52 So. 3d 1136
La. Ct. App.2010Background
- Mashburns created nine-family-trusts and nine-marital-trusts, with assets to be managed jointly and distributions to all beneficiaries; the 2008 income distributions were not made to Tim Mashburn and Helen Mashburn Penton, though other beneficiaries received theirs.
- The trial court ordered equal 2008 income distributions to all nine beneficiaries of both the family and marital trusts and ordered the trustees to pay Tim and Helen the same sums they paid to others; Tim Mashburn and Helen Mashburn Penton challenged the judgment.
- Trustees argued they were authorized to allocate litigation expenses and construction-delays losses to Tim and Helen’s trusts, and Tim contended principal distributions previously made to him should not bar 2008 income payments.
- Louisiana Trust Code provisions confer broad trustee powers but require fairness and impartial administration; Hughes v. Burguieres informs the approach to shared costs in closely related trusts, while other statutes address allocation between income and principal.
- Tim Mashburn sought damages for frivolous appeal; the appellate court ultimately affirmed in part, reversed in part, and denied damages, with costs allocated among the involved parties.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Allocation of litigation expenses to beneficiaries | Mashburns favored pro rata allocation | Trustees argued unequal allocation to beneficiaries who caused expenses | Expenses must be allocated pro rata among all trusts |
| Tim's 2008 marital-trust income entitlement | Tim entitled to equal 2008 income from marital trust | Tim had received principal distributions, reducing income; may owe repayment | Tim not entitled to 2008 income; principal advances may be retained until repaid |
| Lis pendens and offset for damages | Family trust could offset damages against income | Damages unliquidated; offsets not permitted against liquidated income | Unliquidated damages cannot offset liquidated income; offset rejected; damages action remains unresolved |
| Equal distributions to Tim/Helen vs others | Tim and Helen should receive same sums as others | Distribution rights depend on trust terms and prior dispositions | Tim/Helen entitled to same sums as others from family/ marital trusts where applicable, with exceptions |
| Frivolous appeal damages | Tim seeks damages for frivolous appeal | No evidence of frivolous or harassing conduct | Frivolous-appeal damages denied |
Key Cases Cited
- Huddleston v. Bossier Bank and Trust Co., 475 So.2d 1082 (La. 1985) (attorney fees not recoverable absent statute or contract)
- Tassin v. Golden Rule Ins. Co., 649 So.2d 1050 (La.App. 1st Cir. 1994) (fees require contractual/statutory basis)
- Hughes v. Burguieres, 276 So.2d 267 (La. 1973) (trustee costs allocated to all related trusts when actions affect all beneficiaries)