January 2003 Term
JOHN J. COBERLY AND PORTIA ANN COBERLY,
Plaintiffs Below, Appellants
REBECCA A. COBERLY, INDIVIDUALLY AND AS POSSIBLE
BENEFICIARY OF J & J TRUST, AND AS EXECUTRIX AND
BENEFICIARY OF THE ESTATE OF JOHN T. COBERLY, DECEASED
Defendant Below, Appellee
Appeal from the Circuit Court of Randolph County
Honorable John L. Henning, Jr., Judge
Civil Action No. 01-C-164
REVERSED AND REMANDED
Submitted: February 11, 2003
Filed: April 17, 2003
LaVerne Sweeney, Esq.|
Grafton, West Virginia
Attorney for Appellants
David H. Wilmoth, Esq.|
Elkins, West Virginia
Attorney for Appellee
The Opinion of the Court was delivered PER CURIAM.
Appellate review of a circuit court's order granting a motion to dismiss
a complaint is de novo. Syllabus Point 2, State ex rel. McGraw v. Scott Runyan Pontiac-
Buick, 194 W. Va. 770, 461 S.E.2d 516 (1995).
2. The trial court, in appraising the sufficiency of a complaint on a Rule 12(b)(6) motion, should not dismiss the complaint unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Syllabus Point 3, Chapman v. Kane Transfer Company, Inc., 160 W. Va. 530, 236 S.E.2d 207 (1977).
In this proceeding, the Circuit Court of Randolph County dismissed a
complaint which the appellants, John J. Coberly and Portia Ann Coberly, his wife, had filed
against Rebecca A. Coberly. The court dismissed the complaint because the court concluded
that it failed to state a claim upon which relief could be granted. On appeal, the appellants
claim that their complaint did state a claim upon which relief could be granted and that, as
a consequence, the circuit court erred in dismissing their action. After reviewing the
questions presented, this Court agrees with the appellants and reverses the decision of the
Subsequent to the conveyance, the appellant John J. Coberly and his father, John T. Coberly, borrowed substantial sums of money against the property and constructed commercial improvements upon it.
Later, on May 5, 1995, the appellant John J. Coberly, who was not represented by counsel, and his father, John T. Coberly, executed two documents affecting the ownership of the property. One of the documents transferred the property to the J & J Trust. The other document apparently dealt with the trust, and, according to the complaint later filed, provided that . . . [t]rustee shall use the Trust Estate for the HEALTH and WELFARE of John J. Coberly [the appellant], as Trustee, and in Trustee's sole discretion only, deem necessary, it being the intent, however, of the Settlers to provide John J. Coberly a reasonable monthly income, if possible, from the Trust Estate. (See footnote 1)
In the present appeal, the appellant, John J. Coberly, asserts that, in 1998, after
the transactions involving the trust, he, his father, and his father's wife, Rebecca A. Coberly,
who is apparently the appellant's stepmother, borrowed $144,000 and executed a deed of trust
on the property to secure the loan. A portion of the amount borrowed apparently was used
to satisfy debts against the property. However, according to the complaint, the appellant's
father and/or his stepmother, appropriated the balance of the loan proceeds.
Subsequent to the 1998 financing, the appellant's father died testate and in his
will named Rebecca A. Coberly executrix of the estate and devised to her a substantial
portion of his estate apparently including apparently his interest in the property which had
previously been conveyed to the J & J Trust. It appears that at this time or previously,
Rebecca A. Coberly had become a trustee, or the trustee, of the J & J Trust.
Following the death of John T. Coberly, a dispute arose between Rebecca A.
Coberly and the appellant over money arising from the property which had been conveyed
to the J & J Trust. As a consequence, the appellants filed the complaint instituting the
After examining the complaint, Rebecca A. Coberly moved that the court dismiss it on the ground that it failed to state a cause of action upon which relief could be granted. The circuit court took the motion under consideration, and on October 3, 2001, granted it. In a subsequent order, the court said:
[T]he Complaint, when read in a light most favorable to the Plaintiffs failed to assert a factual scenario which would provided [sic] legal basis for relief. The Court, having considered counsel's argument as well as having reviewed the pleadings in this matter, being of the opinion that Defendant's Motion to Dismiss is proper does hereby ORDER that Defendant's Motion to Dismiss be and hereby is GRANTED based upon the contents of the Complaint which contains numerous assertions of fact and a laundry list of Plaintiffs' desires concerning changes which Plaintiffs wish could be made to previously executed documents, however, the Court finds that the Complaint fails to assert any grounds supporting relief sought.
It is from the dismissal of the action that the appellants now appeal.
In light of this principle, the question before this Court in the present case is
whether the appellants' complaint states any set of facts which might entitled them to relief.
Further, Wiggins v. Eastern Associated Coal Corporation, supra, indicates that in examining
that question, this Court should consider the allegations contained in the complaint as correct.
As has previously been stated, the complaint alleges, among other things, that
the property in question was transferred in trust with the direction that the property or trust
estate be used for the health and welfare of the appellant John J. Coberly as Trustee and in
Trustee's sole discretion only, deem necessary. The trust agreement states, however, that
it is the intent of the settlors to provide the appellant John J. Coberly with a reasonable
monthly income, if possible, from the trust estate. The complaint further alleges that
Rebecca A. Coberly, the appellee and trustee of the estate, had deprived the appellant, John J.
Coberly, of money which was rightfully his.
In Goetz v. Old National Bank of Martinsburg, 140 W. Va. 422, 84 S.E.2d 759
(1954), this Court recognized that although discretionary powers may be vested in a trustee
of a trust, and that courts should not normally interfere with the exercise of such discretionary
powers, the exercise of the discretion must not be made in a fraudulent or abusive way, and
the powers must not be exercised by the trustee in bad faith.
A reading of the complaint in the present case, when the allegations are taken
as true, indicates that the appellee Rebecca A. Coberly received an interest in the real
property in issue in trust with the discretionary power to distribute the proceeds for the health
and welfare of the appellant, John J. Coberly. It contains the further indication that the intent
of the settlors in establishing the trust was to provide the appellant John J. Coberly with a
reasonable monthly income, if possible, from the trust estate. The allegations of the
complaint also indicate that the appellant has not been receiving income from the trust estate
and that it is the appellant's claim that the income has been wrongfully, or in an abusive and
bad faith manner, withheld by the appellee Rebecca A. Coberly, the, or a, trustee of the J
& J Trust.
After reading the complaint, this Court believes that its allegations, if taken as
true, adequately allege that Rebecca A. Coberly has not managed the trust property in the
manner contemplated by law. It, in effect, alleges a breach of trust which is a cause of action
under West Virginia law.
In effect, this Court believes
that when the complaint is analyzed in the manner specified by the law, it does
allege a cause of action, and since it does allege a cause of action, the trial
court erred in dismissing the complaint for failure to state a cause of action
upon which relief can be granted.
(See footnote 2)
In view of the foregoing, the judgment of the Circuit Court of Randolph
County is reversed, and this case is remanded for further development.