Suit for instructions construing trust terms and settlor’s intent does not bar later claim to modify trust terms.
B.B. Weatherby established a testamentary trust for the benefit of his daughter, Reed, and her four children. The trust terms limited discretionary distributions to Reed to only half of the trust income and principal, and could only be made by the corporate trustee as necessary for Reed’s health, happiness, maintenance, welfare, or comfort. Reed initially served as co-trustee with Bank One Trust Company.
In 1998, Reed petitioned the court to seek guidance on the payment of certain expenses from the trust and the court authorized the payments out of trust principal. The court also concluded that Reed was entitled to payments of principal until the trust principal was reduced to one-half.
In 2007, Reed, joined by three of her four children, filed an action for an emergency modification of the trust’s terms to authorize J.P. Morgan Chase Bank, the successor in interest to Bank One Trust Company, to pay Reed’s expenses from the remaining one-half of the trust principal on the grounds that Reed was mentally and physically disabled and the settlor would have wanted Reed to have the funds. J.P. Morgan Chase and Reed’s fourth child, Hollon, opposed the modification on the basis that the court’s 1998 decision established the settlor’s intent as to principal payments and the petition for modification was barred by the doctrines of res judicata and collateral estoppel.
The trial court held that the claims were barred by the court’s 1998 decision, and Reed appealed. On appeal, the Oklahoma Supreme Court reversed the trial court and remanded the case on the grounds that: (1) although the subject matter, parties, and capacities of the parties remained the same between the two actions, the causes of action in 1998 and 2007 differed; (2) the 1998 action was a request for court instructions to make payments of certain expenses that were expressly provided for in the trust agreement; and (3) the prior action did not involve a request for modification and there was no medical emergency present at that time.