In the Matter of Williams Revocable Trust
172 A.3d 988
| Md. Ct. Spec. App. | 2017Background
- Settlor Donald E. Williams died owning about $3.5M (Estate) and $35M (inter vivos Trust). His plan created an Individual Beneficiary Trust (IBT) for companion Linda Slacum and a charitable Donnie Williams Foundation (Foundation) as the primary residual beneficiary.
- Disputes arose among the Personal Representative and Trustees over IBT funding, distributions, commissions, disclosures, and tax exposure; multiple suits followed in probate and circuit court. The Foundation participated in mediation and, with others, signed a Settlement and Release Agreement (SAR) on April 22, 2014, which included a Mutual Release and an NDA.
- After performance of some SAR terms, the Foundation filed two separate circuit-court actions on the same day in 2015: (1) a Removal Action seeking removal of Trustees and court supervision of the Trusts; and (2) a Damages Action seeking money damages, accounting, and equitable relief for alleged fiduciary breaches. The court consolidated the two actions for all purposes but preserved a show-cause hearing in the Removal Action.
- The circuit court granted partial summary judgment in the Damages Action as to claims that could have been asserted as of April 22, 2014 (the SAR date), limited evidence at the Removal Action hearing to post-SAR conduct, conducted the show-cause hearing, and ultimately dismissed the Removal Action with prejudice, finding no basis to remove Trustees.
- The Foundation appealed from the dismissal of the Removal Action. The Trustees moved to dismiss the appeal for lack of a final judgment, arguing that the Damages Action (consolidated and still pending as to post-SAR claims) remained open and interdependent with the Removal Action.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Finality of the Removal Action order (is dismissal immediately appealable?) | Foundation: consolidation was limited; the court intended separate final judgments so the Removal dismissal is appealable. | Trustees: consolidation was "for all purposes" and the Damages Action remains pending on related claims; appeal is premature under Rule 2-602. | Appeal dismissed — order was not final because related claims in the consolidated Damages Action remained unresolved and the matters were interdependent. |
| Effect of the SAR / Mutual Release on pre-APR 22, 2014 claims | Foundation: SAR is a special release, procured in breach of Trustees’ duties, may not bar claims (esp. for fraud); release shouldn't preclude court's equitable jurisdiction. | Trustees: SAR’s mutual release bars claims arising before April 22, 2014; partial summary judgment in Damages Action rightly applied. | Court treated SAR as operative for pre-April 22, 2014 claims (partial summary judgment entered); the Removal Action evidence was limited accordingly. |
| Whether Trustees’ conduct (delays funding IBT/Foundation; principal distributions to Slacum; commissions; disclosures) warranted removal | Foundation: conduct showed breaches of fiduciary duty (delay, improper principal distributions, excessive commissions, inadequate disclosures) justifying removal. | Trustees: actions were within Trust discretion, justified by tax concerns, asset liquidity, Foundation’s delay obtaining 501(c)(3) status and NDA execution; commissions lawful. | Trial court found no breach justifying removal: delays were reasonable, distributions authorized and accounted for, disclosures timely after NDA, commissions permitted. |
| Whether piecemeal appeals and judicial economy principles permit immediate appeal | Foundation: precedents (Coppage/Yarema) permit separate appeals where consolidation was for convenience and separate judgments intended. | Trustees: Waterkeeper and policy against piecemeal appeals require a joint final disposition when consolidated and interdependent. | Court applied Waterkeeper: because the consolidated cases were interrelated and intended for joint disposition, immediate appeal would be piecemeal and was dismissed. |
Key Cases Cited
- Coppage v. Resolute Ins. Co., 264 Md. 261 (1972) (consolidation of distinct cases for trial permits separate final judgments)
- Yarema v. Exxon Corp., 305 Md. 219 (1986) (consolidated but distinct actions treated separately when court intended separate judgments)
- Waterkeeper Alliance, Inc. v. Maryland Department of Agriculture, 439 Md. 262 (2014) (where consolidated actions are interdependent and court intended joint disposition, finality requires adjudication of all claims)
- Deer Automotive Group, LLC v. Brown, 454 Md. 52 (2017) (clarifies appealability of orders denying petitions to arbitrate and revises earlier appellate treatment)