EDWARDS v. INVESTRUST
487 P.3d 837
| Okla. Civ. App. | 2021Background
- Patricia Bowers Edwards sought removal of InvesTrust as trustee and appointment of Jackson Hole Trust Co.; the Trust expressly gives the primary beneficiary the power to remove a corporate trustee with 30 days' notice and to appoint a successor meeting specified corporate requirements.
- Appointment of Jackson Hole would change the trust's situs to Wyoming; the Trust is otherwise silent on change of situs and names an Oklahoma remainder beneficiary.
- InvesTrust twice advised Edwards' counsel that court approval of any change of situs was the prudent course and then opposed an unapproved situs change; counsel filed suit to remove InvesTrust and appoint Jackson Hole.
- The parties entered an Agreed Judgment approving InvesTrust's resignation, appointing Jackson Hole, and approving change of situs to Wyoming, but reserved the question whether InvesTrust may pay its litigation attorney fees from trust principal.
- Edwards moved to deny payment of InvesTrust's attorney fees from the trust, arguing trustee fee authority under 60 O.S. § 175.24(A)(9) is limited to administration and that 60 O.S. § 175.57(D) (judicial proceedings involving trusts) should govern and weigh against charging the trust.
- The trial court granted InvesTrust's summary judgment, holding the trust instrument and 60 O.S. § 175.24(A)(9) authorize the trustee to employ counsel and pay fees from the trust; Edwards appealed and the Court of Civil Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trustee may employ counsel and pay litigation fees from trust principal without prior court approval | Edwards: trustee may only employ attorneys "reasonably necessary in administration" and these removal proceedings are not trust administration; §175.57(D) governs and equity does not require charging the trust | InvesTrust: trust instrument authorizes hiring attorneys "as the Trustee may deem necessary or desirable" and §175.24(A)(9) authorizes such expenditures to preserve/administer the trust | Held: Trustee authorized by trust terms and §175.24(A)(9) to employ counsel and charge fees to the trust; summary judgment for InvesTrust affirmed |
| Whether 60 O.S. § 175.57(D) applies to bar charging the trust for fees in this case | Edwards: §175.57(D) allows court discretion and factors weigh against charging the trust | InvesTrust: §175.57(D) addresses breach-of-trust proceedings and is inapplicable here | Held: §175.57(D) construed as relating to breach-of-trust proceedings and does not apply to this litigation; trustee fee authority remains under §175.24(A) |
| Whether InvesTrust acted within its trustee powers by insisting on court approval of change of situs | Edwards: beneficiary has express remove-and-replace power and need not obtain court approval for removal | InvesTrust: insisting on court approval was a prudent act to protect and preserve trust interests given situs change implications | Held: Court concluded InvesTrust acted within its broad administrative powers to protect the trust by seeking court approval of change of situs |
Key Cases Cited
- Carmichael v. Beller, 914 P.2d 1051 (Okla. 1996) (summary-judgment standard is de novo)
- Matter of Home-Stake Prod. Co. Deferred Comp. Tr., 598 P.2d 1193 (Okla. 1979) (interpretation of trust instrument is a question of law)
- Atwood v. Atwood, 25 P.3d 936 (Okla. Civ. App. 2001) (authority for fees and expenses must be strictly construed; §175.57 context concerns trustee breaches)
- Act South, LLC v. Reco Elec. Co., 299 P.3d 505 (Okla. Civ. App. 2013) (whether party is entitled to attorney fees is a question of law)