Robert T. McLean Irrevocable Trust U/A/D March 31, 1999 ex rel. McLean v. Ponder

418 S.W.3d 482, 2013 WL 5761058, 2013 Mo. App. LEXIS 1258
CourtMissouri Court of Appeals
DecidedOctober 24, 2013
DocketNo. SD 31767
StatusPublished
Cited by12 cases

This text of 418 S.W.3d 482 (Robert T. McLean Irrevocable Trust U/A/D March 31, 1999 ex rel. McLean v. Ponder) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Robert T. McLean Irrevocable Trust U/A/D March 31, 1999 ex rel. McLean v. Ponder, 418 S.W.3d 482, 2013 WL 5761058, 2013 Mo. App. LEXIS 1258 (Mo. Ct. App. 2013).

Opinion

WILLIAM W. FRANCIS, JR., C.J.

The Robert T. McLean Irrevocable Trust U/A/D March 81, 1999, by Linda McLean, as Trustee (“the Trust”), appeals from the “Judgment” sustaining J. Michael Ponder’s (“Ponder”) “Motion ... for Directed Verdict at the Close of Plaintiffs Evidence” and granting judgment in favor of Ponder. The Trust asserts eleven points of trial court error. We affirm the Judgment of the trial court.

Factual1 and Procedural Background2

Robert McLean (“Robert”)3 was involved in an automobile accident in 1996 that left him a quadriplegic. Robert originally hired attorney Patrick Davis to represent him in a product liability suit arising out of the accident. Davis then referred Robert to Ponder, who successfully prosecuted the suit for Robert by settling the case for a large sum of money. The net settlement proceeds were placed in the Trust. Due to significant medical expenses paid by Medicaid and the need to continue Robert’s eligibility for all available government assistance, the Trust contained “Supplemental Needs Provisions” under “Article II” of the Trust. Lettie May Brewer, Robert’s grandmother, was named as “Trustor”; Merrill Lynch Trust Company, FSB and David Potashnick, were named as “Trustee[s]”; and Ponder was named as “Trust Protector.” The Trust provided for three specific powers for the Trust Protector in subparagraphs 5.4.1, 5.4.2, and 5.4.3. The Trust Protector could: (1) remove a Trustee; (2) appoint a Successor Trustee; and (3) resign as Trust Protector.

Section 5.4 of the Trust described the role and duties of the “Trust Protector” as follows:

5.4 Trust Protector. The “Trust Protector” of such trust shall be [Ponder]. The Trust Protector’s authority hereunder is conferred in a fiduciary capacity and shall be so exercised, but the Trust Protector shall not be liable for any action taken in good faith.
5.4.1 Removal of Trustee. The Trust Protector shall have the right to remove any Trustee of the trust under this Agreement. If the Trust Protector removes a Trustee, any successor Trustee appointed by the removed Trustee shall not take office. The Trust Protector may, by written instrument, release the Trust Protector’s power to remove a particular Trustee and such release may be limited to the releasing Trust Protector or made binding upon any successor Trust Protector.
5.4.2 Appointment of Successor Trustee. The Trust Protector shall also have the right to appoint an individual or corporation with fiduciary powers to replace the removed Trustee or whenever the office of Trustee of a trust becomes vacant.
5.4.3 Resignation of Trust Protector; Successor. Any person serving as [485]*485Trust Protector may resign. The Trust Protector may appoint one or more persons to be successor Trust Protector to take office upon the death, resignation, or incapacity of the Trust Protector or any person serving as protector. The Trust Protector may be one or more persons, whether individuals or corporations. If more than one person is serving as Trust Protector, they shall act by majority.

(Bold in original).

The Trust did not provide Ponder with any powers or duties to supervise the Trustees or to direct their activities, but did outline the rights, duties, directives, and powers of the Trustees.

In May 1999, when the original Trustees resigned, Ponder exercised his power under the Trust and appointed Patrick Davis and his law firm, Patrick Davis, P.C. (collectively “Davis”), and Daniel Rau, as Successor Trustees. The Successor Trustees had referred legal clients to Ponder over the years and those referrals netted Ponder fees, a portion of which were then shared with Davis and his firm.

In July 2001, Davis resigned as a Successor Trustee. At that same time, Ponder resigned as Trust Protector, but not before appointing Tim Gilmore (“Gilmore”) as Successor Trust Protector and Brian Menz (“Menz”) to take Davis’s place as a Successor Trustee.

In July 2002, Menz resigned as a Successor Trustee, and Linda McLean (“Linda”), Robert’s Mother, was appointed as Successor Trustee.

In 2001, Robert was determined to be incompetent by the Circuit Court of Scott County, and Linda and Paul McLean were appointed Robert’s guardians.

In August 2004, the Trust brought suit against all persons who had served either as a Successor Trustee or as Trust Protector under the Trust, including Ponder. The Trust’s “First Amended Petition” was filed on April 6, 2005. The petition alleged Ponder had breached his fiduciary duties to Robert and acted in “bad faith” in one or more of the following respects: (1) failed to monitor and report expenditures; (2) failed to stop Trustees when they were acting against the interests of Robert; and (3) placing his loyalty to the Trustees and their interests above those of Robert. The petition also claimed that in the summer of 2000, Robert and his attorney informed Ponder that the Successor Trustees were inappropriately spending Trust funds. While Ponder’s firm was a named defendant in the petition, its registered agent was never served, no mention of the firm was made anywhere in the petition, and no relief was requested against the firm.

On May 10, 2005, Ponder filed a “Motion to Dismiss or, in the Alternative, for Summary Judgment.” Attached to that motion were copies of the Trust, a memorandum in support of the motion, and a statement of uncontroverted facts with accompanying affidavit.

On July 27, 2005, the trial court sustained Ponder’s Motion to Dismiss or, in the Alternative, for Summary Judgment.4 The trial court’s order also struck Ponder’s law firm from the caption. The claims against the other defendants were ultimately settled and a “Judgment of Dismissal” was entered by the trial court on January 25, 2007.5 Several months later, [486]*486the Trust requested leave to file an appeal out of time, which was granted by this Court on July 25, 2007. The “Notice of Appeal” listed “Linda McLean, as Trustee of Robert T. McLean Irrevocable Trust U/A/D March 31, 1999” as “Plaintiff/Petitioner,” and no other appellants were listed.

The matter proceeded on appeal with the Trust as the only appellant. The function and duties of a “Trust Protector” was a question of first impression before this Court in Robert McLean Irrevocable Trust v. Patrick Davis, P.C., 283 S.W.3d 786 (Mo.App. S.D.2009), on appeal.6 This Court issued its opinion finding that the Trust stated a claim for breach of fiduciary duty and that a genuine issue of material fact existed as to whether Ponder breached a fiduciary duty.7 Id. at 794-95. This Court remanded the case to the trial court to determine the duties owed by Ponder as Trust Protector and to whom he owed those duties.8 Id. at 795. Specifically, this Court ordered the cause “remanded for further proceedings consistent with [the] opinion.” Id.

Following remand, the Trust sought leave to amend the petition. The trial court denied this request on August 6, 2009. The Trust then filed a “Writ of Prohibition and/or Mandamus” in this Court seeking to overrule the trial court’s denial of leave to amend.

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418 S.W.3d 482, 2013 WL 5761058, 2013 Mo. App. LEXIS 1258, Counsel Stack Legal Research, https://law.counselstack.com/opinion/robert-t-mclean-irrevocable-trust-uad-march-31-1999-ex-rel-mclean-v-moctapp-2013.