In the most recent installment of the McGuireWoods Fiduciary Advisory Services annual multipart series on recent fiduciary cases, developments in the law concerning various topics are examined through the following:

  • Raths v. First Interstate Bank, No. DA 15-0547 (May 31, 2016) Beneficiary precluded from filing suit for breach of fiduciary duty where he signed a Receipt of Distribution Agreement acknowledging that he had no objections to management of the trust and releasing the trustee from all claims.
  • Woodward v. Woodward, 192 So. 3d 528 (Fla. Ct. App. 4th Dist. May 4, 2016) Beneficiary’s 2012 suit for breach of fiduciary duty against a trustee was not barred by the 2003 dismissal of the beneficiary’s 1996 suit against the same trustee because the facts and events were different, involved different periods of time, and the final trust accounting was not provided until 2011.
  • First State Fiduciaries LLC v. Morgan Stanley Smith Barney LLC, C.A. No. 9472-MA (July 11, 2016) Putative trustee denied award of attorneys’ fees because the trust was found to be void ab initio.
  • Heathman v. Lizer, 2016 WL 3753328 (Cal. Ct. App. July 8, 2016) Beneficiary’s petition to modify trustee compensation provision did not trigger no-contest clause.
  • Matter of Kermit Gitenstein Foundation, 357003A, NYLJ 1202758893277 (Surr., NA, May 26, 2016)
  • Garrett v. First State Bank Central Texas, No. 10-14-00344-CV (Tx. Ct. App. May 5, 2016) Court refused to find the existence of fiduciary duty in an arm’s-length banking transaction absent a prior business and personal relationship between the parties.
  • In re Wilma G. James Trust, 487 S.W.3d 37 (Mo. Ct. App. May 3, 2016) Despite the trustee’s alleged breaches of fiduciary duty, the lack of any evidence proving actual harm to the beneficiaries led the court to reject the beneficiaries’ claims.
  • Gadaire v. Orchin, 133 F. Supp. 3d 138 (D.C. Dist. Ct., Sept. 30, 2015) In a suit against the trustee for breach of fiduciary duty, the court denies the beneficiary’s motion for summary judgment on grounds that the trustee failed to pay insurance policy premiums and caused the insurance policy to lapse.
  • In re Marvin M. Schwan Charitable Foundation, 880 N.W.2d 99 (S.D. May 18, 2016) Individual members of a trust succession committee are not “fiduciaries” under applicable South Dakota law and lack standing to petition a court for supervision of the trust. However, these individual members of the committee are “interested in the trust” and thus are “beneficiaries” who have standing under South Dakota law to petition a court for supervision of the trust.
  • LVAR, L.P. v. Bermuda Commercial Bank Ltd., et al. 2016 WL 2865612 (2d Cir. May 17, 2016) Forum selection clause governed and required claims to be litigated in Bermuda in suit against trustee and investment adviser for mismanagement of funds
  • Alioto v. Manalo, 2016 WL 3610878 (Cal. Ct. App. June 28, 2016) California court admits as evidence grantor’s statements to drafting attorney to resolve ambiguity in terms of subtrust.
  • Shriners Hospital for Children v. First Northern Bank, 373 P. 392 (Wyo. May 18, 2016) Wyoming court holds that rule against perpetuities does not apply to trust where interest is fully vested upon the death of the grantors.
  • In re Sinzheimer, 2016 WL 1598764 (N.Y. Sur. April 14, 2016) Court denies jury trial for action seeking construction of a trust instrument and delivery of trust assets.
  • Simon v. Sheedy (In re Sheedy) 2015 WI App 52 (Wis. Ct. App. May 28, 2015) Court construes competing trust agreements to determine that later trust revoked the first and that the subsequent amendments were valid.
  • Kilmer v. Sposito, --- A.3d ---- (2016), 2016 Pa. Super. 141 (July 1, 2016) Attorney who negligently advised surviving spouse to take a one-third elective share when she was entitled to a one-half share can be sued for malpractice.
  • Franklin Templeton Bank & Trust v. Butler, 2016 WL 3129141 (D. Utah June 2, 2016) Arbitration agreements do not require arbitration of a directed trustee’s claim for indemnification by the beneficiaries, when beneficiaries sue the directed trustee and investment adviser.
  • In re Estate of Thomas F. Shelton, 2016 IL App (3d) 140163 (Ill. App. Ct., Aug. 1, 2016) Case of first impression in Illinois; appellate court held that, in general, a successor agent designated in a power of attorney does not owe fiduciary duties to the principal simply by virtue of being designated as successor agent.