In re Trust Created by Nixon

I n re TrusT C reaTed by John a. nIxon, deCeased.
John a. nIxon FamIly TrusT eT al ., appellees ,
v. roberT nIxon eT al ., appellanTs.
763 N.W.2d 404
Filed April 10, 2009. 	No. S-07-1353.
1. Judgments: Appeal and Error. On a question of law, an appellate court is
obligated to reach a conclusion independent of the determination reached by the
court below.
2. Adoption: Constitutional Law: Foreign Judgments. Adoption decrees are
among the judgments to which full faith and credit is due.
3. Foreign Judgments: Jurisdiction: States. A judgment rendered in a sister state
court which had jurisdiction is to be given full faith and credit and has the same
validity and effect in Nebraska as in the state rendering judgment.
4. Constitutional Law: Statutes: Foreign Judgments: States. The Full Faith and
Credit Clause does not compel a state to substitute the statutes of another state
for its own statutes; with regard to judgments, however, the full faith and credit
obligation is exacting.
Appeal from the County Court for Douglas County: JeFFrey
marCuzzo, Judge. Affirmed.
John G. Liakos, Michael J. Matukewicz, and Jason R.
Fendrick, of Liakos & Matukewicz, L.L.P., for appellants.
David L. Buelt and Carlos E. Noel, of Ellick, Jones, Buelt,
Blazek & Longo, for appellee Wells Fargo Bank, N.A.
Heather Voegele-Andersen and Mary A. Donovan, of Koley
Jessen, P.C., L.L.O., for appellee Richard Daley.
WrIghT, C onnolly, gerrard, sTephan, mCC ormaCk , and
mIller-lerman, JJ.
mIller-lerman, J.
NATURE OF CASE
The main issue in this appeal is whether an adult adoption,
which was valid at the time it was granted in California but
would not have been allowed under Nebraska law, is entitled
to full faith and credit in determining the beneficiaries of a
trust in Nebraska. In this trust administration action, Wells
Fargo Bank, N.A. (Wells Fargo), as trustee, sought a deter-
mination of the proper beneficiaries of a trust. We affirm the
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www.nebraska.gov/apps-courts-epub/
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order of the county court for Douglas County finding that the
California adoption decree was entitled to full faith and credit
in Nebraska.
STATEMENT OF FACTS
John A. Nixon, Sr. (John Sr.), died in 1965, and his will cre-
ated a family trust to provide for the maintenance and support
of his wife until her death. Upon her death in 1980, under the
terms of John Sr.’s will, the trust was divided into two trusts,
“Trust A” and “Trust B.” The beneficiary of Trust A was John
Sr.’s daughter Grace Nixon, who at the time John Sr. executed
the will in 1964 was 43 years old, unmarried, and childless.
The trust documents provided that upon Grace’s death, Trust
A was to be divided into as many equal shares as there were
living children of Grace and deceased children of Grace who
left issue surviving. If Grace died without living children or
without issue of deceased children, the assets of Trust A were
to be held or distributed as directed by the terms of Trust B.
The beneficiaries of Trust B were John Sr.’s son John A. Nixon,
Jr. (John Jr.), his wife, and their children. John Jr. and his wife
had children living at the time John Sr. executed the will in
1964. Upon the deaths of John Jr. and his wife, Trust B was to
be divided among the living children and issue of the deceased
children of John Jr.
It appears from the record that Grace did not get along with
John Jr. and his wife and children. In 1985, Grace approached
her maternal cousin, Richard Daley. Grace told Daley that he
could become the beneficiary of Trust A if he agreed to be
adopted by her. Daley was approximately 50 years old, and
Grace, who was still unmarried and childless, was approxi-
mately 64 years old. Daley testified at trial in this matter that
one of Grace’s purposes for the adoption was to prevent John
Jr.’s children from receiving the principal of Trust A upon
her death.
Grace filed a petition in California seeking to adopt Daley.
