Jennifer Duncan v. Olga Rawls

Court of Appeals of Georgia·Decided June 15, 2021·No. A21A0258·Published

Opinion

FOURTH DIVISION

DILLARD, P. J.,

MERCIER and COLVIN, JJ.

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June 11, 2021

In the Court of Appeals of Georgia A21A0258. DUNCAN et al. v. RAWLS et al.

DILLARD, Presiding Judge.

Olga Rawls and Javier Goizueta (“petitioners”)—as trustees of a family trust created by their late mother Olga Casteleiro de Goizueta—brought an action against fourteen putative beneficiaries (“respondents”), seeking declaratory judgment that the trust was valid and claiming the respondents forfeited their distributions based on the trust’s in-terrorem (or no-contest) provision. Respondents challenged that provision and asserted counterclaims of undue influence, tortious interference with the expectation of a bequest, and breach of fiduciary duty, but the trial court granted summary judgment in favor of petitioners. Respondents appealed, and in Duncan v. Rawls (Duncan I),1 we affirmed the trial court’s ruling as to the general validity of the

1 345 Ga. App. 345 (812 SE2d 647) (2018) (en banc).

in-terrorem provision and held that it was enforceable as to respondents’ undue- influence claim, but reversed the court’s ruling that the clause was enforceable as to their breach-of-fiduciary-duty claim and remanded for the court to independently consider the clause’s applicability to respondents’ tortious-interference claim.2 Thereafter, petitioners again moved for summary judgment, arguing that the in- terrorem provision applied to respondents’ tortious-interference claim and that respondents’ breach-of-fiduciary-duty claim failed as a matter of law. The trial court granted summary judgment in favor of petitioners, and respondents now appeal. For the reasons set forth infra, we affirm.

Viewed in the light most favorable to respondents (i.e., the nonmoving parties),3 the record shows that on September 11, 2012, Olga Casteleiro de Goizueta—heir to the fortune of her late husband Roberto Goizueta4—executed a

2 See id. at 348-52 (1) (a), 2 (a) (b).

3 See, e.g., Swanson v. Tackling, 335 Ga. App. 810, 810 (783 SE2d 167)

(2016).

4 Roberto Goizueta was chairman, director, and chief executive officer of The Coca-Cola Company from 1980 until his death in 1997, and was perhaps equally well-known for his numerous philanthropic endeavors via the establishment of the Goizueta Foundation. See Roberto Goizueta, WIKIPEDIA, https://en.wikipedia.org/wiki/Roberto_Goizueta (last visited May 24, 2021).

durable power of attorney (“POA”), granting authority to her son Javier Goizueta and daughter Olga Rawls to undertake a variety of actions in her name and on her behalf. These actions included the power to create, revoke, or amend any trust for Mrs. Goizueta’s benefit, as well as “to do anything that I could do personally or as Trustee.” And immediately following this document’s general grant of authority, Mrs. Goizueta’s POA also provided that “. . . my agent(s) shall exercise the powers granted under this power of attorney only for my benefit (or for the benefit of my dependents or my descendants as specifically provided below) and as a fiduciary for me.”

In February 2013, Mrs. Goizueta executed the 31st Amendment and Restatement of her revocable pourover trust (the “February 2013 trust”), naming herself as the initial trustee and Javier Goizueta and Olga Rawls as first successor trustees. Additionally, the trust expressly reserved Mrs. Goizueta’s “right to alter, amend, modify, or revoke this trust in whole or in part at any time . . . by instrument in writing signed by [her] and delivered to the Trustee.” The February 2013 trust further provided that—other than the “Ten Dollars” paid to establish the trust—Mrs. Goizueta did not expect the trust to hold additional assets during her lifetime and, thus, that the trustees would have “no duties or obligations whatsoever during [her] lifetime.” Schedule B to this trust provided for specific monetary gifts for fifteen of

Mrs. Goizueta’s staff and employees—fourteen of whom are respondents in this matter5—to be distributed upon her death. But the trust provided that Mrs. Goizueta reserved the right to change these gifts by a written instrument signed by her and the trustees, and also noted that the trustees had absolute discretion “to determine the validity of any such written instrument amending Schedule B.” And indeed, in March 2013, Mrs. Goizueta exercised that right and amended Schedule B to reduce the amounts provided to some of the respondents.

On August 1, 2013, Mrs. Goizueta executed the 32nd Amendment and Restatement of her revocable pourover trust, which expressly “amend[ed] and restate[d] the [pourover trust], as in effect immediately prior to the execution of [the August 2013 Trust] instrument, in its entirety.” This August 2013 trust contained the same essential terms as the February 2013 trust with the notable exception that the latter instrument did not include Schedule B. Rather, it directed the trustee to use the Goizueta Family 2013 Trust (“Family Trust”), which was executed that same day, to fund charitable annuity payments to seventeen charitable organizations. Importantly,

5 As noted in Duncan I, the fourteen respondents are Jenifer Duncan, Jennifer Curry, Amanda Smith, Shelia McCloud, Rosalba Arellano Jones, Judy Cunningham, Gloria Espinosa, H.L. Bowen, Clyde Thomas Padgett, W.F. Timms, E.G. Brown, C.W. Payne, Stephen W. Norman, and Joseph Cochran. See Duncan, 345 Ga. App. at 345 n.1.

the August 2013 trust also contained a “No Contest Provision,”6 which provides, in relevant part, that under the following condition:

Should any beneficiary, singly or in conjunction with any other person or persons, directly or indirectly (whether or not in good faith and with probable cause) . . . , contest or initiate proceedings to contest in any court the validity of all or any part of my Will or this Agreement or any other trust created by me or, in any manner, attack or seek to impair or invalidate any of the provisions of my Will or this Agreement or any other trust created by me or to prevent any provision of my Will or this Agreement or any other trust created by me from being carried out in accordance with its terms . . . then all benefits provided for such beneficiary under this Agreement or any other trust created by me . . .

are revoked and annulled unless my Executor or my Trustee approves in advance in writing any such action on the basis that it is in the best interest of my estate or trust.

Additionally, in the aforementioned and contemporaneously executed Family Trust, Mrs. Goizueta named Olga Rawls and Javier Goizueta as initial trustees, as opposed to merely successor trustees as she had done in the February 2013 trust. But unlike the pourover trust, the Family Trust was irrevocable from its inception. This trust also provided that “[t]he Trustee shall make no distributions from this trust until

6 The February 2013 Trust included a nearly identical “No Contest Provision.”

the death of the Grantor.” And it further directed: “As soon as possible after [Mrs. Goizueta’s] death . . . assets of the trust . . . shall be distributed to or among such individuals . . . as the Trustee shall determine in its sole and absolute discretion.”

Mrs. Goizueta passed away in November 2015, and soon thereafter, petitioners—and now trustees—made distributions to twelve of the fourteen respondents from the Family Trust in amounts less than those listed in Schedule B of the February 2013 pourover trust but, nonetheless, totaling approximately $1.4 million. Subsequently, respondents retained counsel, who sent a letter to the petitioners requesting that, the August 2013 trust notwithstanding, they pay the full amounts provided in Schedule B of the February 2013 trust.

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