EDWARDS v. INVESTRUST
487 P.3d 837
| Okla. Civ. App. | 2021Background
- Patricia Bowers Edwards (beneficiary) filed to remove InvesTrust as trustee and appoint Jackson Hole Trust Company as successor; that appointment would change the trust's situs to Wyoming.
- The trust instrument expressly gives the beneficiary the right to remove a corporate trustee but is silent on authority to change the trust's situs; the remainder beneficiary is Oklahoma City Community Foundation (Oklahoma-based).
- InvesTrust twice advised that court approval of any change of situs was the prudent course and, after Edwards filed suit, sought a ruling that its litigation costs (including attorneys' fees) be paid from trust principal.
- Parties entered an Agreed Judgment appointing Jackson Hole and approving change of situs, but reserved for the court the question whether InvesTrust may charge its attorney fees to the trust.
- Edwards moved to deny payment of InvesTrust's fees from the trust, arguing the trustee's authority to employ counsel is limited to "administration of the trust estate" and that 60 O.S. §175.57(D) (judicial discretion in awarding fees) should govern and weigh against charging the trust.
- The trial court granted InvesTrust's counter motion for summary judgment, holding the trust instrument and 60 O.S. §175.24(A)(9) authorize the trustee to employ counsel and charge reasonable fees to the trust without prior court approval; Edwards appealed.
Issues
| Issue | Plaintiff's Argument (Edwards) | Defendant's Argument (InvesTrust) | Held |
|---|---|---|---|
| Whether the trustee may pay its litigation attorney fees from the trust under the trust instrument and 60 O.S. §175.24(A)(9) | Fees incurred defending or relating to a beneficiary's removal of the trustee are not "administration" expenses and thus should not be charged to the trust without court approval | Trust expressly authorizes the trustee to employ attorneys as it deems necessary; §175.24(A)(9) permits reasonable attorneys' fees necessary to administration, including litigation to preserve the trust | Court: Trust language and §175.24 permit InvesTrust to employ counsel and charge reasonable fees to the trust without advance court authorization |
| Whether 60 O.S. §175.57(D) (court may award fees in judicial proceedings involving a trust) controls and precludes charging fees to the trust here | §175.57(D) applies to any judicial proceeding involving a trust and, under its equitable factors, fees should not be charged to Edwards | §175.57(D) is part of the breach-of-trust statute and applies to breach claims against trustees, not this dispute over trustee removal and situs | Court: §175.57(D) does not apply to this non–breach-of-trust proceeding; §175.24 governs and fee authority should be strictly construed in favor of beneficiaries but supports the trustee here |
| Whether InvesTrust acted within its trustee powers by insisting on court approval for change of situs (thus incurring fees) | Beneficiary has an unambiguous right to remove the trustee; InvesTrust overreached by demanding court involvement | Trust is silent on situs change; given potential effects on administration, the trustee prudently sought court approval to protect the trust and beneficiaries | Court: InvesTrust acted within its administrative and protective powers to insist on court approval and to employ counsel to preserve the trust |
| Standard of review and procedural posture (appeal from summary judgment) | Edwards disputed that appeal was from summary judgment | InvesTrust moved to compel compliance with accelerated summary-judgment appeal rules | Oklahoma Supreme Court required compliance; appellate review is de novo for summary judgment and statutory construction |
Key Cases Cited
- Carmichael v. Beller, 914 P.2d 1051 (Okla. 1996) (summary judgment and legal questions reviewed de novo)
- Atwood v. Atwood, 25 P.3d 936 (Okla. Civ. App. 2001) (authority for trustee fees and expenses must be strictly construed)
- Act South, LLC v. Reco Elec. Co., 299 P.3d 505 (Okla. Civ. App. 2013) (award of attorney fees is a legal question reviewed 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)
- Robinson v. Kirbie, 793 P.2d 315 (Okla. Civ. App. 1990) (trustee discretion is broad but not without limits)
- Bankers Trust Co. v. Hudson, 245 N.E.2d 405 (N.Y. 1969) (change of situs requires showing of benefit absent express or implied power)
- In re Hudson's Trust, 29 A.D.2d 145 (N.Y. App. Div. 1968) (beneficiary's remove-and-replace power cannot be used to change situs contrary to settlor intent)