Justia Trusts & Estates Opinion Summaries

Little Hearts Marks Family II L.P. ("Little Hearts") was a member of 305 East 61st Street Group LLC, a company formed to purchase and convert a building into a condominium. 61 Prime LLC ("Prime") was the majority member and manager, and Jason D. Carter was the manager and sole member of Prime. In 2021, the company filed for bankruptcy and sold the building to another company created by Carter. The liquidation plan established a creditor trust with exclusive rights to pursue the debtor’s estate's causes of action. Little Hearts sued Prime and Carter for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment, seeking damages for lost capital investment and rights under the Operating Agreement.The bankruptcy court dismissed all claims, ruling that they were derivative and belonged to the debtor’s estate, thus could only be asserted by the creditor trustee. The district court affirmed this decision.The United States Court of Appeals for the Second Circuit reviewed the case. The court affirmed the dismissal of the breach of fiduciary duty and aiding and abetting breach of fiduciary duty claims, agreeing that these were derivative and could only be pursued by the creditor trustee. However, the court vacated the dismissal of the breach of contract and breach of the implied covenant of good faith and fair dealing claims, determining that these were direct claims belonging to Little Hearts and could proceed. The unjust enrichment claim was dismissed as duplicative of the contract claims. The case was remanded for further proceedings consistent with this opinion. View "In re 305 East 61st Street Group LLC" on Justia Law

Attorney Barry Tarlow executed a will in 2005, with minor modifications in 2006, leaving his estate to be divided between his siblings, Barbara Tarlow Rapposelli and Gerald Tarlow. Gerald was to receive his share outright, while Barbara's share was to be placed in a trust, with David Henry Simon named as trustee. Barry Tarlow passed away in April 2021, and the will was admitted to probate in July 2021. Barbara and Gerald became executors of the estate, while Simon retained his role as trustee.Barbara and Gerald filed an ex parte petition in January 2022 to replace Simon as trustee and modify the trust terms, which was denied. They later filed a petition for final distribution of the estate in July 2022, stating that Barbara had disclaimed her share, leading to a redistribution of the estate. Simon objected, arguing that Barbara's disclaimer was improper and filed his own petition under section 11700, seeking distribution of Barbara's interest to him as trustee and to rescind Barbara's purchase of the Fidelity Fund's interest in the trust. The trial court sustained Barbara and Gerald's demurrer, ruling Simon lacked standing.The California Court of Appeal, Second Appellate District, Division Four, reviewed the case. The court held that Simon, as the named trustee, had standing under section 11700 to file a petition for distribution of the estate. The court found that Simon's claim to the estate assets as trustee made him a person entitled to distribution under the statute. The court reversed the trial court's order sustaining the demurrer and remanded the case for further proceedings consistent with sections 11700 et seq. and the opinion. View "In re Estate of Tarlow" on Justia Law

Mary Langbehn sued her son, Michael Langbehn, and his company, Langbehn Land and Cattle Co. (LL&C), alleging Michael breached his fiduciary duty as a co-trustee of his deceased father’s trust. Michael filed counterclaims for unjust enrichment and quantum meruit related to improvements he claimed to have made to real estate he leased from his father’s trust and Mary’s separate living trust. The circuit court granted summary judgment in favor of Mary on her claims and on Michael’s counterclaims. The court also removed Michael as a co-trustee and awarded Mary $513,796.94 in damages. Michael appealed.The Circuit Court of the Third Judicial Circuit in Beadle County, South Dakota, found that Michael had engaged in self-dealing and breached his fiduciary duty of loyalty to the credit trust by profiting from subleases. The court concluded that Michael failed to keep Mary reasonably informed and acted in bad faith. The court granted summary judgment on Mary’s claims and Michael’s counterclaims, and removed Michael as a co-trustee.The Supreme Court of the State of South Dakota reviewed the case. The court held that Michael did not engage in impermissible self-dealing because the trust instrument expressly allowed him to lease the land at below-market rates. However, the court found that genuine issues of material fact remained regarding whether Michael disclosed the subleases and additional income to Mary. The court reversed the summary judgment on Mary’s breach of fiduciary duty claims and the decision to remove Michael as a co-trustee, remanding for further proceedings. The court affirmed the summary judgment on Michael’s counterclaims for unjust enrichment and quantum meruit, as there was no evidence that Mary requested or agreed to pay for the improvements. View "Langbehn V. Langbehn" on Justia Law

