115 So. 3d 1190
La. Ct. App.2013Background
- The H.M. Favrot, Jr. Trust #3 was created for four siblings (Semmes, James, Kathleen, Caroline) each holding a 25% beneficial interest, with James as trustee.
- Semmes sued to remove James as trustee in 2008, alleging fiduciary breaches; others intervened supporting James and seeking James’ continuation as trustee.
- James filed a reconventional demand seeking (a) declaratory relief that would effectively partition assets and remove Semmes’ share from James, and (b) a judgment to allocate all defense costs to Semmes’ trust share.
- During trial preceding 2010, the parties stipulated that the sole issue to be tried was Semmes’ removal petition; other claims were severed and reserved.
- In 2010 the trial court granted James relief, including declaratory relief allowing charging fees to Semmes’ share and distributing assets to sever the beneficiaries’ interests.
- On appeal, this court vacated the declaratory relief and remanded; later, James moved for summary judgment on the reconventional demand and Semmes moved to compel discovery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether discovery denial/mootness was improper | Semmes argues denial limited access to distribution facts. | Favrot contends ample discovery was available and not necessary for summary judgment. | Discovery denial affirmed as moot; no abuse of discretion. |
| Attorney’s fees allocation among beneficiaries | James argues fees should be charged to Semmes’ share. | Semmes contends fees must be allocated pro rata or to all beneficiaries under trust law. | Fees must be allocated pro rata among all four beneficiaries; not solely to Semmes. |
| Costs allocation for the Trust proceedings | Costs should be charged to Semmes’ trust share. | Costs may be charged to Semmes individually rather than his trust share. | Costs (excluding attorney’s fees) should be charged to Semmes individually, not his trust share. |
| Authority to distribute/trust severance prior to term | James asserts the trustee may distribute assets to sever the trusts per Article 3.1. | Semmes argues distribution/termination before settlors’ deaths is prohibited by Article 2.3 and law. | Trustee may distribute Semmes’ share to sever the interests; no prohibition on severance under Article 3.1. |
Key Cases Cited
- In re Mashburn Marital Trusts, 52 So.3d 1136 (La.App. 1 Cir. 2010) (attorney’s fees may be allocated pro rata to trusts when beneficiaries litigate for personal benefit)
- Horrell, 993 So.2d 354 (La.App. 4 Cir. 2008) (sanctions against legatee; costs allocated from estate to beneficiary for contempt)
- Succession of Bell, 964 So.2d 1067 (La.App. 1 Cir. 2007) (contempt and costs; reversal on procedural grounds; fees not allocated to legatee where not properly pursued)