HARRIET C SIBLEY TRUST
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STATE OF MICHIGAN
COURT OF APPEALS
In the Matter of the HARRIET C. SIBLEY TRUST.
J. WHITNEY SIBLEY, III,
UNPUBLISHED
November 9, 2010
Appellant,
v
CITIZENS BANK WEALTH MANAGEMENT,
N.A,
No. 293601
Genesee Probate Court
LC No. 09-002469-TT
Appellee.
Before: BECKERING, P.J., and JANSEN and TALBOT, JJ.
PER CURIAM.
J. Whitney Sibley, III (Whitney), as the beneficiary of the Harriet C. Sibley Trust,
challenges the probate court’s denial of his request for the removal of the current trustee,
Citizens Bank Wealth Management, N.A. (Citizens Bank). We affirm.
Questions of statutory interpretation are reviewed de novo.1 We review the findings of
fact by a probate court for clear error,2 and the decision to remove a trustee for an abuse of
discretion.3
Harriet C. Sibley executed her last will and testament on June 29, 1962, which included
two testamentary trusts, one of which is the subject of this action - the Harriet C. Sibley Trust.
Citizens Bank was the named as the trustee. The Trust became irrevocable on Harriet’s death in
1975. Harriet’s husband James Sibley was the initial trust beneficiary. James was entitled to
1
Tousey v Brennan, 275 Mich App 535, 538; 739 NW2d 128 (2007).
2
MCR 2.613(C); Gumma v D & T Construction Co, 235 Mich App 210, 221; 597 NW2d 207
(1999).
3
In re Duane v Baldwin Trust, 274 Mich App 387, 396-397; 733 NW2d 419 (2007).
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regular installments of the net income of the trust until his death in 2000. Following the death of
James Sibley, Whitney became the trust beneficiary and was to receive net income from the
Trust in regular installments. Based on the discretion of the trustee, and in accordance with the
terms contained in Harriet’s will:
If the payments . . . are not . . . sufficient to properly educate, support and
maintain and care for my son, Whit[ney], then I direct the trustee to use such part
of the principal of [the] Trust . . . as may be required to do so.
Any Trust principal remaining after Whitney’s death is to be distributed in equal shares to his
children, resulting in the termination of the Trust. Since 1970, Whitney has resided in the state
of Colorado, as do his children.
In 2009, Whitney sought the voluntary resignation of Citizens Bank as the trustee to
procure the appointment of an alternative trustee in Colorado. Citizens Bank refused and
Whitney filed litigation on April 14, 2009, seeking removal of the trustee and the appointment of
a successor. In support of his petition, Whitney alleged that his geographic distance from the
trustee was not in his best interest and interfered in the development of a personal relationship
with the trustee. Whitney further asserted that the trustee failed to adequately exercise its
discretion to use principal from the Trust for his support and maintenance and that the only basis
for Citizen Bank’s refusal to relinquish its status as trustee was the loss of fees associated with
the management of the Trust. The probate court denied Whitney’s request to remove Citizens
Bank as trustee based on its inability to find “the place of administration is inappropriate at this
time.” While considering Whitney’s preferences as the beneficiary, the probate court found no
wrong doing on the part of the trustee or that any inconvenience due to geographic distance
necessitated the removal. The trial court also denied Whitney’s motion for reconsideration on
July 24, 2009.4
When this matter was before the probate court, the relevant statutory provision provided:
A trustee is under a continuing duty to administer the trust at a place
appropriate to the purposes of the trust and to its sound, efficient management. If
the principal place of administration becomes inappropriate for any reason, the
court may enter an order furthering efficient administration and the interests of
beneficiaries, including, if appropriate, release of registration, removal of the
trustee, and appointment of a trustee in another state. A trust provision relating to
the place of administration, to changes in the place of administration, or to change
of trustee controls unless compliance would be contrary to efficient administration
or the purposes of the trust. The view of an adult beneficiary shall be given
4
Whitney filed his claim of appeal on August 14, 2009.