An Indiana trust beneficiary sued the trustee, an Indiana bank, in an Indiana trial court over the disposal of trust property. The trust, which holds Illinois real estate, is governed by Illinois law and includes mostly Illinois beneficiaries. The trial court dismissed the action for lack of subject-matter jurisdiction, questioning the appropriateness of resolving Illinois-centered issues in Indiana.The Vigo Superior Court dismissed the case, agreeing with the trustee that Indiana lacked subject-matter jurisdiction because the trust was administered in Illinois. The Indiana Court of Appeals reversed this decision, ruling that the trial court had jurisdiction over the Indiana suit despite the trust's Illinois connections. The appellate court distinguished this case from In re Alford Trust, which held that Indiana courts lack jurisdiction over trusts administered exclusively in another state.The Indiana Supreme Court reviewed the case and held that the trial court has subject-matter jurisdiction over the dispute. The court clarified that Indiana superior courts have broad civil jurisdiction, including over trust disputes, and that venue provisions do not affect jurisdiction. The court disapproved of the Alford Trust decision for conflating jurisdiction with prudential concerns like venue and choice of law. The court noted that while the trial court has jurisdiction, it may still dismiss the case under doctrines like comity or forum non conveniens if appropriate. The Indiana Supreme Court reversed the trial court's dismissal and remanded the case for further proceedings. View "Tingley v. First Financial Bank" on Justia Law

Scott Packard (Scott) appealed an order granting judgment in favor of Gregory Roy Packard (Greg), as trustee of the Newton Roy Packard Trust, on Scott’s petition to reform an amendment to the trust. Scott argued that the probate court erred in finding his petition constituted a trust contest subject to a 120-day statute of limitations under Probate Code section 16061.7.The Superior Court of San Diego County had granted Greg’s motion for judgment on the pleadings, concluding that Scott’s petition was a trust contest and thus barred by the statute of limitations. The court found that the handwritten interlineation in the trust amendment was unambiguous and that Scott’s petition effectively sought to invalidate this amendment, constituting a contest to the trust.The Court of Appeal, Fourth Appellate District, Division One, State of California, reviewed the case. The court concluded that Scott’s petition was not a trust contest but rather a request to reform the trust to correct an alleged mistake in the trustor’s expression of intent. The court held that Scott’s petition was not subject to the 120-day statute of limitations for trust contests. The court emphasized that reformation petitions, which seek to correct a mistake to reflect the true intent of the trustor, do not constitute contests to the trust.The appellate court reversed the probate court’s order granting judgment on the pleadings and remanded the case for further proceedings consistent with its opinion. The court directed the probate court to deny Greg’s motion for judgment on the pleadings, allowing Scott the opportunity to prove his claim by clear and convincing evidence. Scott was awarded his costs on appeal. View "Packard v. Packard" on Justia Law

Walter Bedford Jr., an attorney admitted to practice law in 1974, prepared a will for Clara Howard Jackson in 2016, naming himself as executor and Margaret Hayes as the sole beneficiary. After Jackson's death in 2019, Bedford delayed filing the probate petition and missed court dates. He was eventually appointed executor but failed to manage the estate properly, writing checks to himself for unearned fees and depleting the estate's funds. Hayes, the beneficiary, had to hire another attorney to remove Bedford as executor and filed a bar complaint against him.The Inquiry Commission issued a three-count charge against Bedford for failing to act with diligence, failing to safekeep the estate property, and failing to return estate funds after removal as executor. Bedford admitted to these violations. He requested to be placed on Honorary Membership Inactive Status and proposed a negotiated sanction of a public reprimand and repayment of the unearned fees.The Supreme Court of Kentucky reviewed the proposed sanction and found it appropriate. The Court noted similar cases where public reprimands and repayments were ordered for comparable misconduct. Considering Bedford's substantial experience, lack of prior discipline, personal hardships, and remorse, the Court concluded that a public reprimand and repayment of the unearned fee were suitable sanctions.The Supreme Court of Kentucky publicly reprimanded Bedford and ordered him to repay $5,979.00 to the estate within one year. Bedford was also directed to pay the costs associated with the disciplinary proceedings. View "In re Bedford" on Justia Law

Warren Dan Eddleman passed away on August 5, 2022, leaving a will that named Tom Wagoner as the personal representative (PR) and John Pinkerton as the sole devisee. Several creditors, including Eddleman's ex-wife Sandra, daughter Madelyn, sister Jobey, the Eddleman Oar Lock Ranch, LLC, and the Madelyn Lue Eddleman Trust, filed claims against the estate. The PR disallowed some claims and allowed others in part. The PR and the claimants agreed to a first extension of time for the claimants to respond to the disallowances, extending the deadline to June 23, 2023. As the deadline approached, the PR's counsel assured the claimants that he would not seek to bar their claims if a second extension was not granted by the deadline.The District Court of the Thirteenth Judicial District initially granted the second extension but later rescinded it upon John Pinkerton's motion to reconsider, effectively barring the pending creditors' claims. The claimants appealed, arguing that the PR had the authority to extend the timeframe without the devisee's consent, that the devisee's consent had been obtained in a prior memorandum of understanding, and that the estate was estopped from asserting the claims were time-barred based on the PR's counsel's representations.The Supreme Court of the State of Montana reviewed the case and concluded that the PR lacked the authority to unilaterally extend the timeframe for the claimants to respond to the disallowances without the consent of the sole devisee, John Pinkerton. However, the court also found that the estate was equitably estopped from raising a claim processing time-bar defense due to the PR's counsel's assurances to the claimants. The court reversed the District Court's decision and remanded the case for further proceedings, allowing the claimants' petitions for allowance to be considered as timely filed. View "In re Estate of Eddleman" on Justia Law

