IN RE: HARRIER TRUST Vs.
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STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT 18-324 IN RE: HARRIER TRUST ********** SAVOIE, J. dissents. I respectfully dissent from the majority’s opinion. First, the trial court’s partial summary judgment declaring the validity of Mrs. Marshall’s appointments of Dr. Wayne S. Thompson, Jr., Judge Lilynn Cutrer, and Dr. Karen Aucoin as cotrustees of the Harrier Trust is in error because none of these individuals are parties in this action. Louisiana Code of Civil Procedure article 1880 requires states that “[w]hen declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration[.]” Moreover, there is no indication that the movers/appellees herein, Mr. Johnson or Pastor Alexander, have any authority to seek relief on behalf of Dr. Thompson, Judge Cutrer, or Dr. Aucoin. I further note that Ms. Marshall initially joined in the motion for summary judgment seeking the validity of her co-trustee appointments, but she was later permitted to withdraw as a mover of the motion, presumably because of rulings rendered in concurrent probate court proceedings in Texas.1 I would also find that the co-trustee compensation package, regardless of its validity, creates a genuine issue of material fact as to whether the co-trustees appointed by Mrs. Marshall were in fact “disinterested” as required by the Trust In July 2017, a probate court in Harris County, Texas rendered a temporary injunction against Mrs. Marshall that, inter alia, enjoined her from making any additional payments to her appointed co-trustees of the Harrier Trust, from taking any further action to approve or ratify the appointments of the co-trustees, and from taking any action in conjunction with the co-trustees regarding the Harrier Trust. The September 17, 2017 court minutes in the instant case show that Mrs. Marshall withdrew as a mover of the subject motion that sought summary judgment concerning the validity of her co-trustee appointments. 1 documents. Compensation is provided to the co-trustees based upon a formula that takes into consideration the value of the Trust’s assets, the value of the Trust’s interests in other entities, and the value of gross Trust receipts. Whether this compensation package provides the co-trustees with an interest in the Trust’s assets that would disqualify them as “disinterested” persons under the Trust documents is a factual question that is improper for summary judgment determination. In addition, fact issues concerning whether Mrs. Marshall’s appointments of the five co-trustees constitute an abuse of her discretion preclude a summary judgment finding that the appointments were valid. While the Trust documents provide Mrs. Marshall with the “sole discretion to determine the manner, time, circumstances and conditions of the exercise of any right, power or authority vested in” her, that discretion is not unfettered. Louisiana Revised Statutes 9:2115 provides that “[i]f discretion is conferred upon a trustee with respect to the exercise of a power, its exercise shall not be subject to control by the court, except to prevent an abuse of discretion.” Therefore, any abuse of discretion on the part of Mrs. Marshall in connection with her co-trustee appointments could result in a finding that the appointments were invalid. There is evidence in the record concerning the excessive nature of the compensation package that Mrs. Marshall provided to the co-trustees.2 The record contains an affidavit of a Certified Public Accountant that reflects the projected collective co-trustee fees for the Harrier Trust over a 28-year period, using different scenarios, and discounted to present value, as ranging between $90,232,172 and $282,484,032. In addition, there is evidence suggesting that the compensation package is “beyond any measure of being competitive with the market, and bears no relationship between the amount of the anticipated time or work that would conceivably be expended by these alleged trustees for the compensation to be received[,]” and is not in the beneficiary’s best interest. 2 I further note that on November 7, 2017, the Texas probate court rendered an order granting temporary injunctive relief that, inter alia, enjoined the co-trustees of the Harrier Trust from receiving compensation in accordance with the December 2016 appointment documents, taking any action that could affect the Harrier Trust, “attempting to circumvent this [c]ourt’s jurisdiction over the Harrier . . . Trust by . . . seeking validation of the compensation provisions set out in the December 2016 Appointment Documents[,]”and from assisting Mrs. Marshall in any litigation 2 While the validity of the compensation package is not before this court, the compensation package that Mrs. Marshall chose to provide to the co-trustees could be considered by a fact finder as relevant evidence of her intent, motive, and judgment underlying her decision to appoint the co-trustees, and whether she abused her discretion in appointing them. Therefore, summary judgment concerning the validity of the co-trustee appointments is precluded for this reason as well. For the reasons stated above, I would reverse the partial summary judgment rendered in this case. against Preston concerning the Harrier Trust. Also on November 7, 2017, the probate court granted Preston’s motion for summary judgment in part, finding that the compensation package violated the terms of the Harrier Trust document. 3
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