The Idaho Supreme Court reversed a decision when it ruled that the district court erred when it declined to consider extrinsic evidence for the establishment of a resulting trust in a case involving intention when transferring real property. In Mace v. Luther (Idaho, No. 50834, December 11, 2024).
Idaho residents Jean and Lewis Mace owned multiple properties in northern Idaho and had three children: Judy Mace, Ginger Collins, and James Mace. As they grew older, Mr. and Mrs. Mace began transferring properties to their children. In the early 2000s, they transferred one property to Ginger and James, each with a one-half interest. In 2003, Mr. and Mrs. Mace wrote a letter expressing their wish that this property be divided equally among all three children, not just two.
In 2016, Mr. and Mrs. Mace transferred their home and its surrounding property (“Deep Creek Property”) to Judy by way of a fee simple deed. This property is the subject of this case. When this property transfer occurred, Judy was living on the property and acting as her parents’ caretaker.
In 2017, Mr. Mace passed away, and a portion of the property was sold to help pay for Mrs. Mace’s medical care. Also in 2017, Judy created the Judith Lynn Mace Revocable Trust (the “Trust”). Judy was the first trustee of the Trust. Judy’s cousin Scott Mace is the successor trustee of the Trust and also Judy’s personal representative.
In 2021, Mrs. Mace moved to an assisted living facility and Judy was diagnosed with terminal cancer. Around this time, Judy transferred the Deep Creek Property to the Trust. In late September 2021, Judy, as trustee of the Trust, transferred ownership of the property to Deborah and Raymond Luther in a rent-to-own agreement. She also granted her caretaker, Sheryl Aucutt, a life-estate in the property as part of the Trust. Mr. and Mrs. Luther and Ms. Aucutt moved onto the property. Soon after the transfer of the property, Judy died.
After Judy’s death, Ginger was surprised to learn Judy had sold the Deep Creek Property to the Luthers. In November 2021, she filed a complaint on Mrs. Mace’s behalf, as her attorney-in-fact, seeking to evict Ms. Aucutt and the Luthers and to invalidate the sale based on a resulting trust theory. Ginger claimed that Judy didn’t own the property but was actually holding it in trust for their mother’s benefit.
Ginger offered evidence of the Mace family seeking to divide their properties equally for the benefit of all three of their children as well as evidence that conveyed an understanding that Judy was, in essence, holding onto the Deep Creek Property and not really the sole owner of it, even though the deed expressed as much. The district court maintained that it was not required to consider extrinsic evidence, even in connection with a resulting trust claim, because the deed was unambiguous.
In December 2022, Ginger filed a motion for reconsideration, maintaining that extrinsic evidence is required to be admitted if a claim for a resulting trust is made. She urged the district court to void the sale to the Luthers and void the transfer of the property to Judy.
As trustee, Scott opposed the motion for reconsideration, arguing that extrinsic evidence of a resulting trust was inadmissible to contradict an unambiguous deed.
The district court denied Ginger’s motion for reconsideration and affirmed its determination that the deed was unambiguous and its decision that extrinsic evidence is inadmissible to contradict the deed. In April 2023, the district court dismissed the case with prejudice.
Ginger appealed the district court’s denial of the motion for reconsideration.
Citing precedent, the court maintains that since the purpose of a resulting trust is to carry out an implied legal intention, extrinsic evidence is allowed for its consideration.
The court reverses the district court’s dismissal of Ginger’s claim for a resulting trust and remands the case for further proceedings.
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