Raymond A. Guenther, Jr. died intestate, and Damon Bechtold was appointed as the personal representative of his estate. Bechtold managed the estate's assets, paid claims, and filed a petition for complete settlement, which included a final accounting and a schedule of distribution listing Raymond A. Guenther, Sr. as the sole heir. The county court approved the final accounting and directed the distribution of the estate's assets to Guenther Sr. The final accounting did not list any personal representative fees.Several months later, Bechtold filed a motion seeking fees for his services as personal representative. The county court denied the motion, stating that the earlier order of complete settlement was a final, appealable order, and Bechtold had not filed a timely appeal. Bechtold then appealed the denial of his motion for fees.The Nebraska Supreme Court reviewed the case and determined that the order of complete settlement, which approved the final accounting and directed the distribution of the estate's assets, was a final, appealable order regarding Bechtold's entitlement to fees. Since Bechtold did not appeal this order within the required timeframe, the court concluded that it lacked jurisdiction to review the denial of his subsequent motion for fees. Consequently, the appeal was dismissed. View "In re Estate of Guenther" on Justia Law

Robert Mack, a beneficiary of his parents' estates, contested the distribution of assets from his mother’s will and his father’s testamentary trust. After his parents passed away, his brothers Hugh and Eric, acting as co-personal representatives and co-trustees, filed a petition for distribution to Robert. The circuit court approved the distribution after Robert’s attorney did not object at the hearing. Robert later obtained new counsel and filed a motion for relief from the order of distribution, claiming his previous attorney did not inform him of the hearing or the proposed distribution.The Circuit Court of the Third Judicial Circuit in Codington County, South Dakota, denied Robert’s motion for relief under SDCL 15-6-60(b). The court found Robert’s claim that he had no communication with his attorney since late 2022 not credible, based on his previous conduct in court proceedings. The court also concluded that the order of distribution was fair and equitable, despite Robert’s request for an evidentiary hearing to contest the valuation of the estate assets.The Supreme Court of the State of South Dakota reviewed the case and found that the circuit court abused its discretion in denying Robert’s motion for relief. The Supreme Court noted that Robert’s affidavit, which stated he had no knowledge of the hearing or the proposed distribution, was unrefuted. Additionally, the court highlighted the pending disciplinary proceedings against Robert’s former attorney, which raised concerns about the attorney’s ability to practice law. The Supreme Court reversed the circuit court’s decision and remanded the case with directions to grant the motion for relief from the order of distribution and to set an evidentiary hearing on the petition for distribution. View "In the Matter of the Estate Of Mack" on Justia Law

Brett Kingstone and Trisa Tedrow Kingstone were married in Florida in July 2020 and have one minor child, L.R.K., born in 2021, who has hemophilia, Fragile X syndrome, and developmental and speech delays. The couple separated in August 2022, and Brett initiated a divorce action in Florida and a child custody action in North Dakota in March 2023. The Florida court granted the divorce in August 2023, but did not address child-related issues. In December 2023, the North Dakota district court awarded Trisa primary residential responsibility for L.R.K. and set Brett's child support at $5,000 per month, including an upward deviation of $1,500.Brett Kingstone appealed, arguing the district court erred in several aspects, including reliance on expert testimony, calculation of his net income, the upward deviation of child support, and refusal to amend the judgment. The district court had denied Brett's motion to amend the judgment but clarified the exchange location for L.R.K. would be at the child's home unless mutually agreed otherwise.The North Dakota Supreme Court reviewed the case. It held that the district court did not abuse its discretion in relying on the expert witness to determine Brett's income, including income from irrevocable trusts and recurring capital gains. However, the Supreme Court found the district court's findings insufficient to support the upward deviation in child support under the guidelines and remanded for additional findings and redetermination. The Supreme Court also directed the district court to reconsider the amount of the life insurance policy based on the redetermined child support obligation. The court affirmed the district court's decision regarding the exchange provisions for L.R.K. and the requirement for Brett to maintain a life insurance policy for the child. View "Kingstone v. Kingstone" on Justia Law