Grant v. Grant

734 So. 2d 68, 1999 WL 177576
CourtLouisiana Court of Appeal
DecidedApril 1, 1999
Docket31,599-CA
StatusPublished
Cited by1 cases

This text of 734 So. 2d 68 (Grant v. Grant) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grant v. Grant, 734 So. 2d 68, 1999 WL 177576 (La. Ct. App. 1999).

Opinion

734 So.2d 68 (1999)

Sarah Gail GRANT, Appellant/Appellee,
v.
Thomas A. GRANT, Appellee/Appellant.

No. 31,599-CA.

Court of Appeal of Louisiana, Second Circuit.

April 1, 1999.

*69 Rex D. Rainach, Baton Rouge, Felin J. Bruyninckx, III, Counsel for Appellant/Appellee.

Paul D. Spillers, George M. Snellings, IV, Monroe, Counsel for Appellee/Appellant.

Before NORRIS, WILLIAMS and PEATROSS, JJ.

WILLIAMS, Judge.

The plaintiff, Sarah Gail Grant, appeals a judgment denying her motion to appoint a provisional trustee to manage a trust, in which she is designated a beneficiary. The defendant, Thomas A. Grant, III, who is trustee, appeals that part of the judgment denying his motion to ratify an administrative amendment to remove the successor trustee. For the following reasons, we affirm.

*70 FACTS

In June 1982, T.A. Grant, Jr., and his wife, Martha B. Grant ("settlors"), established the Revocable Inter Vivos Trust ("RIVT"), a family class trust. During their lifetimes, the settlors had given substantial gifts to their two children, Thomas A. Grant, III and Joseph Bailey ("J.B.") Grant. In order to transfer their estate to their grandchildren, the settlors donated all of their assets to the RIVT. The grandchildren were the principal beneficiaries and the settlors were the income beneficiaries for the remainder of their lives. T.A. Grant, Jr. died in July 1982, and Martha Grant died in 1986. Following each parent's death, the defendant and J.B. Grant signed a document renouncing their rights to demand a reduction of the legacies and donations made in their parents' wills and the trust.

Upon Martha Grant's death, the grandchildren became the income and principal beneficiaries of the RIVT. The four beneficiaries include T.A. Grant, IV, Martha Cecile Grant, and Richard Grant, the children of Thomas Grant, III, and Sarah Gail Grant, the daughter of J.B. Grant. Under the terms of the trust, Thomas Grant, III was designated as the trustee of the RIVT, and if he became unable to serve, J.B. Grant was named as the successor trustee. E. Bailey Grant was designated as the co-trustee.

Since 1982, Thomas Grant, III has managed the RIVT with the assistance of successive co-trustees. Initially, the trust was encumbered with substantial debt which had been incurred by the settlors prior to the donation of their assets. This debt was extinguished in 1992. The current co-trustee is James E. Lowery.

This litigation was initiated in February 1997, when the plaintiff, Sarah Gail Grant, filed a Rule for Accounting against the defendant, Thomas Grant, III, as trustee of the RIVT. The plaintiff was represented by Rex Rainach, who was also the attorney for her father, J.B. Grant. The defendant, as trustee, filed a motion to disqualify counsel, Rex Rainach, because of his dual representation of plaintiff and J.B. Grant, whose interests were potentially adverse. The district court declined to disqualify Rainach, but appointed another attorney to act as a "special `overseer' for the ethical interest" of the plaintiff. However, this overseer was later excused due to his own conflicts of interest, and there is not an ethics adviser currently serving. Defendant applied for a supervisory writ in this court, which refused to disturb the district court's decision. Grant v. Grant, 30,190-CW (La.App.2d Cir.6/26/97). The district court ordered that the defendant provide to plaintiff an accounting of trust funds from its inception.

Subsequently, the defendant and Lowery executed an "administrative amendment" to the RIVT seeking to remove J.B. Grant as successor trustee and eliminate the possibility that he would become trustee upon defendant's death. Defendant filed a motion requesting that the court ratify this amendment. Plaintiff responded by filing an opposition to the motion to ratify and a "Motion to Appoint Co-trustee or Provisional Trustee."

After a hearing, the trial court rendered judgment denying defendant's motion to ratify the amendment and denying plaintiff's motion to appoint a provisional trustee. In its written reasons, the trial court stated that although the terms of the trust and LSA-R.S. 9:2025 gave the trustee authority to modify trust administrative provisions, the court declined to ratify defendant's amendment because "ratifying such an action would ... decide an issue which should have been brought by ... declaratory judgment."

In a footnote, the court noted that plaintiff's motion to appoint a provisional trustee sought the constructive removal of defendant as trustee. The court stated that a trustee may only be removed for "cause," which places the trust in jeopardy. The trial court found that although certain actions of the defendant as RIVT *71 trustee could appear questionable, the conduct was not sufficient "cause" to warrant the removal or temporary replacement of defendant as trustee. Each party has appealed the judgment.

DISCUSSION

In three assignments of error, the plaintiff contends the trial court erred in refusing to appoint a provisional trustee. Plaintiff first argues that a provisional trustee is required because defendant was not given authority under the trust to appoint successive co-trustees and that a qualified trustee is not currently serving.

The Louisiana Trust Code defines a trust as the relationship resulting from the transfer of title to property to a person to be administered by him as a fiduciary for the benefit of another. LSA-R.S. 9:1731. A trustee is a person to whom title to the trust property is transferred for administration as a fiduciary. LSA-R.S. 9:1781. An original, alternate, or successor trustee may be designated in the trust instrument or chosen as provided therein. LSA-R.S. 9:1785.

Here, the trust instrument designated the defendant and E. Bailey Grant as co-trustees. The trust provides that defendant "shall have the power to remove E. BAILEY GRANT as co-trustee and shall appoint a successor co-trustee in the event of his removal, or inability to serve for any other reason. If T.A. GRANT, III, should become unable or unwilling to serve, we appoint JOSEPH BAILEY GRANT as successor trustee."

In her brief, plaintiff contends that although the trust allowed defendant to select Walter Dunn as a replacement co-trustee after E. Bailey Grant's resignation, defendant did not have the authority to appoint subsequent co-trustees after Dunn resigned, at which point the co-trusteeship terminated. Plaintiff asserts that J.B. Grant is thus the sole trustee, but since he cannot serve due to his existing conflict with the trust, a provisional trustee must be appointed. However, a reasonable reading of the trust language does not support the plaintiff's assertion. The trust provision gave defendant the authority to remove E. Bailey Grant, or if he ceased to serve, directed the defendant to appoint a successor co-trustee. The trust instrument does not otherwise require or prohibit the appointment of subsequent co-trustees. When this provision is considered in light of the trust terms giving the defendant broad discretion in managing the trust, the appointment of successive co-trustees is not inconsistent with defendant's duties as trustee.

The plaintiff next argues that a provisional trustee is required because defendant has breached his duties by neglecting to issue reports of trust activity to the beneficiaries, improperly making payments of trust income to several individuals who are not beneficiaries, and by failing to collect trust assets.

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Bluebook (online)
734 So. 2d 68, 1999 WL 177576, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grant-v-grant-lactapp-1999.