The Superior Court of Los Angeles County, California, issued a
decree of adoption in 1986. Grace told Daley to keep the adop-
tion secret, and Grace and Daley never resided together after
the adoption. Daley’s biological father had died, but Daley’s
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biological mother was still alive in 1986. She did not relinquish
her parental rights, and her parental rights were not terminated
prior to Grace’s adoption of Daley. Daley did not tell his bio-
logical mother about the adoption, and they continued their
usual parent-child relationship.
After the adoption, Grace informed Wells Fargo that by
adopting Daley, she intended him to be her legal heir by
adoption and to become the beneficiary of Trust A upon her
death. Grace died on November 13, 2006. Daley survived, and
Grace left no spouse or biological children. Wells Fargo filed
the present trust administration action in the county court for
Douglas County seeking a determination of the beneficiaries
of Trust A.
Robert Nixon, Kenneth Nixon, Joanne Nixon Rickels, and
Dianne Nixon Sullo (the Nixons) are the children of John Jr.
John Jr. and his wife were apparently deceased, and therefore,
if it were determined that Grace died without children, the
Nixons, as beneficiaries of Trust B, would also become the
beneficiaries of Trust A. The issue in the trust administration
action was whether Daley was a living child of Grace and
therefore the beneficiary of Trust A or whether Grace died
without children, leaving the Nixons as the beneficiaries.
The county court determined that Daley was the sole bene-
ficiary of Trust A. The court reasoned that Grace’s adoption
of Daley in California was a lawful adoption pursuant to
California law at the time the adoption decree was entered and
that full faith and credit should be given to the adoption decree.
The court noted that Nixon’s will defined “issue” to include
“‘persons legally adopted’” and that the will did not specify
that the term “children” was to exclude adopted children. The
court cited Satterfield v. Bonyhady, 233 Neb. 513, 446 N.W.2d
214 (1989), in which this court held that in the absence of spe-
cific testamentary directions to the contrary, adopted children
inherit to the same extent as do natural children. Because the
court determined that Daley was Grace’s child, it concluded
that Daley became the sole beneficiary of Trust A upon Grace’s
death, and the court ordered Wells Fargo to distribute the assets
of Trust A to Daley.
The Nixons appeal the decision of the county court.
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ASSIGNMENTS OF ERROR
The Nixons assert that the county court erred in concluding
that the State of Nebraska was required to give full faith and
credit to the California adoption of Daley. The Nixons also
assert that, based on such finding, the county court further
erred in finding that Daley was Grace’s child and the sole bene-
ficiary of Trust A and in ordering Wells Fargo to deliver the
assets of Trust A to Daley.
STANDARDS OF REVIEW
[1] The issue presented in this case is whether the adoption
decree entered by the California court is entitled to full faith
and credit in Nebraska. This is a question of law. See Susan H.
v. Keith L., 259 Neb. 322, 609 N.W.2d 659 (2000) (regarding
whether paternity decree entered by Oklahoma court entitled to
full faith and credit). On a question of law, an appellate court is
obligated to reach a conclusion independent of the determina-
tion reached by the court below. State v. Parker, 276 Neb. 661,
757 N.W.2d 7 (2008).
ANALySIS
The Nixons’ arguments focus on the county court’s conclu-
sion that it was required to give full faith and credit to the
California adoption of Daley. They argue that the adoption was
contrary to the public policy of Nebraska and that therefore, it
was not entitled to full faith and credit in Nebraska. They also
argue that because the court erred in giving full faith and credit
to the California adoption, the court further erred by finding
that Daley was Grace’s child and the sole beneficiary of Trust
A and in therefore ordering Wells Fargo to deliver the assets
of Trust A to Daley. We conclude that there is no expressed
public policy that overcomes the constitutional requirement for
Nebraska to give full and faith credit to the judgment of the
California court and that therefore, the county court did not err
when it determined that Daley was to be considered Grace’s
child and the sole beneficiary of Trust A and when it ordered
Wells Fargo to deliver the assets of Trust A to Daley.
[2,3] The Full Faith and Credit Clause of U.S. Const. art.
