Justia Trusts & Estates Opinion Summaries

Two appeals arose from a dispute between four siblings about the management of trusts set up by their parents. The siblings -- Lenn Rainwater ("Lenn"), Charles Edward Rainwater ("Charles"), Jean Rainwater Loggins, and Mary Rainwater Breazeale -- executed a settlement agreement resolving their dispute. In appeal no. 1190952, the parties petitioned the Alabama Supreme Court to consider whether that agreement should have been declared void. Lenn also sought to garnish trust assets that she says were hers. In appeal no. 1190951, the Supreme Court was asked to decide whether those garnishment proceedings should have been quashed. The Court ultimately did not reach either of those issues because both appeals should been dismissed: appeal no. 1190952 was filed too late and appeal no. 1190951 was filed too soon. View "Lem Harris Rainwater Family Trust et al. v. Rainwater" on Justia Law

Damon Stephens appealed a circuit court order ordering that certain property located on Old Railroad Bed Road in Toney, ("the property"), be partitioned by sale, pursuant to the Alabama Uniform Partition of Heirs Property Act ("the Heirs Act"). In September 2017, Michael Claridy filed a complaint to quiet title to the property and requested that the circuit court partition the property by sale on the basis that the property could not be equitably divided or partitioned in kind. Stephens acquired his interest in the property in 2019; he has neither lived on the property nor paid taxes on the property. Stephens stated that he had lived on the property and made improvements to some of the buildings there. Following an initial hearing, the circuit court determined that the property was heirs property governed by the Heirs Act. Based on the testimony, the evidentiary materials, and the judge's personal observation of the property, the circuit court concluded that there was no method by which the property could be partitioned in kind to adequately preserve each cotenant's interest in the property. Accordingly, the circuit court entered a detailed judgment ordering that the property be partitioned by sale via public auction. Stephens contended the circuit court erred by ordering a partition by sale because, he contended, the court considered only one factor in its analysis, provided no discussion of the other factors, and provided no analysis regarding whether any particular cotenant would be greatly prejudiced by a partition in kind. Finding no reversible error, the Alabama Supreme Court affirmed the circuit court's order. View "Stephens v. Claridy" on Justia Law

In this litigation between the beneficiaries and trustees of two trusts the Supreme Court affirmed the judgment of the superior court granting the trustees' petition for their services and expenses, including attorneys' fees incurred on behalf of the trusts and interest owed on those fees, holding that there was no error.The trial justice determined that the trustees were entitled to be indemnified for their attorneys' fees after considering the beneficiaries' arguments against payment of attorneys' fees. The court then entered judgment stating that reasonable attorneys fees were to be indemnified by the trust, that an unpaid balance remained, and that interest on the attorneys' fees would accrue through the conclusion of any appeal. The Supreme Court affirmed, holding (1) the beneficiaries' argument that the trustees should not be awarded fees for pursuing their own fees was waived; and (2) the trial justice properly awarded interest as an expense reasonably incurred in the administration of the trust. View "Kumble v. Voccola" on Justia Law

The Supreme Court reversed an order of the district court affirming an administrative law judge's proposed order that trust principal consisting of a jointly owned home constituted a countable asset for the purpose of the Medicaid eligibility of Marilyn Scheidecker, holding that there were no circumstances under which payment from the trust's corpus could be made for Marilyn's benefit.The Montana Department of Public Health and Human Services denied Marilyn's application for Medicaid, concluding that Marilyn's one-half interest in the trust's principal was a countable resource placing her over Medicaid's resource limit. The ALJ upheld the denial. The district court affirmed the ALJ's ultimate conclusion that the trust was a countable asset pursuant to 42 U.S.C. 1396p(d)(3), holding that circumstances existed by which payments form the trust's corpus could be made to or for Marilyn's benefit. The Supreme Court reversed, holding that the district court was incorrect in its application of the federal statute. View "Estate of Scheidecker v. Montana Department of Public Health & Human Services" on Justia Law

Plaintiff filed suit against PNC Bank and PNC Investments for mishandling an investment account that belonged to plaintiff and her deceased mother. The district court sua sponte ordered briefing on the probate exception to federal diversity jurisdiction, concluded that plaintiff was "attempting to circumvent the normal probate process by bringing an individual claim against PNC Bank," and dismissed the case. The district court also held that plaintiff had no standing to sue.The Eleventh Circuit reversed, concluding that neither the probate exception nor standing doctrine divests the district court of jurisdiction over this lawsuit. The court concluded that the district court erred in dismissing the case under the probate exception because it can adjudicate her claims for damages against PNC without probating her mother's will, administering the estate, or disposing of the estate's property. The court also concluded that plaintiff is the real party in interest and has standing to bring her claims. The court remanded for further proceedings. View "Fisher v. PNC Bank, N.A." on Justia Law

The Supreme Court reversed the judgment of the district court determining that Shawn Zutavern and his son, Russell Zutavern, were not beneficiaries of a trust created by Shawn's father, William Zutavern, and lacked standing to assert an action against the trusts's trustee, holding that the district court erred in relying upon Neb. Rev. Stat. 30-3855(d) to conclude that the trustee exclusively owed duties to Wm. Zutavern Cattle Co. (WZCC).Shawn and Russell petitioned the district court for removal of Meredith Zutavern, William's surviving spouse, as trustee of the William R. Zutavern Revocable Trust. Shawn and Russell then moved to enjoin Meredith's potential sale of the family ranch, managed by WZCC. The district court dismissed the petition and motion for temporary injunction, finding that Shawn and Russell lacked standing because they were not named beneficiaries under the trust. The Supreme Court reversed and remanded the case, holding (1) Shawn and Russell were beneficiaries and had standing; and (2) the district court's interpretation of section 30-3855(d) was erroneous. View "In re William R. Zutavern Revocable Trust" on Justia Law

