Jury trials in civil litigation are inherently unpredictable – a reason why over 90 percent of civil cases settle before, or during trial. With respect to trust and estate litigation, i.e., litigation typically brought by a disgruntled (often disinherited) “would be” beneficiary challenging the validity of a trust, will or other estate planning instrument, these issues are of particular concern. In trust and estate litigation, juries may have an inclination to render a verdict they believe is “fair” to all parties, no matter what the facts or law may support. This presents a real concern for trustees, executors, family members, beneficiaries and attorneys trying to defend a decedent’s estate plan against such attacks.
Fortunately, it appears that Kentucky law provides an effective method by which defendants in trust and estate litigation may seek to avoid the risks of an “activist” jury. Where there is an action for declaratory judgment by a disgruntled plaintiff that solely seeks to invalidate a trust, will, or other estate planning instrument, many circuit courts interpreting Kentucky law conclude that such claims must be adjudicated by the court, and not by a jury.
CR 38.01 provides: “The right of trial by jury as declared by the Constitution of Kentucky or as given by a statute of Kentucky shall be preserved to the parties inviolate.” Accordingly, the right to a jury is only guaranteed if required by the Constitution or by statute. But an action solely seeking to invalidate a document transferring real or personal property, like a trust or other estate planning instrument, is an “action at equity” that is to be adjudicated by the court. The case of Averitt v. Bellamy, 406 S.W.2d 410 (Ky. 1966), applies to such claims. In Averitt, the Kentucky Supreme Court ruled that CR 38.01 does not entitle the plaintiff in a declaratory judgment action to a jury trial: “A suit to set aside the transfer of real or personal property is peculiarly one of equitable cognizance. Regardless of demand, no party has a right to a jury trial (CR 38.01).” Id. at 411.
Indeed, Kentucky law appears to be settled that declaratory judgment actions are generally conceived of as equitable claims. InTriplett v. Livingston Cnty. Bd. of Educ., 967 S.W.2d 25 (Ky. App. 1997), the Court of Appeals affirmed the trial court’s ruling in a declaratory judgment action that: “since the petition was for declaratory judgment seeking a permanent injunction, it was an equitable action in which the court must decide both issues of law and fact.” Id. at 29; see also Marrs v. Kelly, 95 S.W.3d 856, 864 (Ky. 2003)(Cooper, J., Concurring in Part and Dissenting in Part)(“A declaratory judgment action is a non-jury trial and involves the trial court in findings of fact as well as conclusions of law...”). Further, in Smith v. Bear, Inc., 419 S.W.3d 49 (Ky. App. 2013), review denied(Feb. 12, 2014), the Court of Appeals recognized that “jury trials are only a constitutional right when the issues are at law, rather than in equity. Our Supreme Court has held ‘equitable issues are not triable by juries unless agreed to by the parties.’” Id. at 57-58;see also Schultz v. Gen. Elec. Healthcare Fin. Servs., Inc., 360 S.W.3d 171, 175 (Ky. 2012)(holding that equitable issues are not triable by juries unless agreed to by the parties)(citing Daniels v. CDB Bell, LLC, 300 S.W.3d 204, 210 (Ky. App. 2009)).
Some “right” to a jury trial in declaratory judgment actions is not guaranteed by either the Constitution or Kentucky’s Declaratory Judgment statute. As set forth above, Kentucky’s Constitution does not guarantee a party the right to a jury trial in equitable actions. In addition, Kentucky’s Declaratory Judgment statute, KRS 418.040, does not provide a right to a jury trial:
In any action in a court of record of this Commonwealth having general jurisdiction wherein it is made to appear that an actual controversy exists, the plaintiff may ask for a declaration of rights, either alone or with other relief; and the court may make a binding declaration of rights, whether or not consequential relief is or could be asked. (Emphasis added).
Further, CR 57 governs declaratory judgment actions and does not guarantee a right to a jury trial. CR 57 simply provides that there may be a right to a jury if provided by CR 38 or 39. However, as set forth above, neither Civil Rule provides such a “right.” A jury trial may only be permitted in such circumstances if consented to by all parties. (See CR 39.03.)
Defense counsel in Kentucky state court declaratory judgment actions which seek to invalidate a trust, estate or other instrument should strongly consider moving for a bench trial on these claims. If counsel determines that the particular circumstances weigh against a bench trial, they may consent to a jury trial. In most circumstances, however, adjudication of the claims by the court instead of a jury is likely to be more favorable to the defense.