Lehmann v. Bank of America, N.A.
2014 Mo. App. LEXIS 411
Mo. Ct. App.2014Background
- Settlor established an inter vivos trust in 1967 naming Boatmen’s National Bank of St. Louis as trustee; Bank is the corporate successor and current trustee.
- Settlor died in 2001; Mary L. Lehmann resigned as trustee in 2008 and Frederick W. Lehmann, IV became her successor as individual trustee.
- Article V of the Trust provides compensation to the corporate trustee per the Schedule of Fees (October 1, 1955), with Schedule II detailing an annual fee and a distribution fee charged to principal.
- Missouri law on trustee removal changed in 2004 with the enactment of Section 456.7-706, including no-fault removal by qualified beneficiaries.
- In 2012 Respondents petitioned for no-fault removal of Bank as corporate trustee and asked for a ruling that Bank was not entitled to the distribution fee or any additional compensation; discovery was bifurcated, focusing first on the distribution fee.
- Probate court granted partial summary judgment denying the distribution fee, held distribution occurs at termination and distribution to beneficiaries, and later removed Bank as trustee; this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitled to distribution fee on transfer to successor? | Bank: Settlor intended fee under Schedule II upon conclusion of services; no-fault removal fits deferred compensation. | Lehmanns: Distribution fee is tied to termination and distribution at trust end; no termination here. | Bank not entitled to distribution fee. |
| Whether facts preclude or support additional compensation under 456.7-708(2)? | Disg. remains; reasonable compensation may be warranted if no distribution fee. | If no fee, no basis for additional compensation; ripe issues not present on summary judgment. | Genuine issues of fact exist; remand for discovery on reasonableness of fee. |
| Did the probate court abuse discretion in denying 456.10-1004 attorneys’ fees? | Court should award costs and reasonable attorneys’ fees under the statute. | Discretionary award; denial can be proper given circumstances. | No abuse of discretion; denial affirmed. |
Key Cases Cited
- Mercantile Trust Co. Nat’l Ass'n v. Jaeger, 457 S.W.2d 727 (Mo. banc 1970) (defines distribution concept in trust contexts)
- In re Gene Wild Ins. Trust, 340 S.W.3d 139 (Mo.App. S.D.2011) (trust-interpretation approach: ascertain grantor intent from instrument)
- Adams v. USAA Cas. Ins. Co., 317 S.W.3d 66 (Mo.App. E.D.2010) (allowance of discovery on fee reasonableness issues)
- ITC Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371 (Mo. banc 1993) (summary judgment standard; de novo review on appeal)
- Grantham v. Rockhurst Univ., 563 S.W.2d 147 (Mo.App. W.D.1978) (contract interpretation: give meaning to all terms)
- Boatmen’s Trust Co. v. Sugden, 827 S.W.2d 249 (Mo.App. E.D.1992) (adhere to clear trust language; avoid rewriting contracts)
- Estate of Ingram v. Ashcroft, 709 S.W.2d 956 (Mo.App. W.D.1986) (trustee compensation generally not increased when instrument specifies it)