363 Ga. App. 232
Ga. Ct. App.2022Background
- Shirley and Sherwin Glass created a dynasty trust (2005); trustees included Phillip Faircloth and Ted Sexton; beneficiaries are family members and charities.
- Trustees adopted trustee compensation in 2008; a 2012 consent judgment/amendment and a 2013 release/indemnity further addressed trustee compensation and indemnification (both disputed by beneficiaries).
- In 2017 beneficiaries sued Faircloth and Sexton seeking removal, disgorgement, declaratory and injunctive relief, and to enjoin payment of trustee and attorney fees; in January 2019 the trial court denied the interlocutory injunction and appointed a Special Master to assess fee reasonableness (affirmed in Glass I).
- Special Master later authorized payment of a portion of requested fees; after trustees were removed, the trial court adopted the Special Master’s report and directed payment from the Trust.
- Faircloth and Sexton moved to enforce the January 2019 order as entitling them to ongoing advancement of attorneys’ fees; the trial court entered an Enforcement Order requiring the Trust to advance specified percentages of ongoing fees upon request (without contemporaneous reasonableness review); beneficiaries appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Appealability: Is the Enforcement Order directly appealable? | Beneficiaries: Enforcement Order is a mandatory interlocutory injunction and thus directly appealable under OCGA §5-6-34(a)(4). | Faircloth/Sexton: Order only enforces the earlier January 2019 order and is not a new injunction; appeal should be dismissed for lack of jurisdiction. | Court: Enforcement Order compels an affirmative act (ongoing fee payments) and is a new interlocutory injunction; direct appeal permitted. |
| Substance vs. nomenclature: Is the Enforcement Order distinct from January 2019 Order? | Beneficiaries: It effectively grants new relief (ongoing advances) distinct from prior order. | Faircloth/Sexton: Characterized as enforcement/modification of prior order. | Court: Substance controls; Enforcement Order grants distinct, affirmative relief and is therefore a separate injunction. |
| Standard applied: Did the trial court apply the interlocutory injunction standard? | Beneficiaries: Trial court failed to apply the four-factor interlocutory injunction test before ordering ongoing fee advances. | Faircloth/Sexton: Enforcement was appropriate to secure advancement under the Trust, releases, and indemnity. | Court: Trial court misapplied the law by not evaluating the injunction under the proper legal standard. |
| Remedy/disposition: What relief is required? | Beneficiaries: Requested reversal of Enforcement Order. | Faircloth/Sexton: Maintained order should be enforced. | Court: Vacated the Enforcement Order and remanded for the trial court to consider the motion under the interlocutory injunction standard and make appropriate findings. |
Key Cases Cited
- Glass v. Faircloth, 354 Ga. App. 326 (2020) (prior appellate decision addressing denial of interlocutory injunction and trust modification)
- Jones v. Peach Trader Inc., 302 Ga. 504 (2017) (orders modifying or dissolving interlocutory injunctions are appealable only on interlocutory basis)
- Glynn County v. Waters, 268 Ga. 500 (1997) (order requiring an affirmative act may constitute a mandatory injunction and be directly appealable)
- Yakob v. Kidist Mariam Ethiopian Orthodox Tewahedo Church, 359 Ga. App. 13 (2021) (relief distinct from earlier injunctions can create a new, appealable injunction)
- MSM Poly v. Textile Rubber & Chem Co., 353 Ga. App. 538 (2020) (trial court order directing action that grants injunctive relief is directly appealable)
- Dolinger v. Driver, 269 Ga. 141 (1998) (substance and function control over nomenclature for injunctions)
- SRB Investment Svcs. v. Branch Banking & Trust, 289 Ga. 1 (2011) (interlocutory injunctions are extraordinary remedies and require cautious exercise)
- Nemchik v. Riggs, 300 Ga. 363 (2016) (standard for appellate review of interlocutory injunctions)
- Humphries v. Weekly, 360 Ga. App. 59 (2021) (vacatur and remand where trial court failed to apply correct injunction standard)