                                                    Supreme Court

                                                    No. 2012-273-Appeal.
                                                    (KC/12-552)

   Joanne Miller                  :

         v.                       :

Henry Saunders et al.             :




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 notify the Opinion Analyst, Supreme Court of Rhode Island, 250
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                                                                        Supreme Court

                                                                        No. 2012-273-Appeal.
                                                                        (KC/12-552)

                  Joanne Miller                    :

                        v.                         :

              Henry Saunders et al.                :

              Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

                                           OPINION

       Chief Justice Suttell, for the Court. The plaintiff, Joanne Miller, appeals from a

Superior Court order granting summary judgment for the defendants, Henry Saunders and

Kristin Saunders. 1 The plaintiff challenges the trial justice’s rulings that the plaintiff’s deceased

ex-husband, Dean S. Miller, created a valid custodial trust with regard to his life insurance

proceeds and that this custodial trust did not violate a property settlement agreement executed by

the plaintiff and Mr. Miller in conjunction with their divorce. This case came before the

Supreme Court pursuant to an order directing the parties to appear and show cause why the

issues raised in this appeal should not be summarily decided. After considering the parties’

written and oral submissions and reviewing the record, we conclude that cause has not been

shown and that this case may be decided without further briefing or argument. For the reasons

set forth in this opinion, we affirm the order of the Superior Court.




1
  Mrs. Saunders’s name is spelled “Kristen” in some filings, and “Kristin” in others. It is not
clear which spelling is correct. Additionally, some of defendants’ filings spell Mrs. Saunders’s
last name “Sunders,” but this appears to be a typographical error.
                                                -1-
                                                  I

                                  Facts and Procedural History

       The plaintiff married Dean Miller in June 1992. During the course of their marriage, they

had four children: Christopher, Margo, Alexander, and Audrey. In 2006, plaintiff filed a

complaint for divorce.     On August 29, 2006, Mr. Miller and plaintiff executed a property

settlement agreement (agreement), which was incorporated by reference but not merged into the

divorce judgment. Paragraph twelve of the agreement reads as follows:

                      “12. LIFE INSURANCE: The Husband has life insurance,
               the Wife has no life insurance at this time. The Husband agrees to
               maintain any life insurance in full force and effect for the benefit
               of the minor children until they reach the age of majority. He will
               annually provide proof of insurance and proof of beneficiaries to
               the Wife.”

On February 5, 2007, Mr. Miller executed a service request form with Chase Insurance Life and

Annuity Company, in which he listed his four children as the beneficiaries of his life insurance

policy. 2 Under a portion of the service request form labeled “Special Instructions,” Mr. Miller

handwrote the following: “Beneficial interests to be paid to and managed by Kristin Saunders as

custodial trustee for the benefit of my minor children.” 3

       Mr. Miller died on January 2, 2012. In the spring of 2012, funds from his life insurance

policy were distributed to Mrs. Saunders in her capacity as custodial trustee. 4 In response to this

disbursement, plaintiff filed a complaint in the Superior Court on May 23, 2012, seeking

declaratory and injunctive relief. The plaintiff asked the court to declare that Mr. Miller’s four

children were the sole beneficiaries of his life insurance policy and that Mrs. Saunders was not a



2
  The plaintiff states that prior to February 5, 2007, she was the beneficiary of this policy.
3
  Kristin Saunders is Mr. Miller’s sister, and Henry Saunders is her husband.
4
  The exact amount paid to Mrs. Saunders is unclear. When Mr. Miller died, all of his children
were under the age of eighteen except for Christopher, who was nineteen.
                                                -2-
beneficiary in any capacity. Additionally, plaintiff asked the court to order defendants to tender

Alexander and Audrey’s insurance proceeds to plaintiff, 5 as well as to provide an accounting of

all insurance proceeds payable to Mrs. Saunders as trustee for the benefit of Margo, Alexander,

and Audrey. The plaintiff also sought a temporary restraining order and preliminary injunction,

restraining and enjoining defendants from disposing of the life insurance proceeds payable to

Margo, Alexander, and Audrey. The court entered an order granting plaintiff’s motion for a

temporary restraining order on May 23, 2012.

       The defendants moved for summary judgment on May 30, 2012, on the ground that Mrs.

