EDWARDS v. INVESTRUST
487 P.3d 837
Okla. Civ. App.2021Background
- Patricia Bowers Edwards filed to remove InvesTrust as corporate trustee and appoint Jackson Hole Trust Company (located in Wyoming) under a trust provision that gives the primary beneficiary the power to remove and replace a corporate trustee.
- The Trust expressly grants the trustee authority to employ attorneys and to charge agents’ compensation to principal or income; the Trust is silent about changing situs.
- InvesTrust resisted a unilateral nonjudicial change of situs and twice advised Edwards’ counsel that court approval of the change of situs to Wyoming was the prudent course; Edwards then sued to remove InvesTrust.
- The parties entered an Agreed Judgment: InvesTrust would resign, Jackson Hole would succeed, and the court approved the change of situs to Wyoming, but left unresolved whether InvesTrust could charge its attorney fees for the litigation to the Trust principal.
- Edwards moved to deny payment of InvesTrust’s attorney fees from the Trust, arguing the authority to employ attorneys is limited to trust administration and that 60 O.S. § 175.57(D) (judicial proceedings) should govern and not permit charging her for fees; InvesTrust countered that the Trust and 60 O.S. § 175.24(A)(9) authorize payment of reasonable fees without prior court approval.
- The trial court granted InvesTrust’s counter motion for summary judgment, holding the Trust instrument and § 175.24 authorize payment of attorney fees from the Trust; Edwards appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether InvesTrust may pay litigation attorney fees from trust principal without prior court authorization. | Edwards: Fees incurred in this removal action are not "administration of the trust" under §175.24(A)(9) or the Trust; §175.57(D) governs judicial proceedings and equity does not require fees be charged to her. | InvesTrust: Trust expressly authorizes employing attorneys; §175.24(A)(9) permits employing counsel reasonably necessary for administration or preservation of the trust; litigation was necessary to protect trust interests. | Court: Held for InvesTrust — Trust language and §175.24 permit payment of reasonable attorney fees from the trust without advance court authorization; §175.57(D) is inapplicable here. |
| Whether the trustee acted within its powers by insisting on court approval of a change of situs. | Edwards: The Trust unambiguously grants her the right to remove and replace the trustee; InvesTrust should not block a beneficiary’s exercise of that power. | InvesTrust: The Trust is silent on change of situs; given the successor trustee is in Wyoming and remainder beneficiary is Oklahoma-based, seeking court approval was prudent to protect the trust. | Court: Held for InvesTrust — insisting on court approval and hiring counsel to address situs issues fell within trustee’s broad administrative/protective powers. |
Key Cases Cited
- Carmichael v. Beller, 914 P.2d 1051 (Okla. 1996) (standard of review for summary judgment; legal questions reviewed de novo)
- Matter of Home-Stake Prod. Co. Deferred Comp. Tr., 598 P.2d 1193 (Okla. 1979) (interpretation of trust instruments is a question of law)
- Atwood v. Atwood, 25 P.3d 936 (Okla. Civ. App. 2001) (authority for trustee fees and expenses must be strictly construed)
- Bankers Trust Co. v. Hudson, 245 N.E.2d 405 (N.Y. 1969) (change of situs not permitted absent express or implied provision or showing benefit to administration)
- Robinson v. Kirbie, 793 P.2d 315 (Okla. Civ. App. 1990) (trustee discretion is broad but not without limits)