In re Peierls Family Testamentary Trusts
77 A.3d 223
Del.2013Background
- Seven testamentary trusts (created 1953–2005) held by members of the Peierls family; none were created or administered in Delaware; trustees include family members and Northern Trust (a Delaware corporation).
- Petitioners sought Court of Chancery relief under newly adopted Chancery Rules 100–103: approve trustee resignations, appoint Northern Trust sole trustee, fix Delaware as situs and law, reform administrative scheme, and accept jurisdiction/continuing oversight.
- No respondent named; beneficiaries and some trustees consented; prior probate proceedings occurred in New Jersey, New York, and Texas at various times depending on the trust group.
- The trusts break into three groups: 1960 Trusts (sitused and supervised in New Jersey), 1969 Trusts (originally NY, transferred to Texas; Texas orders declare Texas situs and law), and 2005 Trusts (Texas choice-of-law and situs provision in will).
- Court of Chancery (Vice Chancellor) found it had power/personal jurisdiction but declined to exercise jurisdiction on comity/primary-supervision grounds for some trusts; Delaware Supreme Court affirmed in part and reversed in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Chancery had jurisdiction over administration of the trusts | Petitioners: Chancery has personal jurisdiction (trustees consented) and power to adjudicate administrative requests | Respondents: Primary supervision and situs in other states (NJ, TX, NY) counsel abstention | Court: Chancery had jurisdiction over trustees but must consider primary supervision/comity before exercising it |
| Whether Chancery should exercise jurisdiction over 1960 Trusts | Petitioners: Delaware should accept jurisdiction because Northern Trust is Delaware entity and trustees consented | Respondents: New Jersey retains primary supervision; ongoing accountings and court orders in NJ | Held: Abstain — New Jersey has primary supervision; Vice Chancellor properly declined to adjudicate 1960 Trusts |
| Whether Chancery should exercise jurisdiction over 1969 Trusts | Petitioners: Similar consent and relief sought as to other trusts; ask Delaware to reform and accept jurisdiction | Respondents: Texas issued orders transferring situs and declaring Texas law governs; Texas has primary supervision | Held: Reversed — Texas court’s active supervision is limited; no evidence Texas retained primary supervision; Chancery erred in declining jurisdiction, but remand would be futile because reformation raises Texas-law issues and trustee resignations depend on trust reform |
| Whether Chancery should exercise jurisdiction over 2005 Trusts | Petitioners: Did not brief these trusts in appellate briefing | Respondents: Will contains explicit Texas situs and choice-of-law; insufficient record | Held: Affirmed decline — Petitioners failed to brief or provide sufficient information; Court will not address jurisdiction for 2005 Trusts |
Key Cases Cited
- Reserves Dev. LLC v. Severn Sav. Bank, FSB, 961 A.2d 521 (Del. 2008) (standard for reviewing Chancery exercise of equitable powers)
- In re Unfunded Ins. Trust Agreement of Capaldi, 870 A.2d 493 (Del. 2005) (standards for equitable relief review)
- Lawson v. Meconi, 897 A.2d 740 (Del. 2006) (de novo review of legal conclusions)
- Scion Breckenridge Managing Member, LLC v. ASB Allegiance Estate Fund, 68 A.3d 665 (Del. 2013) (appellate standards referenced)
- SV Inv. Partners, LLC v. ThoughtWorks, Inc., 37 A.3d 205 (Del. 2011) (appellate principles)
- In re Peierls Inter Vivos Family Trusts, 77 A.3d 249 (Del. 2013) (companion opinion addressing inter vivos trusts)
- In re Ethel F. Peierls Charitable Lead Unitrust, 77 A.3d 232 (Del. 2013) (companion opinion addressing charitable trust)
- Smith v. Delaware State Univ., 47 A.3d 472 (Del. 2012) (appellate briefing requirements)
- Roca v. E.I. DuPont de Nemours and Co., 842 A.2d 1238 (Del. 2004) (appellate briefing and issue preservation)