Saunders was the rightful custodial trustee of Mr. Miller’s life insurance proceeds because she

was clearly and unambiguously listed as custodial trustee in the service request form. The

plaintiff opposed defendants’ motion for summary judgment, arguing that Mr. Miller did not

create a valid custodial trust because he did not have legal authority to do so pursuant to the

property settlement agreement, and because the language in the service request form failed to

conform to the statutory requirements for creating a custodial trust. 6 The court held a hearing on

July 12, 2012, and an order was entered on July 23, 2012, granting defendants’ motion for

summary judgment and vacating the temporary restraining order. 7 The trial justice found that

Mr. Miller created a valid custodial trust pursuant to the Rhode Island Uniform Custodial Trust

Act (RIUCTA), G.L. 1956 § 18-13-3, and that this trust was not inconsistent with Mr. Miller’s

5
  The record indicates that at the time plaintiff filed the complaint, only Alexander and Audrey
were living with her; defendants had been appointed temporary guardians of Margo on April 11,
2012, by an order of the West Greenwich Probate Court.
6
  The plaintiff also moved for partial summary judgment on the issue of Alexander and Audrey’s
insurance proceeds, arguing that Mrs. Saunders was not the custodial trustee regarding these
funds and that plaintiff was entitled to the proceeds as sole parent and legal guardian of
Alexander and Audrey.
7
  The court also denied plaintiff’s motion for partial summary judgment. While it appears that
there was a full summary judgment hearing, the transcript ordered for this appeal contains only a
record of the trial justice’s bench decision.
                                               -3-
obligations under the property settlement agreement. The plaintiff filed a notice of appeal on

August 1, 2012. Final judgment was entered in the Superior Court on March 15, 2013. 8

                                                II

                                      Standard of Review

       “This Court reviews the grant of summary judgment ‘de novo, employing the same

standards and rules used by the hearing justice.’” Carreiro v. Tobin, 66 A.3d 820, 822 (R.I. 2013)

(quoting Great American E & S Insurance Co. v. End Zone Pub & Grill of Narragansett, Inc., 45

A.3d 571, 574 (R.I. 2012)). “We will affirm a lower court’s decision only if, after reviewing the

admissible evidence in the light most favorable to the nonmoving party, we conclude that no

genuine issue of material fact exists and that the moving party is entitled to judgment as a matter

of law.” Id. (quoting Great American E & S Insurance Co., 45 A.3d at 574). “[T]he nonmoving

party bears the burden of proving by competent evidence the existence of a disputed issue of

material fact * * *.” The Law Firm of Thomas A. Tarro, III v. Checrallah, 60 A.3d 598, 601 (R.I.

2013) (quoting Great American E & S Insurance Co., 45 A.3d at 574).

                                                III

                                           Discussion

       On appeal, plaintiff argues that Mrs. Saunders is not the custodial trustee of the life

insurance proceeds because Mr. Miller did not create a legally cognizable trust. The plaintiff

advances two arguments in this vein. First, plaintiff argues that Mr. Miller did not have the legal

right to create a custodial trust because the property settlement agreement required him to

maintain his life insurance policy for the benefit of his minor children. Second, plaintiff argues

that the language in the special instructions section of Mr. Miller’s service request form did not

8
 Because final judgment entered, plaintiff’s premature notice of appeal is valid. See Chapdelaine
v. State, 32 A.3d 937, 941 n.1 (R.I. 2011).
                                               -4-
comply with the statutory requirements set forth in RIUCTA for creation of a custodial trust by

written declaration, because Mr. Miller’s instructions lacked the phrase “under the Rhode Island

Uniform Custodial Trust Act.” The plaintiff also argues that paragraph twelve of the property

settlement agreement existed for the sole purpose of providing an uninterrupted stream of child-

support payments to plaintiff for the benefit of her minor children, and that the parties intended

plaintiff to use the life insurance proceeds in the same manner that she utilized child-support

payments, which would require her to maintain control over the funds.

                                                 A

                    Statutory Requirements for Creating a Custodial Trust

       We begin our analysis by examining the pertinent provisions of RIUCTA. Section 18-

13-3(a) provides the following:

                      “A person having the right to designate the recipient of
               property payable or transferable upon a future event may create a
               custodial trust upon the occurrence of the future event by
               designating in writing the recipient, followed in substance by ‘as
               custodial trustee for ___ (name of beneficiary) under the Rhode
               Island Uniform Custodial Trust Act.’”