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weight in determining the suitability of the trustee and the place of
administration.5
After the probate court rendered its decision and Whitney appealed to this Court, our Legislature
enacted the Michigan trust code.6 The Michigan trust code currently provides for the removal of
a trustee as follows:
(1) The settlor, a cotrustee, or a qualified trust beneficiary may request the
court to remove a trustee, or a trustee may be removed by the court on its own
initiative.
(2) The court may remove a trustee if 1 or more of the following occur:
(a) The trustee commits a serious breach of trust.
(b) Lack of cooperation among cotrustees substantially impairs the
administration of the trust.
(c) Because of unfitness, unwillingness, or persistent failure of the trustee
to administer the trust effectively, the court determines that removal of the trustee
best serves the purposes of the trust.
(d) There has been a substantial change of circumstances, the court finds
that removal of the trustee best serves the interests of the trust beneficiaries and is
not inconsistent with a material purpose of the trust, and a suitable cotrustee or
successor trustee is available.
(3) Pending a final decision on a request to remove a trustee, or in lieu of
or in addition to removing a trustee, to the extent it is not inconsistent with a
material purpose of the trust, the court may order any appropriate relief under
section 7901(2) that is necessary to protect the trust property or the interests of the
trust beneficiaries.
The new statutory provisions are applied to trusts, defined as including, “but . . . not
limited to, an express trust, private or charitable, with additions to the trust, wherever and
however created.”7 In accordance with the Michigan trust code:
5
MCL 700.7305, amended 2009 PA 46, effective April 1, 2010. The current version of MCL
700.7305 pertains to guardian ad litems.
6
MCL 700.7101, et seq.; 2009 PA 46, effective April 1, 2010.
7
MCL 700.7102 citing MCL 700.1107(n).
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(1) Except as otherwise provided in article VII, all of the following apply
on the effective date of the amendatory act that added this section:
(a) The amendments and additions to article VII enacted by the
amendatory act that added this section apply to all trusts created before, on, or
after that effective date.
(b) The amendments and additions to article VII enacted by the
amendatory act that added this section apply to all judicial proceedings
concerning trusts commenced on or after that effective date.
(c) The amendments and additions to article VII enacted by the
amendatory act that added this section apply to judicial proceedings concerning
trusts commenced before that effective date unless the court finds that application
of a particular provision of the amendments and additions would substantially
interfere with the effective conduct of the judicial proceedings or prejudice the
rights of the parties, in which case the particular provision of the amendments and
additions does not apply and the superseded provisions apply.
(d) Any rule of construction or presumption provided in the amendments
and additions to article VII enacted by the amendatory act that added this section
applies to trust instruments executed before that effective date unless there is a
clear indication of a contrary intent in the terms of the trust.8
A “proceeding” is statutorily defined to include “an application and a petition, and may be an
action at law or a suit in equity.”9 A “petition” refers to “a written request to the court for an
order after notice.”10 In turn, the word “court” is defined to mean “the probate court or, when
applicable, the family division of circuit court.”11 In accordance with the statutory directive12
and because proceedings in the probate court and the appeal to this Court were commenced
before the effective date of the amendments of April 1, 2010, in considering this issue we will
apply the former statutory language13 as addressed in the lower court’s ruling.
In regard to this case, the relevant statutory language pertaining to a request to remove a
trustee is as follows:
8
MCL 700.8206.
9
MCL 700.1106(r). An “application” refers to “a written request to the probate register for an
order of informal probate or informal appointment. . . .” MCL 700.1103(b).
10
MCL 700.1106(p).
11
MCL 700.1103(j).
12
MCL 700.8206(1)(b).
13
MCL 700.7305.
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A trustee is under a continuing duty to administer the trust at a place
appropriate to the purposes of the trust and to its sound, efficient management. If
the principal place of administration becomes inappropriate for any reason, the
court may enter an order furthering efficient administration and the interests of
beneficiaries, including, if appropriate, release of registration, removal of the
trustee, and appointment of a trustee in another state. A trust provision relating
to the place of administration, to changes in the place of administration, or to
change of trustee controls unless compliance would be contrary to efficient
administration or the purposes of the trust. The view of an adult beneficiary shall
be given weight in determining the suitability of the trustee and the place of
administration.14
Notably, Whitney has not asserted any mismanagement or breach of fiduciary duty by Citizens
Bank in administration of the Trust. He has not indicated any difficulty or delay in having
contact with Citizens Bank or a lack of responsiveness to his contacts or inquiries as the basis for
his request for removal of the current trustee.15 In effect, Whitney only asserts that the
geographic location of the trustee is inconvenient and preclusive to a more personal relationship,
but not that it has impacted the efficient administration of the Trust.