The Ninth Circuit certified the following questions to the Montana Supreme Court: 1. Under Montana law, for a claim that accrued prior to the effective date of Mont. Code Ann. 27-1-308 (2021), may a plaintiff in a survival action recover the reasonable value of medical care and related services when the costs of such care or services are written-off under the provider's charitable care program? 2. For a claim that accrued prior to the effective date of Mont. Code Ann. 27-1-308 (2021), does a charitable care write-off qualify as a collateral source within the meaning of section 27-1-307? If so, does a charitable care write-off qualify for the "gifts or gratuitous contributions" exception under section 27-1-307(1)(c)? View "Gibson v. United States" on Justia Law

The Court of Appeal affirmed the trial court's grant of plaintiff's motion to further amend the judgment entered against Raleigh Souther and Get Flipped, Inc. by adding defendant as a judgment debtor.The court concluded that adding defendant as a judgment debtor is neither unnecessary nor unfair; the order was not barred by claim or issue preclusion; and the record adequately supports the trial court's order. In this case, the Estate presented evidence that Moofly Productions was inadequately capitalized since all of its assets were being controlled by defendant and, as a corollary, that the entity and defendant had commingled funds. Furthermore, other facts considered in alter ego cases, an arguable lack of adherence to corporate formalities and business registration laws, also supported the trial court's determination. Most importantly, as established by the fraudulent conveyance judgment when considered together with the additional information concerning defendant's control of the Moofly Productions' bank accounts, failing to formally recognize defendant as a judgment debtor would produce an inequitable result, effectively preventing the Estate from enforcing the judgment it had obtained against Get Flipped, precisely the corrupt goal defendant sought to achieve. The court noted that the issue of control is not significant under the circumstances here. In any event, a judgment debtor may be added if the equities overwhelmingly favor the amendment and it is necessary to prevent an injustice, even if all the formal elements generally necessary to establish alter ego liability are not present. Finally, the court concluded that the amendment is not barred by laches. View "Corrales Favila v. Pasquarella" on Justia Law

These consolidated appeals involved the Frederick Tildon Skelton, Jr., Family Trust ("the trust") and its primary asset, shares of stock in South Haven Corporation ("South Haven"). In appeal no. 1190700, Frederick Tildon Skelton IV and Brian Rutledge Skelton challenged the May 4, 2020 probate court judgment terminating the trust. In appeal no. 1190917, those same parties challenged the July 17, 2020 circuit court judgment dismissing their claims relating to the administration of the trust and their derivative claims asserted on behalf of South Haven. After Mrs. Skelton died, Brian Lee, who was serving as South Haven's president at the time, became the successor trustee of the trust. However, Brian Lee died in July 2016, before fully discharging his duties as trustee by dividing the trust property and making a final distribution of the trust corpus to the remainder beneficiaries of the trust. Brian Lee's widow, Evangela Taylor Skelton ("Angel"), was appointed as the personal representative of Brian Lee's estate. After Brian Lee's death, there was no acting trustee, but it was undisputed that the remainder beneficiaries of the trust were: Brian Lee's estate, Joshua, the nephews, and Loree (referred to collectively as "the beneficiaries"). In September 2016, Loree, individually and on behalf of South Haven, commenced an action in the circuit court against Angel, individually and in her capacity as the personal representative of Brian Lee's estate ("the circuit-court action"). In that action, Loree alleged that Brian Lee, while an officer, director, and shareholder of South Haven, and Angel had misappropriated South Haven's assets for their personal benefit to the detriment of the other shareholders or putative shareholders of the corporation. The nephews filed a motion to intervene in the circuit-court action to assert claims on behalf of South Haven against Loree and Angel; the nephews asserted that both Brian and Loree misappropriated South Haven's assets for their personal benefit to the detriment of the other shareholders or putative shareholders of the corporation. Following mediation, Loree, Joshua, and Angel, individually and as personal representative of Brian Lee's estate, reached a proposed settlement. The nephews opposed that settlement, however; thus, it was never finalized. In November 2017, the nephews, as beneficiaries of the trust, filed a petition in the probate-court action, asserting various claims and counterclaims and seeking affirmative relief relating to the administration of the trust. The Alabama Supreme Court found the probate court was justified in terminating the trust and the circuit court was the appropriate venue to litigate all remaining claims, including the nephews' trust claims. View "Skelton v. Skelton" on Justia Law

Employer-appointed trustees filed a complaint in the district court seeking the appointment of an impartial umpire to resolve a deadlock on a motion, pursuant to Section 302(c)(5) of the Labor Management Relations Act, brought by one of the employer-appointed trustees. The district court dismissed the complaint and declined to appoint an umpire.The Eighth Circuit affirmed, concluding that, based on the entirety of the Trust Agreement, the delegation proposed by the employer trustees' motion is beyond the trustees' authority to implement. The court explained that because the proposed delegation and amendment to the Trust Agreement are beyond the trustees' authority to implement, the deadlocked motion is not a matter arising in connection with the administration of the plan or a matter within the trustees' jurisdiction. Therefore, the Trust Agreement does not authorize the appointment of a neutral umpire to resolve the deadlocked motion. Furthermore, because the court found that adopting the employer trustees' proposed motion would require amending the Trust Agreement, the court also necessarily concluded that the deadlocked motion does not concern trust fund "administration" under section 302(c)(5). Accordingly, the deadlocked motion is not a matter of trust "administration" under either the Trust Agreement or section 302(c)(5), and thus the district court did not err in declining to appoint an umpire. View "Gillick v. Elliott" on Justia Law