Napoleon L. Cassibry, III v. Graham W. Cassibry
217 So. 3d 698
| Miss. Ct. App. | 2017Background
- Napoleon L. Cassibry, III served as trustee of three irrevocable trusts established from his parents’ estate: the Napoleon L. Cassibry, Jr. Family Trust, the Cassibry Children Irrevocable Trust, and the June C. Cassibry Irrevocable (JCC) Trust; beneficiaries included Napoleon, John, and Graham Cassibry.
- From 1999–2008 Napoleon withdrew substantial sums from the Family and Children’s Trusts, characterizing many withdrawals as "loans" but offering no loan documentation or interest/collateral; he also used trust stock as collateral for a personal Paragon stock purchase that later lost value.
- The accountant’s court-ordered accounting found numerous unexplained withdrawals and concluded Napoleon had taken significantly more than his fair share; records were disorganized and Napoleon failed to provide required annual accountings.
- Chancery court found Napoleon breached his fiduciary duty/duty of loyalty by using trust funds for his personal benefit (excluding the Paragon investment decision), ordered monetary judgment (split between Graham and John), transfer of Paragon shares to Graham, costs for the accounting, and awarded attorney’s fees on reconsideration.
- On appeal Napoleon challenged (1) the finding that loans to himself from the Children’s Trust breached the duty of loyalty, (2) the Family Trust damage award (claiming June’s consent), and (3) the award of attorney’s fees; the Court of Appeals affirmed damages but reversed and remanded the attorney’s-fees award for a proper evidentiary showing.
Issues
| Issue | Plaintiff's Argument (Graham) | Defendant's Argument (Napoleon) | Held |
|---|---|---|---|
| Whether loans/withdrawals from the Children’s Trust by trustee-beneficiary breached duty of loyalty | Trustee withdrawals and failure to account depleted trust and harmed beneficiaries; duty of loyalty prohibits self-dealing | Trust instrument expressly authorized loans to a beneficiary; statute (later enacted) permits transactions authorized by the trust | Breach affirmed: express power does not excuse self-dealing, poor recordkeeping, excess withdrawals, and diversion of dividends supported breach and damages |
| Whether withdrawals from Children’s Trust proximately harmed Graham | Withdrawals reduced value/benefits (e.g., dividends) to Graham despite him receiving one-third corpus | Napoleon says he only drew against his own share and did not impair Graham’s share | Held for Graham: court reasonably found damages from withdrawals and accounted for them in award |
| Whether Family Trust withdrawals were authorized by June’s consent, negating liability | June did not effectively authorize withdrawals; consent not proven or inadequately informed | Napoleon testified June approved withdrawals and acquiesced | Held for Graham: trial court could disbelieve Napoleon; consent not established and withdrawals contributed to depletion |
| Whether attorney’s fees awarded to Graham were supported by record | Graham sought fees; court awarded fees on reconsideration but failed to admit itemized fee evidence properly | Napoleon challenged admissibility/record support | Fees award reversed and remanded for a proper hearing because itemized fee evidence was not properly in the record |
Key Cases Cited
- Robinson v. Trustmark Nat’l Bank, 179 So. 3d 1146 (Miss. Ct. App.) (standard of review for chancery factual findings)
- Finch v. Finch, 137 So. 3d 227 (Miss.) (standard re: chancery review quoted)
- McWilliams v. McWilliams ex rel. Weathersby, 994 So. 2d 841 (Miss. Ct. App.) (trustee duty of loyalty and prohibition on conflicts/self-dealing)
- Wilbourn v. Wilbourn, 106 So. 3d 360 (Miss. Ct. App.) (trustee fiduciary duties, duty of prudence and loyalty)