IV, § 1, provides in part that “Full Faith and Credit shall be
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given in each State to the Public Acts, Records, and judicial
Proceedings of every other State.” We have recognized that
adoption decrees are among the judgments to which full faith
and credit is due. See Russell v. Bridgens, 264 Neb. 217, 647
N.W.2d 56 (2002). In Russell v. Bridgens, a case involving
a Pennsylvania adoption decree, we stated that a judgment
rendered in a sister state court which had jurisdiction is to
be given full faith and credit and has the same validity and
effect in Nebraska as in the state rendering judgment. Other
jurisdictions have similarly recognized adoption decrees as
being judgments entitled to full faith and credit. See, Finstuen
v. Crutcher, 496 F.3d 1139 (10th Cir. 2007); Byrum v. Hebert,
425 So. 2d 322 (La. App. 1982); Wachovia Bank and Trust
Co. v. Chambless, 44 N.C. App. 95, 260 S.E.2d 688 (1979);
Delaney v. First National Bank in Albuquerque, 73 N.M. 192,
386 P.2d 711 (1963).
While we recognized in Russell v. Bridgens, supra, that the
Full Faith and Credit Clause of the U.S. Constitution prohibits
a Nebraska court from reviewing the merits of a judgment ren-
dered in a sister state, we noted that a foreign judgment can
be collaterally attacked by evidence that the rendering court
was without jurisdiction over the parties or the subject matter.
However, the Nixons make no argument in this case that the
California court was without jurisdiction over the parties or
the subject matter when it issued the adoption decree. Instead,
the Nixons argue that the California adoption decree should
not be given full faith and credit in Nebraska, because, they
assert, the adoption violates Nebraska public policy.
The Nixons argue that the California adoption decree vio-
lates Nebraska public policy because the adoption would not
have been allowed under Nebraska statutes. They note that
Grace could not have adopted Daley in Nebraska, because
Nebraska statutes do not, and at the time of the adoption
did not, allow the adoption of an adult except under specific
circumstances that were not present in this case. The Nixons
argue that because the adoption would not have been allowed
under Nebraska statutes, the California adoption decree vio-
lates Nebraska public policy and should not be given full faith
and credit by Nebraska courts.
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[4] We note, however, that the U.S. Supreme Court has said
that its “decisions support no roving ‘public policy exception’
to the full faith and credit due judgments.” Baker v. General
Motors Corp., 522 U.S. 222, 233, 118 S. Ct. 657, 139 L. Ed.
2d 580 (1998) (emphasis in original). In this regard, the Court
has differentiated between the application of the Full Faith and
Credit Clause as it relates to statutes and as it relates to judg-
ments. The Court has noted that although the Full Faith and
Credit Clause does not compel a state to substitute the statutes
of another state for its own statutes, with regard to “judgments,
however, the full faith and credit obligation is exacting.” Id.
Similarly, in Miller v. Kingsley, 194 Neb. 123, 125, 127, 230
N.W.2d 472, 474, 475 (1975), this court stated that a “forum
state need not give application to the statute of another state
where the statute is in conflict with the laws or policy of the
forum,” but that a “state may not refuse to enforce a judg-
ment of a foreign state on the ground that it would result in a
violation of the public policy of the forum state.” (Emphasis
in original.) Therefore, while a Nebraska court would not be
required to grant an adoption pursuant to California statutes
when such adoption would not be permitted under Nebraska
statutes, a Nebraska court may not refuse to recognize the
judgment consisting of an adoption decree validly entered by a
California court.
The Nixons cite Hood v. McGehee, 237 U.S. 611, 35 S. Ct.
718, 59 L. Ed. 1144 (1915), for the proposition that the Full
Faith and Credit Clause is not violated when a state excludes
children adopted in other states from inheriting property.
However, Hood v. McGehee does not control the present case.
