. The record here distinguishes this case from Bonner. Unlike Bonner, the factual record here was detailed and, crucially, included a trust document created to ensure that all “just debts” owed by the trustor were paid off at the time of the trustor’s death. This case thus presents a depar- ture from the general rule of Bonner—that an estate of a joint tenant of property that passes to another through right of survivorship would not be liable in contribution.2 In her second assignment of error, daughter argues that the trial court erred when it awarded wife $48,000 for spousal support.3 We review the trial court’s spousal support award for an abuse of discretion. Booth v. First Nat’l Bank et al, 220 Or 534, 551-52, 349 P2d 840 (1960). Daughter argues that the trial court’s award is invalid because: (1) the award is precluded by Hannah and wife’s prenuptial agree- ment; (2) wife did not comply with the procedural require- ments of ORS 114.015 and ORS 114.025; and (3) support was not “necessary and reasonable” because wife has significant assets with which to support herself. 2 Moreover, Bonner was decided prior to the legislature enacting ORS 73.0116, the statute providing for joint and several liability for multiple parties on a negotiable instrument, such as a promissory note. Or Laws 1993, ch 545, § 19. Under ORS 73.0116(2), subject to exceptions not relevant here, “a party hav- ing joint and several liability who pays the instrument is entitled to receive, from any party having the same joint and several liability, contribution in accordance with applicable law.” However, we need not determine the relationship between Bonner and that updated statutory scheme to resolve the legal issues on appeal. 3 Daughter also contends that the trial court’s findings on spousal support were inadequate. Daughter, however, did not request specific findings on sup- port. In that situation, we review whether the trial court “said enough to allow for meaningful appellate review” when viewing “the ruling in the context of the arguments that the parties made.” Jaimez v. Rosales, 323 Or App 741, 750, 525 P3d 92 (2023). Cite as 353 Or App 480 (2026) 485 With respect to the prenuptial agreement, we dis- agree with daughter’s interpretation of that agreement. Daughter argues that the agreement waived spousal sup- port because it provided, in relevant part, that Hannah’s separate property would remain separate. Because it did not contain any express language relinquishing claims to statutory spousal support under ORS 114.015,4 however, the agreement does not preclude an award of spousal support. Cf. Simmons v. Simmons, 82 Or App 540, 542, 728 P2d 921 (1986) (a prenuptial agreement that contained express lan- guage that the parties’ separate property would remain free from any claims and that barred the surviving spouse from making certain claims held to preclude an award of support under ORS 114.015).5 Daughter also argues that wife did not comply with the procedural requirements of ORS 114.015 and ORS 114.025. Those requirements are that a surviving spouse seeking support from the estate must file a petition and notify the personal representative of the estate and any affected beneficiaries, and the court must hold a hear- ing. ORS 114.015. In the petition for support, the surviv- ing spouse must present information on the “description of property, other than property of the estate, available for the support of the spouse and children, and an estimate of the expenses anticipated for their support.” ORS 114.025. To the extent that wife was required to comply with the procedural requirements of ORS 114.015 and ORS 114.025 in her affir- mative recoupment defense to a breach of trust and removal of trustee proceeding, any failure to do so, under those cir- cumstances, would not have led the trial court to abuse its discretion in determining a “necessary and reasonable” amount: wife and daughter were the only interested parties to the estate, they both litigated the issue at a hearing fol- lowed by written closing arguments, and wife testified as to her living expenses. 4 ORS 114.015 states, in relevant part: “The court by order shall make neces- sary and reasonable provision from the estate of a decedent for the support of the spouse and dependent children of the decedent, or any of them” under relevant circumstances. 5 Our disposition obviates the need to address wife’s alternative argument that the prenuptial agreement was no longer valid because the parties destroyed it. 486 Hannah v. Hannah In daughter’s final argument, she contends that the support was not “necessary and reasonable,” as required by ORS 114.015, because wife received sufficient assets from Hannah’s estate to cover her expenses and, daughter argues, did not provide evidence of other assets, as required by ORS 114.025. However, the court reviewed testimony and exhib- its regarding her assets and anticipated expenses. Based on our review, the trial court did not abuse its discretion by determining that the spousal support was necessary and reasonable. Affirmed.