At issue is the statutory language that permits the continuation of the administration of a
trust “at a place appropriate to the purposes of the trust” as, in this instance, there is no assertion
that Citizens Bank has failed to provide “sound” and “efficient management.” 16 Use of the word
“and” indicates that both conditions are required for a trustee to retain his or her status and that
the failure of either condition, such as when “the principal place of administration becomes
inappropriate,” gives a court the discretion, but not a mandate, to remove a trustee.17 The basis
for a place of administration to be deemed inappropriate is not restrictive as it encompasses “any
reason.” For something to be deemed “inappropriate” it must be regarded as “not proper or
suitable.”18 In making a determination regarding the “suitability” of the “trustee and the place of
administration,” a court is directed to give “weight” to the views of an “adult beneficiary.”
Historically, case law has also recognized that the identification or naming of a specific trustee
14
MCL 700.7305 (emphasis added).
15
Although Whitney has implied a dispute with the trustee regarding the failure to release Trust
principal on his behalf, Citizens Bank contends that it is guided by the wording of the Trust and
that Whitney has failed to provide documentation to support his need to invade the Trust
principal.
16
Id.
17
Id.
18
Random House Webster’s College Dictionary (1997).
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by a testator comprises a strong basis for not removing a trustee for a trivial concern unrelated to
a demonstration of actual fault or neglect by the trustee.19
When the trust was initially effectuated and while the primary beneficiary, James Sibley,
resided in Michigan there was no suggestion that the place of administration was
“inappropriate.” Notably, even though Whitney became the beneficiary in 2000 and had been
residing in Colorado since 1970, he did not indicate any concerns regarding the propriety of the
location of the trust or its management until 2009. Whitney’s own assertions do not indicate
that the location of the Trust’s administration is “inappropriate,” merely not consistent with his
personal preference. Whitney has not alleged that the current arrangement has resulted in any
actual inconvenience such as delays in his receipt of payments of net income or problems in
contacting Citizens Bank and their responsiveness.20 Rather, he merely indicates a personal
preference to relocate the trust administration to within a closer geographic distance in order to
potentially develop a more personal relationship with a successor trustee.21
The decision whether to remove Citizens Bank as the current trustee was within the
discretion of the trial court. “An abuse of discretion occurs when the trial court's decision is
outside the range of reasonable and principled outcomes.”22 This comprises a high standard of
review. Because the allegations of Whitney demonstrated a mere preference and not that the
location for administration of the Trust was “inappropriate” we cannot find that the probate
court’s decision to deny removal of the current trustee was an abuse of discretion.
Affirmed.
/s/ Jane M. Beckering
/s/ Kathleen Jansen
/s/ Michael J. Talbot
19
Reed v Newberry, 292 Mich 476, 483; 290 NW 874 (1940).
20
In support of his position, Whitney cites to an unpublished opinion of this Court – In re Wege
Trust, unpublished opinion per curiam of the Court of Appeals, issued June 17, 2008 (Docket
Nos. 271244, 274217, 274256, 274850, and 281244). First we note that unpublished opinions do
not have precedential value. MCR 7.215(C)(1). Second, the cited case is factually
distinguishable as the beneficiary in Wege sought removal of the trustee based on both
geographic location or convenience and concerns pertaining to management of the trust and the
propriety of the investments being made.
21
We note that any preference indicated by Whitney’s children as residuary beneficiaries is
irrelevant given their inchoate interest and the fact that, should they become beneficiaries the
assets will be disbursed and the Trust will terminate eliminating the necessity of any transfer of
responsibility to an alternative or successor trustee.
22
Smith v Khouri, 481 Mich 519, 526; 751 NW2d 472 (2008).
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