Corrado v. Life Investors Insurance Co., No. 16-3949 (8th Cir. 2018)
Annotate this CaseFCR filed suit against numerous defendants associated with the Life Investors Owners Participation Trust, alleging breaches of fiduciary duties and conversion. The Eighth Circuit affirmed the district court's grant of summary judgment to defendants, holding that Trust section 11.9 authorized the Trustees to deduct funds from the Trust accounts to reimburse Life Investors for the money it advanced to pay for the defense in the Maryland litigation; the Trustees did indeed incur "cost" in the form of attorney's fees in defending the Maryland action unsuccessfully brought by Corrado and FCR; the Trustees did not breach their fiduciary duties; there was no material dispute as to the reasonableness of the attorney's fees because plaintiffs failed to challenge the fees; and the conversion claim failed because plaintiffs were unable to prove the first element of conversion, that their interests were subject to the terms of the Trust.
Court Description: Shepherd, Author, with Wollman and Beam, Circuit Judges] Civil case. For the court's prior opinions in this suit over management of a trust, see Life Inv'rs Ins. Co. of Am. v. Fed. City Region, Inc., 687 F.3d 1117 (8th Cir. 2012) and Life Inv'rs Ins. Co. of Am. v. Corrado, 804 F.3d 908 (8th Cir. 2015). In this action, plaintiffs challenged the trust's decision to enforce a provision of the trust agreement and deduct the costs of defense of certain Maryland litigation from the plaintiffs' Trust accounts as breaches of fiduciary duty and conversion. The district court did not err in determining the trust provision applied and permitted the trustees to charge the legal fees to the accounts of participants; nor did the court err in finding the trustees incurred reimbursable costs in connection with the litigation; no other provision of the trust prevented the recovery; claims of breach of fiduciary duty rejected; there was no material dispute as to the reasonableness of the attorneys' fees associated with defense of the litigation; claim for conversion rejected.
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