More specifically, § 18-13-18(b) in pertinent part provides the following with regard to creating

a custodial trust for life insurance proceeds:

                        “(b) Customary methods of transferring or evidencing
               ownership of property may be used to create a custodial trust,
               including any of the following:
                        “* * *
                        “(4) Registration of ownership of a life or endowment
               insurance policy or annuity contract with the issuer in the name of
               a trust company, an adult other than the transferor, or the transferor
               if the beneficiary is other than the transferor, designated [in 9]

9
  The word “in” appears to be unintentionally omitted from this subsection of RIUCTA.
References to the phrase at issue appear numerous times throughout the statutory scheme, all
with the word “in” preceding the word “substance.” See, e.g., G.L. 1956 §§ 18-13-2(a); 18-13-
4(b); 18-13-7(d).
                                                 -5-
               substance: ‘as custodial trustee for __________ (name of
               beneficiary) under the Rhode Island Uniform Custodial Trust
               Act.’”

                                                     B

                          Mr. Miller’s Authority to Create a Custodial Trust

       The foundation of plaintiff’s argument on appeal is her assertion that custodial trusts are

“entirely creatures of statute,” in derogation of the common law and that, therefore, the

provisions of RIUCTA must be strictly construed. She first contends that Mr. Miller lacked the

legal ability to create a custodial trust because the property settlement agreement stripped him of

his “right to designate the recipient of property payable * * * upon a future event,” which is a

prerequisite to the establishment of a valid custodial trust. See § 18-13-3(a). According to

plaintiff, the agreement clearly required Mr. Miller to maintain his life insurance policy in full

force and effect for the benefit of the minor children until they reached majority, and it afforded

him “no right whatsoever to name the person or persons of his choosing to receive the policy

proceeds.”

       We review de novo the terms and provisions of a property settlement agreement that has

not been merged into a divorce judgment. See Furtado v. Goncalves, 63 A.3d 533, 537 (R.I.

2013). “A property settlement agreement ‘that is not merged into a divorce judgment retains the

characteristics of a contract.’” DiPaola v. DiPaola, 16 A.3d 571, 576 (R.I. 2011) (quoting

Riffenburg v. Riffenburg, 585 A.2d 627, 630 (R.I. 1991)). “A reviewing court has no need to

construe contractual provisions unless those terms are ambiguous.” Id. (quoting A.F. Lusi

Construction, Inc. v. Peerless Insurance Co., 847 A.2d 254, 258 (R.I. 2004)). A contractual term

is ambiguous if it is “reasonably and clearly susceptible to more than one rational interpretation.”

Id. (quoting A.F. Lusi Construction, Inc., 847 A.2d at 258). In determining ambiguity, we



                                               -6-
construe contractual language in an “ordinary, common sense manner.” City of East Providence

v. United Steelworkers of America, Local 15509, 925 A.2d 246, 251 (R.I. 2007) (quoting Garden

City Treatment Center, Inc. v. Coordinated Health Partners, Inc., 852 A.2d 535, 542 (R.I. 2004)

(emphasis omitted)).

       Here, the property settlement agreement required Mr. Miller to maintain a life insurance

policy “for the benefit of the minor children.” Applying a plain-meaning test to this provision,

we conclude that Mr. Miller complied with the agreement by naming his four children as the

beneficiaries of his life insurance policy. The agreement did not explicitly limit Mr. Miller’s

ability to channel the insurance funds to his children by way of a trust, nor did it restrict his

ability to designate a trustee of his own choosing. 10

       We reject plaintiff’s assertion that the sole purpose of paragraph twelve of the property

settlement agreement was to guarantee an uninterrupted stream of child-support payments in the

event of Mr. Miller’s death. When a contractual term is devoid of ambiguity, we are bound to

apply its usual and ordinary meaning. DiPaola, 16 A.3d at 576 (citing Singer v. Singer, 692 A.2d

691, 692 (R.I. 1997) (mem.)).       “The subjective intent of the parties may not properly be

considered by the Court; rather, we consider the intent expressed by the language of the

contract.” Furtado, 63 A.3d at 537 (quoting Derderian v. Essex Insurance Co., 44 A.3d 122, 128

(R.I. 2012)). Thus, the unexpressed intent of the parties plays no role in our de novo review. Id.

at 537. Here, we hold that the contractual language is not ambiguous, and that Mr. Miller did not

violate paragraph twelve of the agreement by designating Mrs. Saunders “as custodial trustee for

the benefit of [his] minor children” on the service request form.