Hood v. McGehee involved an Alabama statute which pro-
hibited inheritance by children adopted through proceedings
in other states. The U.S. Supreme Court held that the statute
did not violate the Full Faith and Credit Clause, because the
statute did not fail to give full credit to or “deny the effective
operation of the [other state adoption] proceedings.” 237 U.S.
at 615. Instead, the Alabama statute recognized out-of-state
adoptions but, notwithstanding recognition of the adoption,
specified that persons adopted in such proceedings were not
entitled to the same rights of inheritance as other children
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with respect to property in Alabama. Therefore, while a state
must give full faith and credit to an adoption decree from
another state, Hood v. McGehee stands for the proposition
that a state may by statute determine the inheritance rights
of an individual adopted in another state to property in the
forum state.
Unlike the facts at issue in Hood v. McGehee, Nebraska
has no statute prohibiting persons adopted in other states from
inheriting property. Instead, Nebraska probate statutes pro-
vide that “an adopted person is the child of an adopting par-
ent,” see Neb. Rev. Stat. § 30-2309 (Reissue 2008), and such
statutes make no distinction based upon where the adoption
proceedings took place. Our case law further indicates that the
expressed public policy under Nebraska law is that adopted
children are entitled to the same rights of inheritance as bio-
logical children. See, Satterfield v. Bonyhady, 233 Neb. 513,
446 N.W.2d 214 (1989); In re Trust Estate of Darling, 219
Neb. 705, 365 N.W.2d 821 (1985); Neil v. Masterson, 187 Neb.
364, 191 N.W.2d 448 (1971); In re Estate of Taylor, 136 Neb.
227, 285 N.W. 538 (1939).
The Nixons urge this court to hold as a matter of public
policy that an adoption is not valid for purposes of descent if
such adoption is a subterfuge done for the purpose of mak-
ing the adoptee a beneficiary under an existing testamentary
instrument. The Nixons cite to cases from other states endors-
ing such a policy. See Cross v. Cross, 177 Ill. App. 3d 588,
532 N.E.2d 486, 126 Ill. Dec. 801 (1988), and cases cited
therein. The matter of adoption is statutory, In re Adoption
of Kailynn D., 273 Neb. 849, 733 N.W.2d 856 (2007), and as
we recently observed, it is the Legislature’s function through
the enactment of statutes to declare what is the law and pub-
lic policy. State ex rel. Wagner v. Gilbane Bldg. Co., 276
Neb. 686, 757 N.W.2d 194 (2008). The Nixons argue that
the Legislature has expressed the policy it proposes, because
Nebraska adoption statutes do not allow the adoption of adults
except in certain specific situations not present here. However,
we find no clear indication that the public policy behind the
Nebraska adoption statutes is to prevent the use of adoption
to create inheritance rights. As noted above, the recognized
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public policy in Nebraska is that adopted children are entitled
to the same inheritance rights as biological children, and we
find no indication that this policy is not meant to apply to
those validly adopted under the laws of another state. We
decline to adopt the holding urged by the Nixons which would
deny effect to the California adoption at issue for inheritance
purposes in the absence of a clear indication that public policy
so requires.
Because we reject the Nixons’ assertion that the California
adoption decree violated Nebraska public policy and therefore
should not be given full faith and credit, we conclude that the
county court did not err in concluding that full faith and credit
should be given to the California adoption decree. Because of
such conclusion, we further conclude that the county court did
not err in finding Daley was Grace’s child. As the county court
noted, Nixon’s will defined “issue” to include “‘persons legally
adopted’” and the will did not specify that the term “children”
was to exclude adopted children. Because the county court did
not err in finding Daley to be Grace’s child, it further did not
err in finding Daley to be the sole beneficiary of Trust A and
in therefore ordering Wells Fargo to deliver the assets of the
trust to Daley.
CONCLUSION
We conclude that the county court did not err in concluding
that the California adoption decree was entitled to full faith
and credit in Nebraska. We therefore further conclude that the
county court did not err in finding Daley to be Grace’s child
and the sole beneficiary of Trust A and in therefore ordering
Wells Fargo to deliver the assets of Trust A to Daley.
aFFIrmed.
heavICan, C.J., participating on briefs.
IN RE TRUST CREATED By NIxON 	553
Cite as 277 Neb. 546