Pulliam v. Murphy

2016 Ark. App. 133, 485 S.W.3d 711, 2016 Ark. App. LEXIS 140
CourtCourt of Appeals of Arkansas
DecidedMarch 2, 2016
DocketCV-15-630
StatusPublished

This text of 2016 Ark. App. 133 (Pulliam v. Murphy) is published on Counsel Stack Legal Research, covering Court of Appeals of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pulliam v. Murphy, 2016 Ark. App. 133, 485 S.W.3d 711, 2016 Ark. App. LEXIS 140 (Ark. Ct. App. 2016).

Opinion

BART F. VIRDEN, Judge

11Appellant Rikka I. Pulliam filed a complaint against appellees Sherry P. Murphy, R. Carter Pulliam, and Richard Pulliam, as cotrustees of the-Ray H. Pulliam Living Trust, alleging breach of the trust agreement. The Crittenden County Circuit Court granted summary judgment to ap-pellees. On appeal, Rikka argues that ap-pellees owed a duty of loyalty to her in their administration of the trust and that genuine issues of material fact exist as to whether they bréaehed that duty. We reverse and remand for trial.

I. Background and Procedural History

In June 1997, Ray H. Pulliam and lone 0. Pulliam created a living trust involving 1,320 acres of farmland for the benefit of their five adult children. After the Pul-liams had passed away, four of those children, including Rikka, became cotrustees. Article Seventeen, section five of the trust provided,

laSpecial Instructions Regarding the Farm. During my life, my spouse and I have owned tracts of land which we have referred to among ‘ourselves and our family as' “the farm.” ■ The farm is the real property to be administered 'under Article Eleven pf this agreement upon the death of both my spouse and I. One and a half acres of the farm was sold to our son, R. Carter Pulliam, for consideration of $7,500 ($5,000 per acre) during my lifetime. My Trustee shall offer to any of my other children the same privilege to purchase one and a half acre of land at the same consideration. The consideration need not be actual cash but may also be improvements or work on the farm, for example, but any construction must be farm related. In other words, the construction cannot be a garbage' dump, gravel storage or beer parlor, etc.

(Emphasis added.)

In addition to owning the tract of land referenced in the trust agreement, Carter, along with Richard, leased trust property that they, farmed.

In November 2013, Rikka’s lawyer notified appellees of Rikka’s request to buy a one-and-a-half-acre tract along Highway 79 located just north of Garter’s one-and-a-half acres. Carter objected to selling Rik-ka -that particular tract because the area was used for parking farm equipment and provided access for commercial trucks to reach the granary silos on his property. Sherry -had initially agreed to sell Rikka the tract of land but soon after rescinded her consent to the sale after speaking with Carter, citing the land’s “current use in farming” as her' reason for rescission. Richard did not object to Rikka’s requést tó buy'the tract at issue.' Á méeting of the cotrustees was held in January 2014. Article Sixteen, section eight of the trust provides that

[w]hen more than two Trustees are acting, the concurrence and a joinder of a majority of my Trustees shall control in all matters pertaining to the administration of any trust created under this agreement.

Carter and Sherry voted against the sale,- while Rikka and Richard voted in favor of the sale, resulting in' a tie vote. Haying failed to achieve, .a majority of votes, Carter and | aSherry asked Rikka to select another tract of land to purchase, but Rikka refused.

Sherry, .as president of the Board of Trustees (Board), sent a letter to Rikka’s attorney in February 2014 informing him that the Board had voted against the sale of that particular tract following a thorough review of “the land’s history, current use in farming, and implications if removed, from farming operation.” Sherry also pointed out that the Board ha.d progressed to the business of managing a farm and that Rikka had never been actively involved in farming the land.

In April 2014, Rikka filed a complaint against the other cotrustees alleging that they had intentionally blocked the transfer of land because it would inconvenience Carter’s separate farming operations; that they had willfully and intentionally failed to carry out the terms of the trust in an attempt to deprive her of property to which she had the right to purchase as a beneficiary; and that they had breached the trust agreement by refusing to transfer the property.

. Carter and Sherry moved for summary judgment. Attached to their motion was Carter’s affidavit in which he attested that the one-and-a-half-acre tract of land Rikka had requested to purchase had been improved for use as a parking and staging area for farm equipment; the land had also been improved for, and served as, a pass-through for commercial trucks entering the granary; and the tract was directly adjacent to “the grain silos and storage sheds used in the Trust farming operations.” According to Carter, if that particular tract of land was sold to Rikka, a new site would have to be improved for parking the farm equipment, - and relocating the access road to the granary would necessitate taking 1¿other trust property currently devoted to growing rice and beans, causing a loss to the trust.

In response to the motion for summary judgment, Rikka contended that appellees, as cotrustees, had breached their duty of loyalty to hef as a beneficiary. She presented her own affidavit attesting that the latid she had requested to purchase was known as “the pasture”; that there had been no improvements to that land; that the trust did not engage in any “farming operations” except to lease land to Carter and Richard for their personal farming operations; and that the land Carter and Sherry offered to sell her, in lieu of purchasing the tract at issue, was inferior in that it was in an inconvenient location, was accessible only by a "gravel road shared with heavy equipment, overlooked junk cars, and was otherwise not worth $5,000 an acre.'

II. Trial Court’s Order

In granting summary judgment to Carter and Sherry, the trial court found that the trust did not provide that a beneficiary was entitled to purchase a tract of her choosing over the objections of the other cotrustees; that there was no provision in the trust as to what happened in the event of a tie vote; that appellees were correct in their reading of the trust; and that Rikka must select another tract of land that the majority of the trustees agree to sell to her.

III. Standard of Review

The appellate courts have repeatedly held that summary judgment is to be. granted by a trial court only when it is clear that there are no genuine issues of material fact, to be litigated, and the party is entitled to judgment as a matter of law. Cole v. Laws, 349 Ark. 177, 76 S.W.3d 878 (2002). Once the moving party has established a prima facie entitlement to summary judgment, the opposing party must meet proof with proof and’ demonstrate the existence of a material issue of fact. Id. On appellate review, we determine if summary judgment was- appropriate based on whether the evidentiary items presented by the moving party to support of its motion leave a material fact unanswered. Id. This court views the evidence to a light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Id. Our review is not limited to the pleadings, as we also focus on the affidavits and other documents filed by the parties. Id.

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Bluebook (online)
2016 Ark. App. 133, 485 S.W.3d 711, 2016 Ark. App. LEXIS 140, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pulliam-v-murphy-arkctapp-2016.