10
   Additionally, it can be implied that the agreement contemplated an arrangement such as a
custodial trust, because minors are not generally able to directly receive insurance proceeds due
to their inability to form binding contracts. See Bertram Harnett & Irving I. Lesnick, 2 The Law
of Life and Health Insurance §§ 5.21[1][c][iii]; 5.22[1][b][iii] (2011).
                                                 -7-
                                                  C

                  Mr. Miller’s Compliance with the Statutory Requirements

       The plaintiff also asserts that Mr. Miller did not create a valid custodial trust because his

handwritten comments in the “special instructions” portion of the service request form did not

make reference to RIUCTA. Sections 18-13-3(a) and 18-13-18(b)(4) of RIUCTA provide that a

custodial trust may be created by designating the recipient “[in] substance * * * ‘as custodial

trustee for ___ (name of beneficiary) under the Rhode Island Uniform Custodial Trust Act.’”

Thus, we must determine the meaning of the phrase “in substance” within the context of creating

a custodial trust pursuant to RIUCTA.

       “This Court reviews questions of statutory construction and interpretation de novo.”

Morel v. Napolitano, 64 A.3d 1176, 1179 (R.I. 2013). “When * * * statutory language is clear

and unambiguous, we give the words their plain and ordinary meaning.” Id. Moreover, “when

we examine an unambiguous statute, there is no room for statutory construction and we must

apply the statute as written.” Id. (quoting Mutual Development Corp. v. Ward Fisher & Co.,

LLP, 47 A.3d 319, 328 (R.I. 2012)). In our opinion, the phrase “in substance” is clear and

unambiguous as it appears in RIUCTA. Black’s Law Dictionary defines “substance” as: “The

essence of something; the essential quality of something, as opposed to its mere form.” Black’s

Law Dictionary 1565 (9th ed. 2009). Applying this ordinary meaning to §§ 18-13-3(a) and 18-

13-18(b)(4) of RIUCTA, we hold that the phrase “in substance” does not require a verbatim

recitation of the statute’s suggested language for the creation of a valid custodial trust.

       Mr. Miller’s special instructions identified a custodial trustee and minor beneficiaries.

RIUCTA specifically instructs a custodial trustee to “administer the custodial trust as for an

incapacitated beneficiary if: * * * The transferor has so directed in the instrument creating the



                                                 -8-
custodial trust * * *.” Section 18-13-10(a)(2). 11 This is precisely what Mr. Miller directed in his

instructions, when he identified “Kristin Saunders as custodial trustee for the benefit of [his]

minor children.” Because Mr. Miller identified his children as the beneficiaries of his life

insurance policy and designated Mrs. Saunders as the “custodial trustee for the benefit of [his]

minor children,” we conclude that it is clear that he in fact created a custodial trust pursuant to

RIUCTA.        We hold that Mr. Miller’s instructions complied with RIUCTA’s requirements,

notwithstanding his failure to expressly reference the statute.

                                                 IV

                                             Conclusion

          For the reasons set forth in this opinion, we affirm the order of the Superior Court. The

record of this case may be returned to the Superior Court.




11
     RIUCTA includes minority in its definition of the term “incapacitated.” See § 18-13-1(8).
                                                -9-
                            RHODE ISLAND SUPREME COURT CLERK’S OFFICE

                                 Clerk’s Office Order/Opinion Cover Sheet




TITLE OF CASE:        Joanne Miller v. Henry Saunders et al.

CASE NO:              No. 2012-273-Appeal.
                      (KC/12-552)

COURT:                Supreme Court

DATE OPINION FILED: December 5, 2013

JUSTICES:             Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

WRITTEN BY:           Chief Justice Paul A. Suttell

SOURCE OF APPEAL:     Kent County Superior Court

JUDGE FROM LOWER COURT:

                      Associate Justice Kristin E. Rodgers

ATTORNEYS ON APPEAL:

                      For Plaintiff: Kevin M. Daley, Esq.

                      For Defendants: Steven J. Hart, Esq.
