Supreme Court
In re Tr. A & Tr. C, Established Under Bernard L. & Jeannette Fenenbock Living Tr. Agreement, Dated Mar. 12, 2008
- Case number: 22-0674
- Legal category: Procedure--Pretrial
- Subtype: Compulsory Joinder
- Set for oral argument: February 1, 2024
Case Summary
The central issue in this case is whether compulsory joinder extends to subsequent purchasers of stock when a lawsuit between other parties effectively adjudicates the stock’s ownership.
Glenna Gaddy, a co-trustee of a family trust, transferred stock from the family trust to her personal trust. Gaddy then sold the stock from her personal trust to her two sons. Following the sale, Mark Fenenbock sued Gaddy, seeking a declaration that he is a co-trustee under the trust agreement and that the transfer was void because he had not consented to it as co-trustee.
The probate court declared the stock transfer to be void, ordered that the stock be “restored” to the family trust, and ordered Gaddy to undertake certain actions, including an accounting and deposit of substantial funds. Gaddy appealed the probate court’s order declaring the stock transfer from the family trust to her personal trust void.
The court of appeals vacated and remanded, holding that the probate court lacked jurisdiction to declare the stock transfer void due to the omission of “jurisdictionally indispensable” parties. In particular, the court of appeals concluded that the probate court committed fundamental error and lacked subject-matter jurisdiction to enter the order for failing to join Gaddy’s sons—the purported owners of the stock in question.
Both parties petitioned for review as to the court of appeals’ jurisdictional holding. Fenenbock argues that Gaddy’s sons need not have been joined at all. Gaddy argues that her sons need not have been joined in order for the probate court to have jurisdiction, but that the probate court’s adjudication of the stock’s ownership in her sons’ absence was error. The Supreme Court granted the parties’ petitions for review.
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